Legalize / United Kingdom / Public General Act

Finance Act 2003

Type Public General Act

Publication 2003-07-10

Last updated 2025-03-20

State In force

Department Statute Law Database

Source legislation.gov.uk

articles Not indexed

Reform history JSON API

(2) For the purposes of this paragraph persons who are entitled to a chargeable interest as beneficial joint tenants ... shall be taken to be entitled to the chargeable interest as beneficial tenants in common ... in equal shares.

(3) For the purpose of paragraph (b) of Step 2 a company is to be treated as an individual connected with the relevant owner in so far as it—

(a) holds property as trustee, and

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

21

(1) This paragraph provides for determining the partnership share attributable to a partner for the purposes of paragraph 20 (1) (see Step Four).

(2) Paragraph 22 applies for determining the partnership share attributable to a partner where—

(a) the effective date of the transfer of the relevant chargeable interest to the partnership was before 20th October 2003, or

(b) the effective date of the transfer of the relevant chargeable interest to the partnership was on or after that date and—

(i) the instrument by which the transfer was effected has been duly stamped with ad valorem stamp duty, or

(ii) any tax payable in respect of the transfer has been duly paid under this Part.

(3) Where the effective date of the transfer of the relevant chargeable interest to the partnership was on or after 20th October 2003 but neither of the conditions in sub-paragraphs (i) and (ii) of sub-paragraph (2)(b) is met, the partnership share attributable to the partner is zero.

(4) The relevant chargeable interest is—

(a) the chargeable interest which ceases to be partnership property as a result of the transaction to which paragraph 18 applies, or

(b) where the transaction to which paragraph 18 applies is the grant or creation of a chargeable interest, the chargeable interest out of which that interest is granted or created.

22

(1) Where this paragraph applies, the partnership share attributable to the partner is determined as follows:—

Step One

Find the partner’s actual partnership share on the relevant date.

In a case falling within paragraph 21(2)(a), the relevant date—

(a) if the partner was a partner on 19th October 2003, is that date;

(b) if the partner became a partner after that date, is the date on which he became a partner.

In a case falling within paragraph 21(2)(b), the relevant date—

(a) if the partner was a partner on the effective date of the transfer of the relevant chargeable interest to the partnership, is that date;

(b) if the partner became a partner after that date, is the date on which he became a partner.

Step Two

Add to that partnership share any increases in the partner’s partnership share which—

(a) occur in the period starting on the day after the relevant date and ending immediately before the transaction to which paragraph 18 applies, and

(b) count for this purpose.

The result is the increased partnership share.

An increase counts for the purpose of paragraph (b) only if—

(i) where the transfer which resulted in the increase took place on or before the date on which the Finance Act 2004 was passed, the instrument by which the transfer was effected has been duly stamped with ad valorem stamp duty under the enactments relating to stamp duty;

(ii) where the transfer which resulted in the increase took place after that date, any tax payable in respect of the transfer has been duly paid under this Part.

Step Three

Deduct from the increased partnership share any decreases in the partner’s partnership share which occur in the period starting on the day after the relevant date and ending immediately before the transaction to which paragraph 18 applies.

The result is the partnership share attributable to the partner.

(2) If the effect of applying Step Three would be to reduce the partnership share attributable to the partner below zero, the partnership share attributable to the partner is zero.

(3) In a case falling within paragraph 21(2)(a), if the partner ceased to be a partner before 19th October 2003, the partnership share attributable to the partner is zero.

(4) In a case falling within paragraph 21(2)(b), if the partner ceased to be a partner before the effective date of the transfer of the relevant chargeable interest to the partnership, the partnership share attributable to the partner is zero.

(5) Paragraph 21(4) (relevant chargeable interest) applies for the purposes of this paragraph.

Reallocation of trust property as between beneficiaries

23

(1) This paragraph applies where—

(a) there is a transfer of a chargeable interest from a partnership to a partnership, and

(b) the transfer is both—

(i) a transaction to which paragraph 10 applies, and

(ii) a transaction to which paragraph 18 applies.

(2) Paragraphs 10(2) and 18(2) do not apply.

(2A) The chargeable consideration for the transaction shall be taken to be what it would have been if paragraph 10(2) had applied or, if greater, what it would have been if paragraph 18(2) had applied.

