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

(b) a company (“company A”) is “above” another company (“company B”) in a group structure if company B, or another company that is above company B in the group structure, is a 75% subsidiary of company A.

(4) In sub-paragraph (2)(c)—

“director”, in relation to a company, has the meaning given by section 67(1) of the Income Tax (Earnings and Pensions) Act 2003 (c. 1) (read with subsection (2) of that section) and includes any person falling within section 452(1) of the Corporation Tax Act 2010; and

“controlling director”, in relation to a company, means a director of the company who has control of it (construing control in accordance with sections 450 and 451 of the Corporation Tax Act 2010).

Recovery of group relief: supplementary

6

(1) The Inland Revenue may serve a notice on a person within paragraph 5(2) above requiring him within 30 days of the service of the notice to pay the amount that remains unpaid.

(2) Any such notice must be served before the end of the period of three years beginning with the date of the final determination mentioned in paragraph 5(1)(b).

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

(4) The notice has effect—

(a) for the purposes of the recovery from that person of the amount required to be paid and of interest on that amount, and

(b) for the purposes of appeals,

as if it were a notice of assessment and that amount were an amount of tax due from that person.

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

(6) A payment in pursuance of a notice under this paragraph is not allowed as a deduction in computing any income, profits or losses for any tax purpose.

Part 2 — Reconstruction and acquisition reliefs

Reconstruction relief

7

(1) Where—

(a) a company (“the acquiring company”) acquires the whole or part of the undertaking of another company (“the target company”) in pursuance of a scheme for the reconstruction of the target company, and

(b) the first, second and third conditions specified below are met,

a land transaction entered into for the purposes of or in connection with the transfer of the undertaking or part is exempt from charge.

Relief under this paragraph is referred to in this Part as “reconstruction relief”.

(2) The first condition is that the consideration for the acquisition consists wholly or partly of the issue of non-redeemable shares in the acquiring company to all the shareholders of the target company.

“Non-redeemable shares” means shares that are not redeemable shares.

(3) Where the consideration for the acquisition consists partly of the issue of non-redeemable shares as mentioned in the first condition, that condition is met only if the rest of the consideration consists wholly of the assumption or discharge by the acquiring company of liabilities of the target company.

(4) The second condition is that after the acquisition has been made—

(a) each shareholder of each of the companies is a shareholder of the other, and

(b) the proportion of shares of one of the companies held by any shareholder is the same, or as nearly as may be the same, as the proportion of shares of the other company held by that shareholder.

(5) The third condition is that the acquisition is effected for bona fide commercial reasons and does not form part of a scheme or arrangement of which the main purpose, or one of the main purposes, is the avoidance of liability to tax.

“Tax” here means stamp duty, income tax, corporation tax, capital gains tax or tax under this Part.

(5A) If immediately before the acquisition the target company or the acquiring company holds any of its own shares, the shares are to be treated for the purposes of sub-paragraphs (2) and (4) as having been cancelled before the acquisition (and, accordingly, the company is to be treated as if it were not a shareholder of itself).

(6) This paragraph is subject to paragraph 9 (withdrawal of reconstruction or acquisition relief).

Acquisition relief

8

(1) Where—

(a) a company (“the acquiring company”) acquires the whole or part of the undertaking of another company (“the target company”), and

(b) all the conditions specified below are met,

the amount of tax chargeable on a land transaction entered into for the purposes of or in connection with the transfer of the undertaking or part is limited to an amount equal to 0.5% of the chargeable consideration for the transaction.

Relief under this paragraph is referred to in this Part as “acquisition relief”.

(2) The first condition is that the consideration for the acquisition consists wholly or partly of the issue of non-redeemable shares in the acquiring company to—

(a) the target company, or

(b) all or any of the target company’s shareholders.

“Non-redeemable shares” means shares that are not redeemable shares.

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

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

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

(4) The second condition is that the acquiring company is not associated with another company that is a party to arrangements with the target company relating to shares of the acquiring company issued in connection with the transfer of the undertaking or part.

(5) For this purpose companies are associated if one has control of the other or both are controlled by the same person or persons.

The reference to control shall be construed in accordance with section 416 of the Taxes Act 1988.

(5A) The third condition is that the undertaking or part acquired by the acquiring company has as its main activity the carrying on of a trade that does not consist wholly or mainly of dealing in chargeable interests.

In this sub-paragraph “trade” has the same meaning as in the Taxes Act 1988.

(5B) The fourth condition is that the acquisition is effected for bona fide commercial reasons and does not form part of arrangements of which the main purpose, or one of the main purposes, is the avoidance of liability to tax.

“Tax” here means stamp duty, income tax, corporation tax, capital gains tax or tax under this Part.

(5C) In this paragraph “arrangements” include any scheme, agreement or understanding, whether or not legally enforceable.

(6) This paragraph is subject to paragraph 9 (withdrawal of reconstruction or acquisition relief).

Withdrawal of reconstruction or acquisition relief

9

(1) Where in the case of a transaction (“the relevant transaction”) that is exempt by virtue of reconstruction relief or is subject to a reduced rate of tax by virtue of acquisition relief—

(a) control of the acquiring company changes—

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

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

and

(b) at the time control of the acquiring company changes (“the relevant time”), it or a relevant associated company holds a chargeable interest—

(i) that was acquired by the acquiring company under the relevant transaction, or

(ii) that is derived from an interest so acquired,

and that has not subsequently been acquired at market value under a chargeable transaction in relation to which reconstruction or acquisition relief was available but was not claimed,

reconstruction or acquisition relief in relation to the relevant transaction, or an appropriate proportion of it, is withdrawn and tax is chargeable in accordance with this paragraph.

(2) The amount chargeable is the tax that would have been chargeable in respect of the relevant transaction but for reconstruction or acquisition relief if the chargeable consideration for that transaction had been an amount equal to—

(a) the market value of the subject-matter of the transaction, and

(b) if the acquisition was the grant of a lease at a rent, that rent,

or, as the case may be, an appropriate proportion of the tax that would have been so chargeable.

(3) In sub-paragraphs (1) and (2) “an appropriate proportion” means an appropriate proportion having regard to the subject-matter of the relevant transaction and what is held at the relevant time by the acquiring company or, as the case may be, by that company and any relevant associated companies.

(4) In this paragraph “relevant associated company”, in relation to the acquiring company, means a company—

(a) that is controlled by the acquiring company immediately before the control of that company changes, and

(b) of which control changes in consequence of the change of control of that company.

(5) In this paragraph—

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

(b) “control” shall be construed in accordance with sections 450 and 451 of the Corporation Tax Act 2010; and

(i) by a different person,

(ii) by a different number of persons, or

(iii) by two or more persons at least one of whom is not the person, or one of the persons, by whom the company was previously controlled.

(6) This paragraph has effect subject to paragraph 10 (cases in which reconstruction or acquisition relief not withdrawn).

Cases in which reconstruction or acquisition relief not withdrawn

10

(1) Reconstruction or acquisition relief is not withdrawn under paragraph 9 in the following cases.

(2) The first case is where control of the acquiring company changes as a result of a share transaction that is effected as mentioned in any of paragraphs (a) to (d) of paragraph 3 of Schedule 3 (transactions in connection with divorce etc).

(3) The second case is where control of the acquiring company changes as a result of a share transaction that—

(a) is effected as mentioned in paragraph 4(1) of Schedule 3, and

(b) meets the conditions in paragraph 4(2) of that Schedule (variation of testamentary dispositions etc).

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

An “exempt intra-group transfer” means a transfer of shares effected by an instrument that is exempt from stamp duty by virtue of section 42 of the Finance Act 1930 (c. 28) or section 11 of the Finance Act (Northern Ireland) 1954 (c. 23 (N. I.)) (transfers between associated bodies corporate).

But see paragraph 11 (withdrawal of relief in case of subsequent non-exempt transfer).

