Finance Act 2013

• (a) the payment of which had been postponed, or

• (b) which would not have been charged by the amendment or assessment if there had been no appeal.

Payment of tax where there is a further appeal

53

• (1) Where a party to an appeal to the tribunal under paragraph 35 makes a further appeal, tax is to be payable or repayable in accordance with the determination of the tribunal or court (as the case may be), even though the further appeal is pending.

• (2) But if the amount charged by the assessment is altered by the order or judgment of the Upper Tribunal or court, then—

• (a) if too much tax has been paid, the amount overpaid must be refunded, with any interest allowed by the order or judgment, and

• (b) if too little tax has been charged, the amount undercharged is due and payable at the end of the 30 days beginning with the date on which HMRC issue to the other party a notice of the total amount payable in accordance with the order or judgment.

• (3) Sub-paragraph (4) applies where—

• (a) an accelerated payment notice has been given to a party to the appeal under Chapter 3 of Part 4 of FA 2014 (and not withdrawn), and

• (b) the assessment to which the appeal relates has effect, or partly has effect, to counteract the whole or part of the asserted advantage (within the meaning of section 219(3) of that Act) by reason of which the notice was given.

• (4) If, on the application of HMRC, the relevant court or tribunal considers it necessary for the protection of the revenue, it may direct that sub-paragraph (1) does not apply so far as the tax relates to the counteraction of the whole or part of the asserted advantage, and—

• (a) give permission to withhold all or part of any repayment, or

• (b) require the provision of adequate security before repayment is made.

• (5) “Relevant court or tribunal” means the tribunal or court from which permission or leave to appeal is sought.

References to “the tribunal”

54

• (1) In this Part of this Schedule “the tribunal” means—

• (a) the First-tier Tribunal, or

• (b) where determined by or under Tribunal Procedure Rules, the Upper Tribunal.

• (2) Sub-paragraph (1) does not apply so far as sub-paragraph (3) requires otherwise.

• (3) Where the question in any dispute on any appeal under paragraph 35(1) is of the market value of any single-dwelling interest, that question is to be determined on a reference by—

• (a) the Upper Tribunal, if the land is in England and Wales;

• (b) the Lands Tribunal for Scotland, if the land is in Scotland;

• (c) the Lands Tribunal for Northern Ireland, if the land is in Northern Ireland.

PART 8 — Supplementary

Application of Schedule in cases involving joint liability to tax

55

• (1) This paragraph applies where—

• (a) section 97(2) applies and the other persons mentioned in section 97(1)(b) include a company, or

• (b) section 97(4) applies and P is a company.

• (2) Any obligation to deliver a return with respect to the single-dwelling interest for the chargeable period concerned is a joint obligation of the persons who are jointly and severally liable under subsection (2) or (as the case may be) (4) of section 97; and a single return is required.

Partnerships

56

In relation to a return delivered by the responsible partners for a partnership, anything required or authorised under section 159 or 160 or this Schedule to be done by the responsible partners is required or authorised to be done by all the responsible partners.

Meaning of “return”

57

In this Schedule “return”, except where the contrary is indicated, means an annual tax on enveloped dwellings return or a return of the adjusted chargeable amount.

Meaning of “filing date”

58

“Filing date”, in relation to a return, means the day by the end of which the return is required to be delivered.

SCHEDULE 34

PART 1 — Information and inspection powers

1

Schedule 36 to FA 2008 (information and inspection powers) is amended as follows.

2

In paragraph 12A (powers to inspect property for valuation etc), in sub-paragraph (3)—

• (a) omit the “or” after paragraph (d), and

• (b) after paragraph (e) insert

, or (f) annual tax on enveloped dwellings.