(3) Where the whole or part of the chargeable consideration for the transaction is rent—

(a) paragraphs 11 and 19 do not apply;

(b) the tax chargeable in respect of so much of the chargeable consideration as consists of rent shall be taken to be what it would have been if paragraph 11 had applied or, if greater, what it would have been if paragraph 19 had applied;

(i) it would have had effect if paragraph 11(2B) of this Schedule had applied, or

(ii) it would have had effect if paragraph 19(2B) of this Schedule had applied.

24

(1) This paragraph applies where—

(a) there is a transaction to which paragraph 18 applies;

(b) immediately before the transaction all the partners are bodies corporate;

(2) Paragraphs 18, 19 and 23 have effect with these modifications.

(3) In paragraph 18, for sub-paragraphs (2) and (5) substitute—

(2) The chargeable consideration for the transaction shall be taken to be equal to the market value of the interest transferred.

(4A) In paragraph 19(2), for “sub-paragraphs (2A) to (2C)” substitute “ sub-paragraph (2C) ”.

(5) In paragraph 19, omit sub-paragraphs (2A), (2B), (2D) and (8).

(9) Paragraph 20 provides for determining the sum of the lower proportions.

Application of disadvantaged areas relief

25

(1) Where paragraph 10, 14, 17 or 18 applies, paragraph 1 of Schedule 3 (exemption of transactions for which there is no chargeable consideration) does not apply.

(2) But (subject to paragraphs 27 and 28 ) this Part of this Schedule has effect subject to any other provision affording exemption or relief from stamp duty land tax.

26

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

Application of group relief

27

(1) Part 1 of Schedule 7 (group relief) applies to—

(a) a transaction to which paragraph 10 applies, and

(b) a transaction that is a chargeable transaction by virtue of paragraph 17,

with these modifications.

(2) In paragraph 3(1)(a), for “the purchaser” substitute “ a partner who was a partner at the effective date of the relevant transaction (“the relevant partner”) ”.

(3) In paragraph 3(1), for paragraph (b) substitute—

(b) at the time the relevant partner ceases to be a member of the same group as the vendor (“the relevant time”), a chargeable interest is held by or on behalf of the members of the partnership and that chargeable interest— (i) was acquired by or on behalf of the partnership under the relevant transaction, or (ii) is derived from a chargeable interest so acquired, and has not subsequently been acquired at market value under a chargeable transaction for which group relief was available but was not claimed,

(4) In paragraph 3(3), for the words from “the transferee company” to the end substitute “ or on behalf of the partnership and to the proportion in which the relevant partner is entitled at the relevant time to share in the income profits of the partnership. ”.

(5) In paragraph 3(4), omit the definition of “relevant associated company”.

(6) In paragraphs 4 to 6, for “the purchaser” (wherever appearing) substitute “ the relevant partner ”.

Application of charities relief

28

(1) Schedule 8 (charities relief) applies to the transfer of an interest in a partnership that is a chargeable transaction by virtue of paragraph 14 or 17 with these modifications.

(2) In paragraph 1(1), for “A land transaction is exempt from charge if the purchaser is a charity” substitute “ A transfer of an interest in a partnership that is a chargeable transaction by virtue of paragraph 14 or 17 of Schedule 15 is exempt from charge if the transferee is a charity ”.

(3) In paragraph 1(2)—

(a) for “the purchaser must intend to hold the subject-matter of the transaction” substitute “ every chargeable interest held as partnership property immediately after the transfer must be held ”;

(b) in paragraphs (a) and (b) for “the purchaser” substitute “ the transferee ”.

(4) In paragraph 1(3) for “the purchaser” substitute “ the transferee ”.

(5) In paragraph 2(1), for paragraph (b) substitute—

(b) at the time of the disqualifying event the partnership property includes a chargeable interest— (i) that was held as partnership property immediately after the relevant transaction, or (ii) that is derived from an interest held as partnership property at that time,

(6) In paragraph 2(3)(a), for “the purchaser” substitute “ the transferee ”.

(7) In paragraph 2(3), for paragraph (b) substitute—

(b) any chargeable interest held as partnership property immediately after the relevant transaction, or any interest or right derived from it, being used or held otherwise than for qualifying charitable purposes.