(5) The fourth case is where control of the acquiring company changes as a result of a transfer of shares to another company in relation to which share acquisition relief applies.

“Share acquisition relief” means relief under section 77 of the Finance Act 1986 (c. 41) and a transfer is one in relation to which that relief applies if an instrument effecting the transfer is exempt from stamp duty by virtue of that provision. But see paragraph 11 (withdrawal in case of subsequent non-exempt transfer).

(6) The fifth case is where—

(a) control of the acquiring company changes as a result of a loan creditor becoming, or ceasing to be, treated as having control of the company, and

(b) the other persons who were previously treated as controlling the company continue to be so treated.

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

11

(1) Where paragraph 10(4) (change of control of acquiring company as a result of exempt intra-group transfer) has effect to prevent the withdrawal of reconstruction or acquisition relief on a change of control of the acquiring company, but—

(a) a company holding shares in the acquiring company to which the exempt intra-group transfer related, or that are derived from shares to which that transfer related, ceases to be a member of the same group as the target company—

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

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

and

(b) the acquiring company or a relevant associated company, at that time (“the relevant time”), holds a chargeable interest—

(i) that was transferred to the acquiring company by the relevant transaction, or

(ii) that is derived from an interest that was so transferred,

and that has not subsequently been transferred at market value by a chargeable transaction in relation to which reconstruction or acquisition relief was available but was not claimed,

reconstruction or acquisition relief in relation to the relevant transaction, or an appropriate proportion of it, is withdrawn and tax is chargeable in accordance with this paragraph.

(2) Where paragraph 10(5) (change of control of acquiring company as a result of a transfer to which share acquisition relief applies) has effect to prevent the withdrawal of reconstruction or acquisition relief on a change of control of the acquiring company, but—

(a) control of the other company mentioned in that provision changes—

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

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

at a time when that company holds any shares transferred to it by the exempt transfer, or any shares derived from shares so transferred,

and

(b) the acquiring company or a relevant associated company, at that time (“the relevant time”), holds a chargeable interest—

(i) that was transferred to the acquiring company by the relevant transaction, or

(ii) that is derived from an interest that was so transferred,

and that has not subsequently been transferred at market value by a chargeable transaction in relation to which reconstruction or acquisition relief was available but was not claimed,

reconstruction or acquisition relief in relation to the relevant transaction, or an appropriate proportion of it, is withdrawn and tax is chargeable in accordance with this paragraph.

(3) The amount chargeable is the tax that would have been chargeable in respect of the relevant transaction but for reconstruction or acquisition relief if the chargeable consideration for that transaction had been an amount equal to the market value of the subject matter of the transaction or, as the case may be, an appropriate proportion of the tax that would have been so chargeable.

(4) In sub-paragraphs (1), (2) and (3) “an appropriate proportion” means an appropriate proportion having regard to the subject-matter of the relevant transaction and what is held at the relevant time by the acquiring company or, as the case may be, by that company and any relevant associated companies.

(5) In this paragraph “relevant associated company”, in relation to the acquiring company, means a company—

(a) that is controlled by the acquiring company immediately before the control of that company changes, and

(b) of which control changes in consequence of the change of control of that company.

(6) In this paragraph—

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

(b) “control” shall be construed in accordance with sections 450 and 451 of the Corporation Tax Act 2010; and

(i) by a different person,

(ii) by a different number of persons, or

(iii) by two or more persons at least one of whom is not the person, or one of the persons, by whom the company was previously controlled.

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

12

(1) This paragraph applies where—

(a) tax is chargeable under paragraph 9 or 11 (withdrawal of reconstruction or acquisition relief),

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

(2) The following persons may, by notice under paragraph 13, be required to pay the unpaid tax—

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

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

(3) For the purposes of sub-paragraph (2) “relevant time” means any time between effective date of the relevant transaction and the change of control by virtue of which tax is chargeable.

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

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

(a) “director”, in relation to a company, has the meaning given by section 67(1) of the Income Tax (Earnings and Pensions) Act 2003 (c. 1) (read with subsection (2) of that section) and includes any person falling within section 452(1) of the Corporation Tax Act 2010; and

(b) “controlling director”, in relation to a company, means a director of the company who has control of it (construing control in accordance with sections 450 and 451 of the Corporation Tax Act 2010).

Recovery of reconstruction or acquisition relief: supplementary

13

(1) The Inland Revenue may serve a notice on a person within paragraph 12(2) above requiring him within 30 days of the service of the notice to pay the amount that remains unpaid.

(2) Any such notice must be served before the end of the period of three years beginning with the date of the final determination mentioned in paragraph 12(1)(b).

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

(4) The notice has effect—

(a) for the purposes of the recovery from that person of the amount required to be paid and of interest on that amount, and

(b) for the purposes of appeals,

as if it were a notice of assessment and that amount were an amount of tax due from that person.

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

(6) A payment in pursuance of a notice under this paragraph is not allowed as a deduction in computing any income, profits or losses for any tax purpose.

SCHEDULE 8

Charities relief

1

(1) A land transaction is exempt from charge if the purchaser is a charity and the following conditions are met.

Relief under this Schedule is referred to in this Part as “charities relief”.

(2) The first condition is that the purchaser must intend to hold the subject-matter of the transaction for qualifying charitable purposes, ...

(3) The second condition is that the transaction must not have been entered into for the purpose of avoiding tax under this Part (whether by the purchaser or any other person).

(3A) For the purposes of this Schedule, a charity (“C”) holds a chargeable interest for qualifying charitable purposes if it holds it—

(a) for use in furtherance of the charitable purposes of C or another charity, or

(b) as an investment from which the profits are applied to the charitable purposes of C.

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

Withdrawal of charities relief

2

(1) Where in the case of a transaction (“the relevant transaction”) that is exempt by virtue of this Schedule —

(a) a disqualifying event occurs—

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

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

and

(b) at the time of the disqualifying event the purchaser holds a chargeable interest—

(i) that was acquired by the purchaser under the relevant transaction, or

(ii) that is derived from an interest so acquired,

charities relief in relation to the relevant transaction, or an appropriate proportion of it, is withdrawn and tax is chargeable in accordance with this paragraph.

(2) The amount chargeable is the amount that would have been chargeable in respect of the relevant transaction but for charities relief or, as the case may be, an appropriate proportion of the tax that would have been so chargeable.

(3) For the purposes of this paragraph a “disqualifying event” means—

(a) the purchaser ceasing to be established for charitable purposes only, or

(b) the subject-matter of the transaction, or any interest or right derived from it, being used or held by the purchaser otherwise than for qualifying charitable purposes.

(4) In sub-paragraphs (1) and (2) an “appropriate proportion” means an appropriate proportion having regard to—

(a) what was acquired by the purchaser under the relevant transaction and what is held by the purchaser at the time of the disqualifying event, and

(b) the extent to which what is held by the purchaser at that time becomes used or held for purposes other than qualifying charitable purposes.

(5) In this paragraph “qualifying charitable purposes” has the same meaning as in paragraph 1.

SCHEDULE 9

Right to buy transactions

1

(1) In the case of a right to buy transaction—

(a) section 51(1) (contingent consideration to be included in chargeable consideration on assumption that contingency will occur) does not apply, and

(b) any consideration that would be payable only if a contingency were to occur, or that is payable only because a contingency has occurred, does not count as chargeable consideration.

(2) A “right to buy transaction” means—

(a) the sale of a dwelling at a discount, or the grant of a lease of a dwelling at a discount, by a relevant public sector body, or

(b) the sale of a dwelling, or the grant of a lease of a dwelling, in pursuance of the preserved right to buy.