(8) For paragraph 2(4) substitute—

(4) In sub-paragraphs (1) and (2) an “appropriate proportion” means an appropriate proportion having regard to— (a) the chargeable interests held as partnership property immediately after the relevant transaction and the chargeable interests held as partnership property at the time of the disqualifying event, and (b) the extent to which any chargeable interest held as partnership property at that time becomes used or held for purposes other than qualifying charitable purposes.

(9) After paragraph 2 insert—

(3) (1) There is a transfer of an interest in a partnership for the purposes of this Schedule if there is such a transfer for the purposes of Part 3 of Schedule 15 (see paragraph 36 of that Schedule). (2) Paragraph 34 (1) of Schedule 15 (meaning of references to partnership property) applies for the purposes of this Schedule as it applies for the purposes of Part 3 of that Schedule.

Transactions that are not notifiable

29

Except as provided by—

(a) paragraph 10 (transfer of chargeable interest to a partnership), or

(b) paragraph 14 (transfer of partnership interest: consideration given and chargeable interest held), or

the acquisition of an interest in a partnership is not a chargeable transaction, notwithstanding that the partnership property includes land.

30

(1) A transaction which is a chargeable transaction by virtue of paragraph 14 or 17 (transfer of partnership interest) is a notifiable transaction if (but only if) the consideration for the transaction exceeds the zero rate threshold.

(2) The consideration for a transaction exceeds the zero rate threshold if one or more of the following conditions are met—

(a) the relevant consideration for the purposes of section 55 (amount of tax chargeable: general) is such that the amount of tax chargeable under that section is not zero;

(aa) paragraph 3 of Schedule 4A applies to the transaction;

(b) the relevant rental value for the purposes of Schedule 5 (amount of tax chargeable: rent) is such that the rate of tax chargeable under that Schedule is 1% or higher.

31

(1) Nothing in section 125 (abolition of stamp duty except in relation to stock or marketable securities), or in Part 2 of Schedule 20 (amendments and repeals consequential on that section) or in Schedule 24 to the Finance Act 2014 (abolition of stamp duty in relation to certain securities), affects the application of the enactments relating to stamp duty in relation to an instrument by which a transfer of an interest in a partnership is effected.

(2) In Part 1 of Schedule 20 (provisions supplementing section 125) references to stock or marketable securities shall be read as including any property that is the subject-matter of a transaction by which an interest in a partnership is transferred.

(3) In their application in relation to an instrument by which a transfer of an interest in a partnership is effected, the enactments relating to stamp duty have effect subject to paragraphs 32 and 33.

32

(1) This paragraph applies where—

(a) stamp duty under Part 1 of Schedule 13 to the Finance Act 1999 (transfer on sale) is chargeable on an instrument effecting a transfer of an interest in a partnership, and

(b) the relevant partnership property includes a chargeable interest.

(2) The “relevant partnership property”, in relation to a transfer of an interest in a partnership, is every chargeable interest held as partnership property immediately after the transfer, other than any interest that was transferred to the partnership in connection with the transfer.

(3) The consideration for the transaction shall (subject to sub-paragraph (8)) be taken to be equal to the actual consideration for the transaction less the excluded amount.

(4) The excluded amount is a proportion of the net market value of the relevant partnership property immediately after the transfer.

(5) That proportion is—

(a) if the person acquiring the interest in the partnership was not a partner before the transfer, his partnership share immediately after the transfer;

(b) if he was a partner before the transfer, the difference between his partnership share before and after the transfer.

(6) The net market value of a chargeable interest at a particular date is—

$$MV-SL$where— MV is the market value of the chargeable interest at that date, andSL is the amount outstanding at that date on any loan secured solely on the chargeable interest.$

(7) If, in relation to a chargeable interest, SL is greater than MV, the net market value of the chargeable interest shall be taken to be nil.

(8) If the excluded amount is greater than the actual consideration for the transaction, the consideration for the transaction shall be taken to be nil.

(9) Where this paragraph applies in relation to an instrument, the instrument shall not be regarded as duly stamped unless it has been stamped in accordance with section 12 of the Stamp Act 1891.

33

(1) This paragraph applies where stamp duty under Part 1 of Schedule 13 to the Finance Act 1999 (transfer on sale) is, apart from this paragraph, chargeable on an instrument effecting a transfer of an interest in a partnership.