(3) The following are relevant public sector bodies for the purposes of sub-paragraph (2)(a):

Government

A Minister of the Crown

The Scottish Ministers

A Northern Ireland department

Local Government

A local housing authority within the meaning of the Housing Act 1985 (c. 68)

A county council in England

A council constituted under section 2 of the Local Government etc. (Scotland) Act 1994 (c. 39), the common good of such a council or any trust under its control

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

Social housing

The Regulator of Social Housing

Scottish Homes

The Northern Ireland Housing Executive

A non-profit registered provider of social housing

A registered social landlord

A housing action trust established under Part 3 of the Housing Act 1988 (c. 50)

New towns and development corporations etc.

The Homes and Communities Agency

The Greater London Authority so far as exercising its housing or regeneration functions or its new towns and urban development functions

A development corporation established by an order made, or having effect as if made, under the New Towns Act 1981 (c. 64)

A development corporation established by an order made, or having effect as if made, under the New Towns (Scotland) Act 1968 (c. 16)

A new town commission established under section 7 of the New Towns Act (Northern Ireland) 1965 (c. 13 (N.I.))

An urban development corporation established by an order made under section 135 of the Local Government, Planning and Land Act 1980 (c. 65)

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

Police

A local policing body within the meaning of section 101(1) of the Police Act 1996 (c. 16)

The Scottish Police Authority

The Northern Ireland Policing Board

Miscellaneous

An Education and Libraries Board within the meaning of the Education and Libraries (Northern Ireland) Order 1986 (S.I. 1986/594 (N.I. 3))

The United Kingdom Atomic Energy Authority

Any person mentioned in paragraphs (g), (k), (l) or (n) of section 61(11) of the Housing (Scotland) Act 1987 (c. 26)

A body prescribed for the purposes of this sub-paragraph by Treasury order.

(4) For the purposes of sub-paragraph (2)(b) the transfer of a dwelling, or the grant of a lease of a dwelling, is made in pursuance of the preserved right to buy if—

(a) the vendor is—

(i) in England and Wales, a person against whom the right to buy under Part 5 of the Housing Act 1985 (c. 68) is exercisable by virtue of section 171A of that Act, or

(ii) in Scotland, a person against whom the right to buy under section 61 of the Housing (Scotland) Act 1987 is exercisable by virtue of section 81A of that Act,

(which provide for the preservation of the right to buy on disposal to a private sector landlord),

(b) the purchaser is the qualifying person for the purposes of the preserved right to buy, and

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

(6) A grant under section 19 of the Housing and Regeneration Act 2008 which—

(a) is made by virtue of section 35 of that Act, or

(b) is otherwise made to a relevant provider of social housing (within the meaning of section 35 of that Act) in respect of discounts given by the provider on disposals of dwellings to tenants,

does not count as part of the chargeable consideration for a right to buy transaction to which the vendor is a relevant provider of social housing.

(7) A grant by the Greater London Authority which—

(a) is made by virtue of section 35 of the Housing and Regeneration Act 2008 as applied by section 333ZE of the Greater London Authority Act 1999, or

(b) is otherwise made to a relevant provider of social housing (within the meaning of section 35 of the Housing and Regeneration Act 2008) in respect of discounts given by the provider on disposals of dwellings to tenants,

does not count as part of the chargeable consideration for a right to buy transaction to which the vendor is a relevant provider of social housing.

Shared ownership lease: election for market value treatment

2

(1) This paragraph applies where—

(a) a lease is granted—

(i) by a qualifying body, or

(ii) in pursuance of the preserved right to buy,

(b) the conditions in sub-paragraph (2) are met, and

(2) The conditions are as follows—

(a) the lease must be of a dwelling;

(b) the lease must give the lessee or lessees exclusive use of the dwelling;

(d) the lease must be granted partly in consideration of rent and partly in consideration of a premium calculated by reference to—

(i) the market value of the dwelling, or

(ii) a sum calculated by reference to that value;

(e) the lease must contain a statement of—

(i) the market value of the dwelling, or

(ii) the sum calculated by reference to that value,

by reference to which the premium is calculated.

(3) An election for tax to be charged in accordance with this paragraph must be included in the land transaction return made in respect of the grant of the lease, or in an amendment of that return, and is irrevocable, so that the return may not be amended so as to withdraw the election.

(4) Where this paragraph applies the chargeable consideration for the grant of the lease shall be taken to be the amount stated in the lease in accordance with sub-paragraph (2)(e)(i) or (ii).

As to the tax treatment of the acquisition of the reversion in pursuance of the lease, see paragraph 3.

(4A) Where this paragraph applies no account shall be taken for the purposes of stamp duty land tax of the rent mentioned in sub-paragraph (2)(d).

(5) Section 118 (meaning of “market value”) does not apply in relation to the reference in sub-paragraph (2)(e) above to the market value of the dwelling.

Transfer of reversion under shared ownership lease where election made for market value treatment

3

The transfer of the reversion to the lessee or lessees under the terms of a lease to which paragraph 2 applies (shared ownership lease: election for market value treatment) is exempt from charge if—

(a) an election was made for tax to be charged in accordance with that paragraph, and

(b) any tax chargeable in respect of the grant of the lease has been paid.

Shared ownership lease: election where staircasing allowed

4

(1) This paragraph applies where—

(a) a lease is granted by a qualifying body or in pursuance of the preserved right to buy,

(b) the conditions in sub-paragraph (2) below are met, and

(2) The conditions are as follows—

(a) the lease must be of a dwelling;

(b) the lease must give the lessee or lessees exclusive use of the dwelling;

(c) the lease must provide that the lessee or lessees may, on the payment of a sum, require the terms of the lease to be altered so that the rent payable under it is reduced;

(d) the lease must be granted partly in consideration of rent and partly in consideration of a premium calculated by reference to—

(i) the premium obtainable on the open market for the grant of a lease containing the same terms as the lease but with the substitution of the minimum rent for the rent payable under the lease, or

(ii) a sum calculated by reference to that premium;

(e) the lease must contain a statement of the minimum rent and of—

(i) the premium obtainable on the open market, or

(ii) the sum calculated by reference to that premium,

by reference to which the premium is calculated.

(3) An election for tax to be charged in accordance with this paragraph must be included in the land transaction return made in respect of the grant of the lease, or in an amendment of that return, and is irrevocable, so that the return may not be amended so as to withdraw the election.

(4) Where this paragraph applies—

(a) the rent in consideration of which the lease is granted shall be taken to be the minimum rent stated in the lease in accordance with sub-paragraph (2)(e), and

(b) the chargeable consideration for the grant other than rent shall be taken to be the amount stated in the lease in accordance with sub-paragraph (2)(e)(i) or (ii).

(4A) See paragraph 15 for further provision in connection with relief for first-time buyers.

(5) In this paragraph the “minimum rent” means the lowest rent which could become payable under the lease if it were altered as mentioned in sub-paragraph (2)(c) at the date when the lease is granted.

Shared ownership leases: meaning of “qualifying body” and “preserved right to buy”

5

(1) This paragraph has effect for the purposes of paragraphs 2, 4 and 4A (shared ownership leases: election as to basis of taxation).

(2) A “qualifying body” means—

(a) a local housing authority within the meaning of the Housing Act 1985 (c. 68);

(b) a housing association within the meaning of—

(i) the Housing Associations Act 1985 (c. 69), or

(ii) Part 2 of the Housing (Northern Ireland) Order 1992 (S.I. 1992/1725 (N.I. 15));

(d) the Northern Ireland Housing Executive;

(e) the Homes and Communities Agency;

(ea) the Greater London Authority so far as exercising its housing or regeneration functions or its new towns and urban development functions;

(f) a development corporation established by an order made, or having effect as if made, under the New Towns Act 1981 (c. 64).

(g) a private registered provider of social housing that is not within paragraph (b) (subject to sub-paragraph (2A)).

(2A) A private registered provider of social housing within sub-paragraph (2)(g) (“R”) is only a qualifying body in relation to a lease of premises if the following has been funded with the assistance of a grant or other financial assistance made or given under section 19 of the Housing and Regeneration Act 2008 or by the Greater London Authority —

(a) the purchase or construction of the premises by R (or a person connected with R), or

(b) the adaptation of the premises by R (or a person connected with R) for use as a dwelling.

(2B) Section 1122 of the Corporation Tax Act 2010 (connected persons) has effect for the purposes of sub-paragraph (2A).

(3) A lease is granted “in pursuance of the preserved right to buy” if—

(a) the vendor is a person against whom the right to buy under Part 5 of the Housing Act 1985 is exercisable by virtue of section 171A of that Act (preservation of right to buy on disposal to private sector landlord),

(b) the lessee is, or lessees are, the qualifying person for the purposes of the preserved right to buy, and

Rent to mortgage or rent to loan: chargeable consideration

6

(1) The chargeable consideration for a rent to mortgage or rent to loan transaction is determined in accordance with this paragraph.

(2) A “rent to mortgage transaction” means—

(a) the transfer of a dwelling to a person, or

(b) the grant of a lease of a dwelling to a person,

pursuant to the exercise by that person of the right to acquire on rent to mortgage terms under Part 5 of the Housing Act 1985 (c. 68).

(3) The chargeable consideration for such a transaction is equal to the price that, by virtue of section 126 of the Housing Act 1985, would be payable for—

(a) a transfer of the dwelling to the person (where the rent to mortgage transaction is a transfer), or

(b) the grant of a lease of the dwelling to the person (where the rent to mortgage transaction is the grant of a lease),

if the person were exercising the right to buy under Part 5 of that Act.

(4) A “rent to loan transaction” means the execution of a heritable disposition in favour of a person pursuant to the exercise by that person of the right to purchase a house by way of the rent to loan scheme in Part 3 of the Housing (Scotland) Act 1987 (c. 26).

(5) The chargeable consideration for such a transaction is equal to the price that, by virtue of section 62 of the Housing (Scotland) Act 1987, would be payable for the house if the person were exercising the right to purchase under section 61 of that Act.

SCHEDULE 10

Part 1 — Land transaction returns

Contents of return

1

(1) A land transaction return must—

(a) be in the prescribed form,

(b) contain the prescribed information, and

(c) include a declaration by the purchaser (or each of them) that the return is to the best of his knowledge correct and complete.

(1A) Sub-paragraph (1)(c) is subject to paragraphs 1A and 1B.

(2) In sub-paragraph (1) “prescribed” means prescribed by regulations made by the Inland Revenue.

(3) The regulations may make different provision for different kinds of return.

(4) Regulations under sub-paragraph (1)(b) may require the provision of information corresponding to any of the particulars formerly required under—

(a) Schedule 2 to the Finance Act 1931 (c. 28) (requirement to deliver particulars of land transactions in Great Britain), or

(b) section 244 of the Finance Act 1994 (c. 9) (corresponding provision for Northern Ireland).

(5) The return is treated as containing any information provided by the purchaser for the purpose of completing the return.

Meaning of filing date and delivery of return

2

(1) References in this Part of this Act to the filing date, in relation to a land transaction return, are to the last day of the period within which the return must be delivered.

(2) References in this Part of this Act to the delivery of a land transaction return are to the delivery of a return that—

(a) complies with the requirements of paragraph 1(1) (contents of return), ...

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

Failure to deliver return: flat-rate penalty

3

(1) A person who is required to deliver a land transaction return and fails to do so by the filing date is liable to a flat-rate penalty under this paragraph.

He may also be liable to a tax-related penalty under paragraph 4.

(2) The penalty is—

(a) £100 if the return is delivered within three months after the filing date, and

(b) £200 in any other case.

4

(1) A purchaser who is required to deliver a land transaction return in respect of a chargeable transaction and fails to do so within twelve months after the filing date is liable to a tax-related penalty under this paragraph.

This is in addition to any flat-rate penalty under paragraph 3.

(2) The penalty is an amount not exceeding the amount of tax chargeable in respect of the transaction.

Formal notice to deliver return: daily penalty

5

(1) If it appears to the Inland Revenue—

(a) that a purchaser required to deliver a land transaction return in respect of a chargeable transaction has failed to do so, and

(b) that the filing date has now passed,

they may issue a notice requiring him to deliver a land transaction return in respect of the transaction.

(2) The notice must specify—

(a) the transaction to which it relates, and

(b) the period for complying with the notice (which must not be less than 30 days from the date of issue of the notice).

(3) If the purchaser does not comply with the notice within the specified period, the Inland Revenue may apply to the tribunal for an order imposing a daily penalty.

(4) On such an application the tribunal may direct that the purchaser shall be liable to a penalty or penalties not exceeding £60 for each day on which the failure continues after the day on which he is notified of the direction.

(5) This paragraph does not affect, and is not affected by, any penalty under paragraph 3 or 4 (flat-rate or tax-related penalty for failure to deliver return).

Amendment of return by purchaser

6

(1) The purchaser may amend a land transaction return given by him by notice to the Inland Revenue.

(2) The notice must be in such form, and contain such information, as the Inland Revenue may require.

(2A) If the effect of the amendment would be to entitle the purchaser to a repayment of tax, the notice must be accompanied by—

(a) the contract for the land transaction; and

(b) the instrument (if any) by which that transaction was effected.

(3) Except as otherwise provided, an amendment may not be made more than twelve months after the filing date.

Correction of return by Revenue

7

(1) The Inland Revenue may amend a land transaction return so as to correct obvious errors or omissions in the return (whether errors of principle, arithmetical mistakes or otherwise).

(1A) The power under sub-paragraph (1) may, in such circumstances as the Commissioners for Her Majesty's Revenue and Customs may specify in regulations, be exercised—

(a) in relation to England and Wales, by the Chief Land Registrar;

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

(d) in any case, by such other persons with functions relating to the registration of land as the regulations may specify.

(2) A correction under this paragraph is made by notice to the purchaser.

(3) No such correction may be made more than nine months after—

(a) the day on which the return was delivered, or

(b) if the correction is required in consequence of an amendment under paragraph 6, the day on which that amendment was made.

(4) A correction under this paragraph is of no effect if the purchaser—

(a) amends the return so as to reject the correction, or

(b) after the end of the period within which he may amend the return, but within three months from the date of issue of the notice of correction, gives notice rejecting the correction.

(5) Notice under sub-paragraph (4)(b) must be given to the officer of the Board by whom notice of the correction was given.

Penalty for incorrect or uncorrected return

8

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

Part 2 — Duty to keep and preserve records

Duty to keep and preserve records

9

(1) A purchaser who is required to deliver a land transaction return must—

(a) keep such records as may be needed to enable him to deliver a correct and complete return, and

(b) preserve those records in accordance with this paragraph.

(2) The records must be preserved until the end of the later of the relevant day and the date on which—

(a) an enquiry into the return is completed, or

(b) if there is no enquiry, the Inland Revenue no longer have power to enquire into the return.

(2A) “The relevant day” means—

(a) the sixth anniversary of the effective date of the transaction, or

(b) such earlier day as may be specified in writing by the Commissioners for Her Majesty's Revenue and Customs (and different days may be specified for different cases).

(3) The records required to be kept and preserved under this paragraph include—

(a) relevant instruments relating to the transaction, in particular, any contract or conveyance, and any supporting maps, plans or similar documents;

(b) records of relevant payments, receipts and financial arrangements.

(4) The Commissioners for Her Majesty's Revenue and Customs may by regulations—

(a) provide that the records required to be kept and preserved under this paragraph include, or do not include, records specified in the regulations, and

(b) provide that those records include supporting documents so specified.

(5) Regulations under this paragraph may make provision by reference to things specified in a notice published by the Commissioners for Her Majesty's Revenue and Customs in accordance with the regulations (and not withdrawn by a subsequent notice).