(1A) If the relevant partnership property does not include any relevant securities, no stamp duty shall (subject to sub-paragraph (8)) be chargeable on the instrument.

(3) If the relevant partnership property includes relevant securities, the stamp duty chargeable on the instrument shall not exceed the stamp duty that would be chargeable if—

(a) the instrument were an instrument effecting a transfer of ... those securities, and

(b) the consideration for the transfer were equal to the appropriate proportion of the net market value of ... those securities immediately after the transfer.

(3A) The “relevant partnership property”, in relation to a transfer of an interest in a partnership, is the partnership property immediately after the transfer, other than any partnership property that was transferred to the partnership in connection with the transfer.

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

(5) The appropriate proportion is—

(a) if the person acquiring the interest in the partnership was not a partner before the transfer, his partnership share immediately after the transfer;

(b) if he was a partner before the transfer, the difference between his partnership share before and after the transfer.

(6) The net market value of relevant securities at a particular date is—

$$MV-SL$where— MV is the market value of the relevant securities at that date, andSL is the amount outstanding at that date on any loan secured solely on the relevant securities.$

(7) If, in relation to any relevant securities, SL is greater than MV, the net market value of the relevant securities shall be taken to be nil.

(8) Where this paragraph applies in relation to an instrument, the instrument shall not be regarded as duly stamped unless it has been stamped in accordance with section 12 of the Stamp Act 1891.

(8A) In this paragraph “relevant securities” means stock or marketable securities other than any stock or marketable securities admitted to trading on a recognised growth market but not listed on any market.

(9) This paragraph shall be construed as one with the Stamp Act 1891.

Interpretation: transfer of chargeable interest to a partnership

34

(1) Any reference in this Part of this Schedule to partnership property is to an interest or right held by or on behalf of a partnership, or the members of a partnership, for the purposes of the partnership business.

(2) Any reference in this Part of this Schedule to a person’s partnership share at any time is to the proportion in which he is entitled at that time to share in the income profits of the partnership.

35

For the purposes of this Part of this Schedule, there is a transfer of a chargeable interest to a partnership in any case where a chargeable interest becomes partnership property.

36

For the purposes of this Part of this Schedule, where a person acquires or increases a partnership share there is a transfer of an interest in the partnership (to that partner and from the other partners).

37

For the purposes of this Part of this Schedule, there is a transfer of a chargeable interest from a partnership in any case where—

(a) a chargeable interest that was partnership property ceases to be partnership property, or

(b) a chargeable interest is granted or created out of partnership property and the interest is not partnership property.

38

(1) This paragraph applies in relation to a lease for the purposes of this Part of this Schedule if—

(a) the grant of the lease is or was a transaction to which paragraph 10 applies or applied (or a transaction to which paragraph 10 would have applied if that paragraph had been in force at the time of the grant), or

(b) the grant of the lease is a transaction to which paragraph 18 applies.

(2) In determining the market value of the lease, an obligation of the tenant under the lease is to be taken into account if (but only if)—

(a) it is an obligation such as is mentioned in paragraph 10 (1) of Schedule 17A, or

(b) it is an obligation to make a payment to a person.

39

(1) Section 1122 of the Corporation Tax Act 2010 (connected persons) has effect for the purposes of this Part of this Schedule.

(2) As applied by sub-paragraph (1), that section has effect with the omission of subsection (7) (partners connected with each other).

(3) As applied by sub-paragraph (1) for the purposes of paragraph 12 or 20, that section has effect with the omission of subsection (6)(c) to (e) (trustee connected with settlement).

Meaning of “lease”

40

In this Part of this Schedule “arrangements” includes any scheme, agreement or understanding, whether or not legally enforceable.

First rent review in final quarter of fifth year

7A

Where—

(a) a lease contains provision under which the rent may be adjusted,

(b) under that provision the first (or only) such adjustment—

(i) is to an amount that (before the adjustment) is uncertain, and

(ii) has effect from a date (the “review date”) that is expressed as falling five years after a specified date,

and

this Schedule has effect as if references to the first five years of the term of the lease were to the period beginning with the start of the term of the lease and ending with the review date. References to the fifth year of the term of the lease shall be read accordingly.

Agreement for lease

12A

(1) This paragraph applies where ...—

(a) an agreement for a lease is entered into, and

(b) the agreement is substantially performed without having been completed.