(6) “Supporting documents” includes accounts, books, deeds, contracts, vouchers and receipts.

Preservation of information instead of original records

10

The duty under paragraph 9 to preserve records may be satisfied—

(a) by preserving them in any form and by any means, or

(b) by preserving the information contained in them in any form and by any means,

subject to any conditions or exceptions specified in writing by the Commissioners for Her Majesty's Revenue and Customs.

Penalty for failure to keep and preserve records

11

(1) A person who fails to comply with paragraph 9 in relation to a transaction is liable to a penalty not exceeding £3,000, subject to the following exception.

(2) No penalty is incurred if the Inland Revenue are satisfied that any facts that they reasonably require to be proved, and that would have been proved by the records, are proved by other documentary evidence provided to them.

Part 3 — Enquiry into return

Notice of enquiry

12

(1) The Inland Revenue may enquire into a land transaction return if they give notice of their intention to do so (“notice of enquiry”)—

(a) to the purchaser,

(b) before the end of the enquiry period.

(2) The enquiry period is the period of nine months—

(a) after the filing date, if the return was delivered on or before that date;

(b) after the date on which the return was delivered, if the return was delivered after the filing date;

This is subject to the following qualification.

(2A) If—

(a) the Inland Revenue give notice, within the period specified in sub-paragraph (2), of their intention to enquire into a land transaction return delivered under section 80 (adjustment where contingency ceases or consideration is ascertained), 81 (further return where relief withdrawn) or 81A (return or further return in consequence of later linked transaction) ..., and

(b) it appears to the Inland Revenue to be necessary to give a notice under this paragraph in respect of an earlier land transaction return ...,

a notice may be given notwithstanding that the period referred to in sub-paragraph (2) has elapsed in relation to that earlier return.

(3) A return that has been the subject of one notice of enquiry may not be the subject of another, except one given in consequence of an amendment (or another amendment) of the return under paragraph 6.

Scope of enquiry

13

(1) An enquiry extends to anything contained in the return, or required to be contained in the return, that relates—

(a) to the question whether tax is chargeable in respect of the transaction, or

(b) to the amount of tax so chargeable.

This is subject to the following exception.

(2) If the notice of enquiry is given as a result of an amendment of the return under paragraph 6 (amendment by purchaser)—

(a) at a time when it is no longer possible to give notice of enquiry under paragraph 12, or

(b) after an enquiry into the return has been completed,

the enquiry into the return is limited to matters to which the amendment relates or that are affected by the amendment.

Notice to produce documents etc for purposes of enquiry

14

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

Appeal against notice to produce documents etc

15

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

Penalty for failure to produce documents etc

16

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

Amendment of self-assessment during enquiry to prevent loss of tax

17

(1) If at a time when an enquiry is in progress into a land transaction return the Inland Revenue form the opinion—

(a) that the amount stated in the self-assessment contained in the return as the amount of tax payable is insufficient, and

(b) that unless the assessment is immediately amended there is likely to be a loss of tax to the Crown,

they may by notice in writing to the purchaser amend the assessment to make good the deficiency.

(2) In the case of an enquiry that under paragraph 13(2) is limited to matters arising from an amendment of the return, sub-paragraph (1) above applies only so far as the deficiency is attributable to the amendment.

(3) For the purposes of this paragraph the period during which an enquiry is in progress is the whole of the period—

(a) beginning with the day on which notice of enquiry is given, and

(b) ending with the day on which the enquiry is completed.

Amendment of return by taxpayer during enquiry

18

(1) This paragraph applies if a return is amended under paragraph 6 (amendment by purchaser) at a time when an enquiry is in progress into the return.

(2) The amendment does not restrict the scope of the enquiry but may be taken into account (together with any matters arising) in the enquiry.

(3) So far as the amendment affects the amount stated in the self-assessment included in the return as the amount of tax payable, it does not take effect while the enquiry is in progress and—

(a) if the Inland Revenue state in the closure notice that they have taken the amendments into account and that—

(i) the amendment has been taken into account in formulating the amendments contained in the notice, or

(ii) their conclusion is that the amendment is incorrect,

the amendment shall not take effect;

(b) otherwise, the amendment takes effect when the closure notice is issued.

(4) For the purposes of this paragraph the period during which an enquiry is in progress is the whole of the period—

(a) beginning with the day on which notice of enquiry is given, and

(b) ending with the day on which the enquiry is completed.

Referral of questions to Special Commissioners during enquiry

19

(1) At any time when an enquiry is in progress into a land transaction return any question arising in connection with the subject-matter of the enquiry may be referred to the tribunal for determination.

(2) Notice of referral must be given—

(a) jointly by the purchaser and the Inland Revenue,

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

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

(4) More than one notice of referral may be given under this paragraph in relation to an enquiry.

(5) For the purposes of this paragraph the period during which an enquiry is in progress is the whole of the period—

(a) beginning with the day on which the notice of enquiry was given, and

(b) ending with the day on which the enquiry is completed.

Withdrawal of notice of referral

20

(1) The Inland Revenue or the purchaser may withdraw a notice of referral under paragraph 19 ....

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

Effect of referral on enquiry

21

(1) While proceedings on a referral under paragraph 19 are in progress in relation to an enquiry—

(a) no closure notice shall be given in relation to the enquiry, and

(b) no application may be made for a direction to give such a notice.

(2) For the purposes of this paragraph proceedings on a referral are in progress where—

(a) notice of referral has been given,

(b) the notice has not been withdrawn, and

(3) For the purposes of sub-paragraph (2)(c) a question referred is finally determined when—

(a) it has been determined by the tribunal, and

(b) there is no further possibility of the determination being varied or set aside (disregarding any power to grant permission to appeal out of time).

Effect of determination

22

(1) The determination of a question referred to the tribunal under paragraph 19 is binding on the parties to the referral in the same way, and to the same extent, as a decision on a preliminary issue in an appeal.

(2) The determination shall be taken into account by the Inland Revenue—

(a) in reaching their conclusions on the enquiry, and

(b) in formulating any amendments of the return required to give effect to those conclusions.

(3) Any right of appeal under paragraph 35 (appeals against assessments etc) may not be exercised so as to reopen the question determined except to the extent (if any) that it could be reopened if it had been determined as a preliminary issue in that appeal.

Completion of enquiry

23

(1) An enquiry under paragraph 12 is completed when the Inland Revenue by notice (a “closure notice”) inform the purchaser that they have completed their enquiries and state their conclusions.

(2) A closure notice must either—

(a) state that in the opinion of the Inland Revenue no amendment of the return is required, or

(b) make the amendments of the return required to give effect to their conclusions.

(3) A closure notice takes effect when it is issued.

Direction to complete enquiry

24

(1) The purchaser may apply to the tribunal for a direction that the Inland Revenue give a closure notice within a specified period.

(2) Any such application is to be subject to the relevant provisions of Part 5 of the Taxes Management Act 1970 (see, in particular, section 48(2)(b) of that Act).

(3) The tribunal hearing the application shall give a direction unless ... satisfied that the Inland Revenue have reasonable grounds for not giving a closure notice within a specified period.

Part 4 — Revenue determination if no return delivered

Determination of tax chargeable if no return delivered

25

(1) If in the case of a chargeable transaction no land transaction return is delivered by the filing date, the Inland Revenue may make a determination (a “Revenue determination”) to the best of their information and belief of the amount of tax chargeable in respect of the transaction.

(2) Notice of the determination must be served on the purchaser, stating the date on which it is issued.

(3) No Revenue determination may be made more than 4 years after the effective date of the transaction.

Determination to have effect as a self-assessment

26

(1) A Revenue determination has effect for enforcement purposes as if were a self-assessment by the purchaser.

(2) In sub-paragraph (1) “for enforcement purposes” means for the purposes of the following provisions of this Part of this Act—

(a) the provisions of this Schedule providing for tax-related penalties;

(b) section 87 (interest on unpaid tax);

(3) Nothing in this paragraph affects any liability of the purchaser to a penalty for failure to deliver a return.

Determination superseded by actual self-assessment

27

(1) If after a Revenue determination has been made the purchaser delivers a land transaction return in respect of the transaction, the self-assessment included in that return supersedes the determination.

(2) Sub-paragraph (1) does not apply to a return delivered—

(a) more than 4 years after the day on which the power to make the determination first became exercisable, or

(b) more than twelve months after the date of the determination,

whichever is the later.

(3) Where—

(a) proceedings have been begun for the recovery of any tax charged by a Revenue determination, and

(b) before the proceedings are concluded the determination is superseded by a self-assessment,

the proceedings may be continued as if they were proceedings for the recovery of so much of the tax charged by the self-assessment as is due and payable and has not been paid.

(4) Where—

(a) action is being taken under Part 1 of Schedule 8 to the Finance (No. 2) Act 2015 (enforcement of deduction from accounts) for the recovery of an amount (“the original amount”) of tax charged by a Revenue determination, and

(b) before that action is concluded, the determination is superseded by a self-assessment,

that action may be continued as if it were action for the purposes of the recovery of so much of the tax charged by the self-assessment as is due and payable, has not yet been paid and does not exceed the original amount.

Part 5 — Revenue assessments

Assessment where loss of tax discovered

28

(1) If the Inland Revenue discover as regards a chargeable transaction that—

(a) an amount of tax that ought to have been assessed has not been assessed, or

(b) an assessment to tax is or has become insufficient, or

they may make an assessment (a “discovery assessment”) in the amount or further amount that ought in their opinion to be charged in order to make good to the Crown the loss of tax.

(2) The power to make a discovery assessment in respect of a transaction for which the purchaser has delivered a return is subject to the restrictions specified in paragraph 30.

Assessment to recover excessive repayment of tax

29

(1) If an amount of tax has been repaid to any person that ought not to have been repaid to him, that amount may be assessed and recovered as if it were unpaid tax.

(2) Where the repayment was made with interest, the amount assessed and recovered may include the amount of interest that ought not to have been paid.

(3) The power to make an assessment under this paragraph in respect of a transaction for which the purchaser has delivered a land transaction return is subject to the restrictions specified in paragraph 30.

Restrictions on assessment where return delivered

30

(1) If the purchaser has delivered a land transaction return in respect of the transaction in question, an assessment under paragraph 28 or 29 in respect of the transaction—

(a) may only be made in the two cases specified in sub-paragraphs (2) and (3) below, and

(b) may not be made in the circumstances specified in sub-paragraph (5) below.

(2) The first case is where the situation mentioned in paragraph 28(1) or 29(1) is attributable to fraudulent or negligent conduct on the part of—

(a) the purchaser,

(b) a person acting on behalf of the purchaser, or

(3) The second case is where the Inland Revenue, at the time they—

(a) ceased to be entitled to give a notice of enquiry into the return, or

(b) completed their enquiries into the return,

could not have been reasonably expected, on the basis of the information made available to them before that time, to be aware of the situation mentioned in paragraph 28(1) or 29(1).

(4) For this purpose information is regarded as made available to the Inland Revenue if—

(a) it is contained in a land transaction return made by the purchaser,

(b) it is contained in any documents produced or information provided to the Inland Revenue for the purposes of an enquiry into any such return, or

(c) it is information the existence of which, and the relevance of which as regards the situation mentioned in paragraph 28(1) or 29(1)—

(i) could reasonably be expected to be inferred by the Inland Revenue from information falling within paragraphs (a) or (b) above, or

(ii) are notified in writing to the Inland Revenue by the purchaser or a person acting on his behalf.

(5) No assessment may be made if—

(a) the situation mentioned in paragraph 28(1) or 29(1) is attributable to a mistake in the return as to the basis on which the tax liability ought to have been computed, and

(b) the return was in fact made on the basis or in accordance with the practice generally prevailing at the time it was made.

Time limit for assessment

31

(1) The general rule is that no assessment may be made more than 4 years after the effective date of the transaction to which it relates.

(2) An assessment of a person to tax in a case involving a loss of tax brought about carelessly by the purchaser or a related person may be made at any time not more than 6 years after the effective date of the transaction to which it relates (subject to sub-paragraph (2A)).

(2A) An assessment of a person to tax in a case involving a loss of tax—

(a) brought about deliberately by the purchaser or a related person,

(b) attributable to a failure by the person to comply with an obligation under section 76(1) or paragraph 3(3)(a), 4(3)(a) or 8(3)(a) of Schedule 17A, ...

(c) attributable to arrangements in respect of which the person has failed to comply with an obligation under section 309, 310 or 313 of the Finance Act 2004 (obligation of parties to tax avoidance schemes to provide information to Her Majesty's Revenue and Customs), or

(d) attributable to arrangements which were expected to give rise to a tax advantage in respect of which the person was under an obligation to notify the Commissioners for Her Majesty's Revenue and Customs under section 253 of the Finance Act 2014 (duty to notify Commissioners of promoter reference number) but failed to do so,

may be made at any time not more than 20 years after the effective date of the transaction to which it relates.

(3) An assessment under paragraph 29 (assessment to recover excessive repayment of tax) is not out of time—

(a) in a case where notice of enquiry is given into the land transaction return delivered by the person concerned, if it is made before the enquiry is completed;

(b) in any case, if it is made within one year after the repayment in question was made.

(4) Where the purchaser has died—

(a) any assessment on the personal representatives of the deceased must be made within 4 years after his death, and

(b) an assessment shall not be made by virtue of sub-paragraph (2) in respect of a transaction of which the effective date was more than six years before the death.

(5) Any objection to the making of an assessment on the ground that the time limit for making it has expired can only be made on an appeal against the assessment.

(6) In this paragraph “related person”, in relation to a purchaser, means—

(a) a person acting on behalf of the purchaser, or

(b) a person who was a partner of the purchaser at the relevant time.

Assessment procedure

32

(1) Notice of an assessment must be served on the purchaser.

(2) The notice must state—

(a) the tax due,

(b) the date on which the notice is issued, and

(3) After notice of the assessment has been served on the purchaser, the assessment may not be altered except in accordance with the express provisions of this Part of this Act.

(4) Where an officer of the Board has decided to make an assessment to tax, and has taken all other decisions needed for arriving at the amount of the assessment, he may entrust to some other officer of the Board responsibility for completing the assessing procedure, whether by means involving the use of a computer or otherwise, including responsibility for serving notice of the assessment.

Part 6 — Relief in case of overpaid tax or excessive assessment

Relief in case of double assessment

33

(1) A person who believes he has been assessed to tax more than once in respect of the same matter may make a claim to the Inland Revenue for relief against any double charge .

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

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

(4) An appeal may be made against a decision on a claim for relief under this paragraph.

Relief in case of mistake in return

34

(1) This paragraph applies where—

(a) a person has paid an amount by way of tax but believes that the tax was not due, or

(b) a person has been assessed as liable to pay an amount by way of tax, or there has been a determination to that effect, but the person believes that the tax is not due.

(2) The person may make a claim to the Commissioners for Her Majesty's Revenue and Customs for repayment or discharge of the amount.

(3) Paragraph 34A makes provision about cases in which the Commissioners for Her Majesty's Revenue and Customs are not liable to give effect to a claim under this paragraph.

(4) The following make further provision about making and giving effect to claims under this paragraph—

(a) paragraphs 34B to 34D, and

(b) Schedule 11A.

(5) Paragraph 34E makes provision about the application of this paragraph and paragraphs 34A to 34D to amounts paid under contract settlements.

(6) The Commissioners for Her Majesty's Revenue and Customs are not liable to give relief in respect of a case described in sub-paragraph (1)(a) or (b) except as provided—

(a) by this Schedule and Schedule 11A (following a claim under this paragraph), or

(b) by or under another provision of this Part of this Act.