(2) The agreement is treated as if it were the grant of a lease in accordance with the agreement (“the notional lease”), beginning with the date of substantial performance.

The effective date of the transaction is that date.

(3) Where a lease (“the actual lease”) is subsequently granted in pursuance of the agreement, the notional lease is to be treated for the purposes of this Part as if it were a lease granted—

(a) on the date the agreement was substantially performed,

(b) for a term which begins with that date and ends at the end of the term of the actual lease, and

(c) in consideration of the total rent payable over that term and any other consideration given for the notional lease or the actual lease.

(3A) Where sub-paragraph (3) applies the grant of the actual lease is disregarded for the purposes of this Part except section 81A (return or further return in consequence of later linked transaction).

(3B) For the purposes of section 81A—

(a) the grant of the notional lease and the grant of the actual lease are linked (whether or not they would be linked by virtue of section 108),

(b) the lessee under the actual lease (rather than the lessee under the notional lease) is liable for any tax or additional tax payable in respect of the notional lease as a result of sub-paragraph (3), and

(c) the reference in section 81A(1)(a) to “the purchaser under the earlier transaction” is to be read, in relation to the notional lease, as a reference to the lessee under the actual lease.

(4) Where sub-paragraph (1) applies and the agreement 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 sub-paragraph 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 agreement.

(5) In this paragraph “substantially performed” and “completed” have the same meanings as in section 44 (contract and conveyance).

Assignment of agreement for lease

12B

(1) This paragraph applies, in place of Schedule 2A (transactions entered into before completion of contract), where ... a person assigns his interest as lessee under an agreement for a lease.

(2) If the assignment occurs without the agreement having been substantially performed, section 44 (contract and conveyance) has effect as if—

(a) the contract were with the assignee and not the assignor, and

(b) the consideration given by the assignee for entering into the contract included any consideration given by him for the assignment.

(3) If the assignment occurs after the agreement has been substantially performed—

(a) the assignment is a separate land transaction, and

(b) the effective date of that transaction is the date of the assignment.

(4) Where there are successive assignments, this paragraph has effect in relation to each of them.

Reduction of rent or term or other variation of lease

15A

(1) Where a lease is varied so as to reduce the amount of the rent, the variation is treated for the purposes of this Part as an acquisition of a chargeable interest by the lessee.

(1A) Where any consideration in money or money's worth (other than an increase in rent) is given by the lessee for any variation of a lease, other than a variation of the amount of the rent or of the term of the lease, the variation is treated for the purposes of this Part as an acquisition of a chargeable interest by the lessee.

(2) Where a lease is varied so as to reduce the term, the variation is treated for the purposes of this Part as an acquisition of a chargeable interest by the lessor.

Meaning of “restricted shares”

Declaration by agent

1A

(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

1B

(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).

Disclosure for exemptions: Northern Ireland

Duty at higher rate: exception for tractive units

Requirement of evidence or security

Joint and several liability for unpaid VAT of another trader

Face-value vouchers

Penalty for evasion

Reduction of penalty under section 25 or 26

Demands for penalties

Extensions of time

Chargeable interests

Acquisition by bodies established for national purposes

Compliance with planning obligations

Charities relief

71A

(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.

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

(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.

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

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

72A

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

Interest on unpaid tax

Meaning of “residential property”

Meaning of “effective date” of a transaction

Commencement and transitional provisions

Circumstances in which group relief withdrawn

Circumstances in which relief for company acquisitions withdrawn

Provision of services through intermediary

PAYE: regulations and notional payments

Double taxation relief: profits attributable to overseas permanent establishment

PAYE: regulations and notional payments

Deferred unascertainable consideration: election for treatment of loss

Extension of first-year allowances for ICT expenditure by small enterprises

Expenditure on software for sub-licensing

Double taxation relief: profits attributable to overseas permanent establishment

Overseas life insurance companies

Repos etc

Relevant discounted securities: withdrawal of relief for costs and losses, etc

Rate of landfill tax

Deemed supplies

Amendments about registration, payment etc

Electricity from renewable sources etc

Higher rate of tax: divided companies

Companies in administration

CHP exemption to be based on current efficiency

Authorised unit trusts, OEICs and common investment funds

Rate of landfill tax

Payments in error from or to National Loans Fund

Deemed supplies

Acquisition by house-building company from individual acquiring new dwelling

Transaction land

Meaning of “non-resident transaction”

Whether individual “non-resident” in relation to a chargeable transaction

Partnership interests: application of provisions about exchanges etc.