(7) For the purposes of this paragraph and paragraphs 34A to 34E, an amount paid by one person on behalf of another is treated as paid by the other person.

Part 7 — Reviews and appeals

Right of appeal

35

(1) An appeal may be brought against—

(a) an amendment of a self-assessment under paragraph 17 (amendment by Revenue during enquiry to prevent loss of tax),

(b) a conclusion stated or amendment made by a closure notice,

(d) an assessment under paragraph 29 (assessment to recover excessive repayment), or

(e) a Revenue determination under paragraph 25 (determination of tax chargeable if no return delivered).

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

(3) If An appeal under sub-paragraph (1)(a) against an amendment of a self-assessment is made while an enquiry is in progress none of the steps mentioned in paragraph 36A(2)(a) to (c) may be taken in relation to the appeal until the enquiry is completed.

Notice of appeal

36

(1) Notice of an appeal under paragraph 35 must be given—

(a) in writing,

(b) within 30 days after the specified date,

(2) In relation to an appeal under paragraph 35(1)(a)—

(a) the specified date is the date on which the notice of amendment was issued, and

(b) the relevant officer of the Board is the officer by whom the notice of amendment was given.

(3) In relation to an appeal under paragraph 35(1)(b)—

(a) the specified date is the date on which the closure notice was issued, and

(b) the relevant officer of the Board is the officer by whom the closure notice was given.

(4) In relation to an appeal under paragraph 35(1)(c) or (d)—

(a) the specified date is the date on which the notice of assessment was issued, and

(b) the relevant officer of the Board is the officer by whom the notice of assessment was given.

(4A) In relation to an appeal under paragraph 35(1)(e) —

(a) the specified date is the date on which the Revenue determination was issued, and

(b) the relevant officer of the Board is the officer by whom the determination was made.

(5) The notice of appeal must specify the grounds of appeal.

(5A) The only grounds on which an appeal lies under paragraph 35(1)(e) are that—

(a) the purchase to which the determination relates did not take place,

(b) the interest in the land to which the determination relates has not been purchased,

(c) the contract for the purchase of the interest to which the determination relates has not been substantially performed, or

(d) the land transaction is not notifiable (for example, because the land transaction is exempt from charge under Schedule 3).

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

Settling of appeals by agreement

37

(1) If, before an appeal under paragraph 35 is determined, the appellant and the Inland Revenue agree that the decision appealed against—

(a) should be upheld without variation,

(b) should be varied in a particular manner, or

the same consequences shall follow, for all purposes, as would have followed if, at the time the agreement was come to, the tribunal had determined the appeal and had upheld the decision without variation, varied it in that manner or discharged or cancelled it, as the case may be.

(2) Sub-paragraph (1) does not apply if, within 30 days from the date when the agreement was come to, the appellant gives notice in writing to the Inland Revenue that he wishes to withdraw from the agreement.

(3) Where the agreement is not in writing—

(a) sub-paragraphs (1) and (2) do not apply unless the fact that an agreement was come to, and the terms agreed, are confirmed by notice in writing given by the Inland Revenue to the appellant or by the appellant to the Inland Revenue, and

(b) the references in those provisions to the time when the agreement was come to shall be read as references to the time when the notice of confirmation was given.

(4) Where—

(a) the appellant notifies the Inland Revenue, orally or in writing, that he does not wish to proceed with the appeal, and

(b) the Inland Revenue do not, within 30 days after that notification, give the appellant notice in writing indicating that they are unwilling that the appeal should be withdrawn,

the provisions of sub-paragraphs (1) to (3) have effect as if, at the date of the appellant’s notification, the appellant and the Inland Revenue had come to an agreement (orally or in writing, as the case may be) that the decision under appeal should be upheld without variation.

(5) References in this paragraph to an agreement being come to with an appellant, and to the giving of notice or notification by or to the appellant, include references to an agreement being come to, or notice or notification being given by or to, a person acting on behalf of the appellant in relation to the appeal.

Recovery of tax not postponed by appeal

38

(1) Where there is an appeal ... under paragraph 35, the tax charged by the amendment or assessment in question remains due and payable as if there had been no appeal.

(2) Sub-paragraph (1) is subject to—

paragraph 39 (direction by the tribunal postponing payment), and

paragraph 40 (agreement to postpone payment).

Direction by Commissioners to postpone payment

39

(1) If the appellant has grounds for believing that the amendment or assessment overcharges the appellant to tax, or as a result of the conclusion stated in the closure notice the tax charged on the appellant is excessive, the appellant may—

(a) first apply by notice in writing to HMRC within 30 days of the specified date for a determination by them of the amount of tax the payment of which should be postponed pending the determination of the appeal;

(b) where such a determination is not agreed, refer the application for postponement to the tribunal within 30 days from the date of the document notifying HMRC’s decision on the amount to be postponed.

An application under sub-paragraph (a) must state the amount believed to be overcharged to tax and the grounds for that belief.

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

(3) An application may be made more than 30 days after the specified date if there is a change in the circumstances of the case as a result of which the appellant has grounds for believing that he is overcharged to tax by the decision appealed against.

(4) If, after any determination on such an application of the amount of tax the payment of which should be postponed, there is a change in the circumstances of the case as a result of which either party has grounds for believing that the amount so determined has become excessive or, as the case may be, insufficient, he may, if the parties cannot agree on a revised determination, apply, at any time before the determination of the appeal, to the tribunal for a revised determination of that amount.

(5) An application under this paragraph is to be subject to the relevant provisions of Part 5 of the Taxes Management Act 1970 (see, in particular, section 48(2)(b) of that Act).

(6) The amount of tax of which payment is to be postponed pending the determination of the appeal is the amount (if any) by which it appears ..., that there are reasonable grounds for believing that the appellant is overcharged.

(7) Where an application is made under this paragraph, the date on which any tax of which payment is not postponed is due and payable shall be determined as if the tax were charged by an amendment or assessment of which notice was issued on the date on which the application was determined and against which there was no appeal.

(8) On the determination of the appeal—

(a) the date on which any tax payable in accordance with that determination is due and payable shall, so far as it is tax the payment of which had been postponed, or which would not have been charged by the amendment or assessment if there had been no appeal, be determined as if the tax were charged by an amendment or assessment—

(i) of which notice was issued on the date on which HMRC issues to the appellant a notice of the total amount payable in accordance with the determination, and

(ii) against which there had been no appeal, and

(b) any tax overpaid shall be repaid.

(9) Sub-paragraphs (10) and (11) apply where a person has been given an accelerated payment notice under Chapter 3 of Part 4 of the Finance Act 2014 and that notice has not been withdrawn.

(10) Nothing in this paragraph enables the postponement of the payment of (as the case may be)—

(a) the understated tax to which the payment specified in the notice under section 220(2)(b) of that Act relates, or

(b) the disputed tax specified in the notice under section 221(2)(b) of that Act.

(11) Accordingly, if the payment of an amount of tax within sub-paragraph (10)(b) is postponed by virtue of this paragraph immediately before the accelerated payment notice is given, it ceases to be so postponed with effect from the time that notice is given, and the tax is due and payable—

(a) if no representations were made under section 222 of that Act in respect of the notice, on or before the last day of the period of 90 days beginning with the day the notice is given, and

(b) if representations were so made, on or before whichever is later of—

(i) the last day of the 90 day period mentioned in paragraph (a), and

(ii) the last day of the period of 30 days beginning with the day on which HMRC's determination in respect of those representations is notified under section 222 of that Act.

Agreement to postpone payment of tax

40

(1) If the appellant and the relevant officer of the Board agree that payment of an amount of tax should be postponed pending the determination of the appeal, the same consequences shall follow, for all purposes, as would have followed if, at the time the agreement was come to, the tribunal had made a direction to the same effect.