Election by property-investment partnership to disapply paragraph 10

Application of disadvantaged areas relief

Application of exemptions and reliefs

Application of charities relief

Interpretation: arrangements

Transactions that are not notifiable

Exclusion of market rent leases

Transfer of chargeable interest to a partnership consisting wholly of bodies corporate

Transfer of chargeable interest from a partnership: chargeable consideration including rent

Transfer of partnership interest pursuant to earlier arrangements

Interpretation: arrangements

Interpretation: transfer of chargeable interest to a partnership

Application of group relief

Transactions that are not notifiable

Interpretation: transfer of chargeable interest to a partnership

Interpretation: arrangements

Introduction

PAYE: regulations and notional payments

Exemption where homeworker’s additional expenses met by employer

PAYE: regulations and notional payments

Transfers of value: attribution of gains to beneficiaries

Avoidance affecting proceeds of balancing event

Gains on policies of life insurance etc: rate of tax

Gifts with reservation

Exemption for fuel used in recycling processes

Rate of landfill tax

Deemed supplies

Amendments about registration, payment etc

CHP exemption to be based on current efficiency

Rate of landfill tax

Companies acquiring their own shares

Deemed supplies

Use of electronic means of payment under other provisions

Consequential claims etc

Accounts of Consolidated Fund and National Loans Fund

Debt Management Account: abolition of borrowing cap

Acquisition by property trader from individual where chain of transactions breaks down

Acquisition by property trader from personal representatives

Acquisition by house-building company from individual acquiring new dwelling

Application of CFC provisions to Hong Kong and Macao companies

Authorised unit trusts: interest distributions paid gross

Election by property-investment partnership to disapply paragraph 10

Exclusion of market rent leases

Election by property-investment partnership to disapply paragraph 10

Transfer of chargeable interest from a partnership consisting wholly of bodies corporate

Transfer of chargeable interest from a partnership to a partnership

Acquisition of interest in partnership not chargeable except as specially provided

Application of exemptions and reliefs

Transfer of chargeable interest from a partnership: general

Reallocation of trust property as between beneficiaries

Transactions that are not notifiable

Acquisition of interest in partnership not chargeable except as specially provided

Application of charities relief

Reallocation of trust property as between beneficiaries

Meaning of “lease”

Introduction

Withdrawal of group relief in certain cases involving successive transactions

4A

(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

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—

(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.

(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.

Withdrawal of money etc from partnership after transfer of chargeable interest

17A

(1) This paragraph applies where—

(a) there is a transfer of a chargeable interest to a partnership (“the land transfer”);

(b) the land transfer falls within paragraph (a), (b) or (c) of paragraph 10(1);

(d) at the time of the qualifying event, an election has not been made in respect of the land transfer under paragraph 12A.

(2) A qualifying event is—

(a) a withdrawal from the partnership of money or money's worth which does not represent income profit by the relevant person—

(i) withdrawing capital from his capital account,

(ii) reducing his interest, or

(iii) ceasing to be a partner, or

(b) in a case where the relevant person has made a loan to the partnership—

(i) the repayment (to any extent) by the partnership of the loan, or

(ii) a withdrawal by the relevant person from the partnership of money or money's worth which does not represent income profit.

(3) For this purpose the relevant person is—

(a) where the land transfer falls within paragraph 10(1)(a) or (b), the person who makes the land transfer, and

(b) where the land transfer falls within paragraph 10(1)(c), the partner concerned or a person connected with him.

(4) The qualifying event—

(a) shall be taken to be a land transaction, and

(b) is a chargeable transaction.

(5) The partners shall be taken to be the purchasers under the transaction.

(6) Paragraphs 6 to 8 (responsibility of partners) have effect in relation to the transaction.

(7) The chargeable consideration for the transaction shall be taken to be—

(a) in a case falling within sub-paragraph (2)(a), equal to the value of the money or money's worth withdrawn from the partnership,

(b) in a case falling within sub-paragraph (2)(b)(i), equal to the amount repaid, and

(c) in a case falling within sub-paragraph (2)(b)(ii), equal to so much of the value of the money or money's worth withdrawn from the partnership as does not exceed the amount of the loan,

but (in any case) shall not exceed the market value, as at the effective date of the land transfer, of the chargeable interest transferred by the land transfer, reduced by any amount previously chargeable to tax.

(8) Where—

(a) a qualifying event gives rise to a charge under this paragraph, and

(b) the same event gives rise to a charge under paragraph 14 (transfer for consideration of interest in property-investment partnership),

the amount of the charge under this paragraph is reduced (but not below nil) by the amount of the charge under that paragraph.

Loan or deposit in connection with grant or assignment of lease

18A

(1) Where, under arrangements made in connection with the grant of a lease—

(a) the lessee, or any person connected with him or acting on his behalf, pays a deposit, or makes a loan, to any person, and

(b) the repayment of all or part of the deposit or loan is contingent on anything done or omitted to be done by the lessee or on the death of the lessee,

the amount of the deposit or loan (disregarding any repayment) is to be taken for the purposes of this Part to be consideration other than rent given for the grant of the lease.

(2) Where, under arrangements made in connection with the assignment of a lease—

(a) the assignee, or any person connected with him or acting on his behalf, pays a deposit, or makes a loan, to any person, and

(b) the repayment of all or part of the deposit or loan is contingent on anything done or omitted to be done by the assignee or on the death of the assignee,

the amount of the deposit or loan (disregarding any repayment) is to be taken for the purposes of this Part to be consideration other than rent given for the assignment of the lease.

(3) Sub-paragraph (1) or (2) does not apply in relation to a deposit if the amount that would otherwise fall within the sub-paragraph in question in relation to the grant or (as the case requires) assignment of the lease is not more than twice the relevant maximum rent.

(4) The relevant maximum rent is—

(a) in relation to the grant of a lease, the highest amount of rent payable in respect of any consecutive twelve month period in the first five years of the term;

(b) in relation to the assignment of a lease, the highest amount of rent payable in respect of any consecutive twelve month period in the first five years of the term remaining outstanding as at the date of the assignment,

the highest amount of rent being determined (in either case) in the same way as the highest amount of rent mentioned in paragraph 7(3).

(5) Tax is not chargeable by virtue of this paragraph—

(a) merely because of paragraph 9A of Schedule 5 (which excludes the 0% band in Table B in section 55(2) in cases where the relevant rent attributable to non-residential property is not less than £1,000 a year), or

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

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

Transactions in connection with dissolution of civil partnership etc

3A

A 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);

(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.

Gifts with reservation

Authorised unit trusts, OEICs and common investment funds

Use of electronic means of payment under other provisions

Definition of liabilities and assets of National Loans Fund

Payments in error from or to National Loans Fund

Deemed supplies

Acquisition by property trader from personal representatives

Transfer of chargeable interest to a partnership: general

Transfer of chargeable interest to a partnership: chargeable consideration including rent

Transfer of chargeable interest from a partnership: sum of the lower proportions

Exclusion of market rent leases

Acquisition of interest in partnership not chargeable except as specially provided

Interpretation: transfer of chargeable interest to a partnership

Application of disadvantaged areas relief

Application of charities relief

Application of disadvantaged areas relief

Interpretation: arrangements

Interpretation: transfer of chargeable interest to a partnership

Transactions that are not notifiable

Interpretation: transfer of chargeable interest to a partnership

Meaning of “restricted shares”

Purchaser bearing inheritance tax liability

16A

Where—

(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

16C

Costs 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.

73A

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

Transfer of chargeable interest to a partnership: chargeable consideration including rent

Introduction

Transfer of chargeable interest to a partnership: chargeable consideration including rent

Transfer of chargeable interest to a partnership: sum of the lower proportions

Transactions that are not notifiable

Interpretation: transfer of chargeable interest to a partnership

Transfer of chargeable interest to a partnership: general

Transfer of chargeable interest from a partnership: sum of the lower proportions

Application of disadvantaged areas relief

Application of group relief

Application of charities relief

Transactions that are not notifiable

Interpretation: transfer of chargeable interest to a partnership

Meaning of “lease”

Reallocation of trust property as between beneficiaries

8

Where—

(a) the trustees of a settlement reallocate trust property in such a way that a beneficiary acquires an interest in certain trust property and ceases to have an interest in other trust property, and

(b) the beneficiary consents to ceasing to have an interest in that other property,

the fact that he gives consent does not mean that there is chargeable consideration for the acquisition.