This is without prejudice to the making of a further agreement or of a further direction.

(2) Where the agreement is not in writing—

(a) sub-paragraph (1) does not apply unless the fact that an agreement was come to, and the terms agreed, are confirmed by notice in writing given by the relevant officer of the Board to the appellant or by the appellant to that officer, and

(b) the reference in that provision to the time when the agreement was come to shall be read as a reference to the time when notice of confirmation was given.

(3) References in this paragraph to an agreement being come to with an appellant, and to the giving of notice to or by the appellant, include references to an agreement being come to, or notice being given to or by, a person acting on behalf of the appellant in relation to the appeal.

(4) Sub-paragraphs (9) to (11) of paragraph 39 apply for the purposes of this paragraph as they apply for the purposes of paragraph 39.

SCHEDULE 11

Part 1 — General

Introductory

1

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

Form and contents of self-certificate

2

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

3

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

Part 2 — Duty to keep and preserve records

Duty to keep and preserve records

4

(A1) This paragraph applies where a transaction is not notifiable, unless the transaction is a transaction treated as taking place under a provision listed in section 79(2)(a) to (d).

(1) The purchaser must—

(a) keep such records as may be needed to enable him to demonstrate that the transaction is not notifiable, and

(b) preserve those records in accordance with this paragraph.

(2) The records must be preserved until the end of—

(a) the sixth anniversary of the effective date of the transaction, or

(b) such earlier day as may be specified in writing by the Commissioners for Her Majesty's Revenue and Customs (and different days may be specified for different cases).

(3) The records required to be kept and preserved under this paragraph include—

(a) relevant instruments relating to the transaction, in particular, any contract or conveyance, and any supporting maps, plans or similar documents;

(b) records of relevant payments, receipts and financial arrangements.

(4) The Commissioners for Her Majesty's Revenue and Customs may by regulations—

(a) provide that the records required to be kept and preserved under this paragraph include, or do not include, records specified in the regulations, and

(b) provide that those records include supporting documents so specified.

(5) Regulations under this paragraph may make provision by reference to things specified in a notice published by the Commissioners for Her Majesty's Revenue and Customs in accordance with the regulations (and not withdrawn by a subsequent notice).

(6) “Supporting documents” includes accounts, books, deeds, contracts, vouchers and receipts.

Preservation of information instead of original records

5

The duty under paragraph 4 to preserve records may be satisfied—

(a) by preserving them in any form and by any means, or

(b) by preserving the information contained in them in any form and by any means,

subject to any conditions or exceptions specified in writing by the Commissioners for Her Majesty's Revenue and Customs.

Penalty for failure to keep and preserve records

6

(1) A person who fails to comply with paragraph 4 in relation to a transaction is liable to a penalty not exceeding £3,000, subject to the following exception.

(2) No penalty is incurred if the Inland Revenue are satisfied that any facts that they reasonably require to be proved, and that would have been proved by the records, are proved by other documentary evidence provided to them.

Part 3 — Enquiry into self-certificate

Notice of enquiry

7

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

Scope of enquiry

8

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

Notice to produce documents etc for purposes of enquiry

9

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

Appeal against notice to produce documents etc

10

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

Penalty for failure to produce documents etc

11

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

Referral of questions to Special Commissioners during enquiry

12

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

Withdrawal of notice of referral

13

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

Effect of referral on enquiry

14

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

Effect of determination

15

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

Completion of enquiry

16

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

Direction to complete enquiry

17

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

SCHEDULE 12

Part 1 — General

Issue of tax demands and receipts

1

(1) Where tax is due and payable, a collector may make demand of the sum charged from the person liable to pay it.

(2) On payment of the tax, the collector shall if so requested give a receipt.

Recovery of tax by distraint

2

(1) In ... Northern Ireland, if a person neglects or refuses to pay the sum charged, upon demand made by the collector, the collector may distrain upon the goods and chattels of the person charged (“the person in default”).

(2) For the purposes of levying such distress a justice of the peace, on being satisfied by information on oath that there is reasonable ground for believing that a person is neglecting or refusing to pay a sum charged, may issue a warrant in writing authorising a collector to break open, in the daytime, any house or premises, calling to his assistance any constable.

Every such constable shall, when so required, assist the collector in the execution of the warrant and in levying such distress in the house or premises.

(3) A levy or warrant to break open must be executed by, or under the direction of, and in the presence of, the collector.

(4) A distress levied by the collector shall be kept for five days, at the costs and charges of the person in default.

(5) If the person in default does not pay the sum due, together with the costs and charges, the distress shall be appraised by one or more independent persons appointed by the collector, and shall be sold by public auction by the collector for payment of the sum due and all costs and charges.

Any surplus resulting from the distress, after the deduction of the costs and charges and of the sum due, shall be restored to the owner of the goods distrained.

(6) The Treasury may by regulations make provision with respect to—

(a) the fees chargeable on or in connection with the levying of distress, and

(b) the costs and charges recoverable where distress has been levied.

Recovery of tax by diligence in Scotland

3

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

Part 2 — Court proceedings

Civil proceedings in magistrates' court or court of summary jurisdiction

4

(1) An amount not exceeding £2,000 due and payable by way of tax is in England and Wales or Northern Ireland recoverable summarily as a civil debt in proceedings brought in the name of the collector.

(2) All or any of the sums recoverable under this paragraph that are—

(a) due from any one person, and

(b) payable to any one collector,

may be included in the same complaint, summons or other document required to be laid before or issued by justices.

Each such document shall, as respects each such sum, be construed as a separate document and its invalidity as respects any one such sum does not affect its validity as respects any other such sum.

(3) Proceedings under this paragraph in England and Wales may be brought at any time within one year from the time when the matter complained of arose.

(4) In sub-paragraph (1) the expression “recoverable summarily as a civil debt” in relation to proceedings in Northern Ireland means recoverable by proceedings under Article 62 of the Magistrates' Courts (Northern Ireland) Order 1981 (S.I. 1981/1675 (N.I. 26)).

(5) The Treasury may by order increase the sum specified in sub-paragraph (1).

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Finance Act 2003

Recovery of group relief: supplementary

6

Part 2 — Reconstruction and acquisition reliefs

Reconstruction relief

7

Acquisition relief

8

Withdrawal of reconstruction or acquisition relief

9

Cases in which reconstruction or acquisition relief not withdrawn

10

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

11

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

12

Recovery of reconstruction or acquisition relief: supplementary

13

SCHEDULE 8

Charities relief

1

Withdrawal of charities relief

2

SCHEDULE 9

Right to buy transactions

1

Shared ownership lease: election for market value treatment

2

Transfer of reversion under shared ownership lease where election made for market value treatment

3

Shared ownership lease: election where staircasing allowed

4

Shared ownership leases: meaning of “qualifying body” and “preserved right to buy”

5

Rent to mortgage or rent to loan: chargeable consideration

6

SCHEDULE 10

Part 1 — Land transaction returns

Contents of return

1

Meaning of filing date and delivery of return

2

Failure to deliver return: flat-rate penalty

3

Failure to deliver return: tax-related penalty

4

Formal notice to deliver return: daily penalty

5

Amendment of return by purchaser

6

Correction of return by Revenue

7

Penalty for incorrect or uncorrected return

8

Part 2 — Duty to keep and preserve records

Duty to keep and preserve records

9

Preservation of information instead of original records

10

Penalty for failure to keep and preserve records

11

Part 3 — Enquiry into return

Notice of enquiry

12

Scope of enquiry

13

Notice to produce documents etc for purposes of enquiry

14

Appeal against notice to produce documents etc

15

Penalty for failure to produce documents etc

16

Amendment of self-assessment during enquiry to prevent loss of tax

17

Amendment of return by taxpayer during enquiry

18

Referral of questions to Special Commissioners during enquiry

19

Withdrawal of notice of referral

20