Backdated lease granted to tenant holding over

9A

(1) This paragraph applies where—

(a) the tenant under a lease continues in occupation after the date on which, under its terms, the lease terminates (“the contractual termination date”),

(b) he is granted a new lease of the same or substantially the same premises, and

(2) The term of the new lease is treated for the purposes of this Part as beginning on the date on which it is expressed to begin.

(3) The rent payable under the new lease in respect of any period falling—

(a) after the contractual termination date, and

(b) before the date on which the new lease is granted,

is treated for the purposes of this Part as reduced by the amount of taxable rent that is payable in respect of that period otherwise than under the new lease.

(4) For the purposes of sub-paragraph (3) rent is “taxable” if or to the extent that it is taken into account in determining liability to stamp duty land tax.

(5) Sub-paragraph (3) does not have effect so as to require the rent payable under the new lease to be treated as a negative amount.

Exemption where homeworker’s additional expenses met by employer

Payroll giving: extension of 10% supplement to 5th April 2004

PAYE: regulations and notional payments

Payroll giving: extension of 10% supplement to 5th April 2004

Extension of first-year allowances for ICT expenditure by small enterprises

Repos etc

Exemption for fuel used in recycling processes

Supplies not known to be taxable when made, etc

Deemed supplies

Supplies not known to be taxable when made, etc

Gifts with reservation

Definition of liabilities and assets of National Loans Fund

Electricity from renewable sources etc

Higher rate of tax: divided companies

Application of CFC provisions to Hong Kong and Macao companies

Transfer of chargeable interest to a partnership: general

Transfer of chargeable interest to a partnership: chargeable consideration including rent

Application of charities relief

Application of disadvantaged areas relief

Interpretation: arrangements

Transfer of chargeable interest from a partnership consisting wholly of bodies corporate

Reallocation of trust property as between beneficiaries

Meaning of “lease”

58B

(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

(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

(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;

(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.

Options and rights of pre-emption

Acquisitions by certain health service bodies

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

73B

(1) An interest held by a financial institution as a result of the first transaction within the meaning of section 71A(1)(a)... 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)... ceases to have effect, or

(b) the right under section 71A(1)(d)... 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)....

75A

(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,

(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;

(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

(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

(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

(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

(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, ...

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

(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.

Crofting community right to buy

Anti-avoidance

Meaning of “market value”

Minor definitions

Abolition of stamp duty except on instruments relating to stock or marketable securities

Circumstances in which relief for company acquisitions withdrawn

PAYE on notional payments: reimbursement period

Charge and rates for 2003-04

Employee securities and options

Consequential amendments

Payroll giving: extension of 10% supplement to 5th April 2004

Transfers of value: attribution of gains to beneficiaries

Loan relationships: amendments

Authorised unit trusts, OEICs and common investment funds

Supplies not known to be taxable when made, etc

Personal pension arrangements: limit on contributions

Payments for service of national debt

Higher rate of tax: divided companies

Transfer of chargeable interest to a partnership: chargeable consideration including rent

Transfer of partnership interest pursuant to earlier arrangements

Exclusion of market rent leases

Application of charities relief

Transfer of chargeable interest to a partnership: chargeable consideration including rent

7

(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 ...

(3) Condition 2 is that one of the beneficiaries (“the social landlord”) is a qualifying body ....

(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

(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).

8

For 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.

9

(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.

10

(1) An equity-acquisition ... 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 ... 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.

11

Where 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 ... payment by the purchaser shall be treated for the purposes of stamp duty land tax as a payment of rent.

2A

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

2B

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

Transactions that are not notifiable

Application of group relief

27A

(1) This paragraph applies where in calculating the sum of the lower proportions in relation to a transaction (in accordance with paragraph 12)—

(a) a company (“the connected company”) would have been a corresponding partner of a relevant owner (“the original owner”) but for the fact that paragraph (b) of Step Two includes connected persons only if they are individuals, and

(b) the connected company and the original owner are members of the same group.

(2) The charge in respect of the transaction shall be reduced to the amount that would have been payable had the connected company been a corresponding partner of the original owner for the purposes of calculating the sum of the lower proportions.

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