3

After paragraph 21A insert—

(21B) (1) Where a person has delivered, for a chargeable period with respect to a single-dwelling interest— (a) an annual tax on enveloped dwellings return, or (b) a return of the adjusted chargeable amount, a taxpayer notice may not be given for the purpose of checking the person's annual tax on enveloped dwellings position as regards the matters dealt with in that return. (2) Sub-paragraph (1) does not apply where, or to the extent that, any of conditions A to C is met. (3) Condition A is that notice of enquiry has been given in respect of— (a) the return, or (b) a claim (or an amendment of a claim) made by the person in relation to the chargeable period, and the enquiry has not been completed. (4) In sub-paragraph (3) “notice of enquiry” means a notice under paragraph 8 of Schedule 33 to FA 2013 or paragraph 7 of Schedule 11A to FA 2003 (as applied by paragraphs 28(2) and 31(3) of Schedule 33 to FA 2013). (5) Condition B is that, as regards the person, an officer of Revenue and Customs has reason to suspect that— (a) an amount that ought to have been assessed to annual tax on enveloped dwellings for the chargeable period may not have been assessed, (b) an assessment to annual tax on enveloped dwellings for the chargeable period may be or have become insufficient, or (c) relief from annual tax on enveloped dwellings for the chargeable period may be or have become excessive. (6) Condition C is that the notice is given for the purpose of obtaining any information or document that is also required for the purpose of checking that person's position as regards a tax other than annual tax on enveloped dwellings. (7) In this Schedule references to a “single-dwelling interest” are to be read in accordance with section 108 of FA 2013.

4

In paragraph 37 (partnerships), after sub-paragraph (2A) insert—

(2B) Where, in respect of a single-dwelling interest (see paragraph 21B(7)) to which one or more companies are or were entitled as members of a partnership, any member of the partnership has— (a) delivered an annual tax on enveloped dwellings return or a return of the adjusted chargeable amount under Part 3 of FA 2013, or (b) made a claim under that Part of that Act, paragraph 21B (restrictions where taxpayer has delivered return) has effect as if that return had been delivered, or that claim had been made, by each member of the partnership.

5

In paragraph 63(1) (meaning of “tax” in the Schedule), after paragraph (h) insert—

(ha) annual tax on enveloped dwellings,

.

PART 2 — Penalties

Errors in returns

6

In Schedule 24 to FA 2007 (penalties for errors), in the Table in paragraph 1, after the entry relating to stamp duty reserve tax insert—

Annual tax on enveloped dwellings	Annual tax on enveloped dwellings return.
Annual tax on enveloped dwellings	Return of adjusted chargeable amount.

Failure to make returns

7

• (1) In Schedule 55 to FA 2009 (penalty for failure to make returns etc), in the Table in paragraph 1, after item 11 insert—

11A	Annual tax on enveloped dwellings	Annual tax on enveloped dwellings return under section 159 of FA 2013
11B	Annual tax on enveloped dwellings	Return of adjusted chargeable amount under section 160 of FA 2013

.

• (2) That Schedule, as amended by sub-paragraph (1), is taken to have come into force for the purposes of annual tax on enveloped dwellings on the date on which this Act is passed.

Failure to make payments on time

8

Paragraphs 9 to 12 contain amendments and modifications of Schedule 56 to FA 2009 (penalty for failure to make payments on time).

9

• (1) The Table in paragraph 1 of that Schedule is amended as follows.

• (2) After item 10 insert—

10A	Annual tax on enveloped dwellings	Amount payable under section 163(1) or (2) of FA 2013 (except an amount falling within item 23).	The date falling 30 days after the date specified in section 163(1) or (2) of FA 2013 as the date by which the amount must be paid

.

• (3) After item 15 insert—

15A	Annual tax on enveloped dwellings	Amount shown in determination under paragraph 18 of Schedule 33 to FA 2013	The date falling 30 days after the filing date for the return in question

.

• (4) In item 17, in the second column, for “or 10” substitute “ , 10 or 10A ” and in the third column for “15” substitute “ 15A ”.

10

• (1) Until paragraphs 2(13)(a) and 2(14)(a) of Schedule 11 to F(No. 3)A 2010 (which amend items 23 and 24) come into force, paragraph 1 of Schedule 56 to FA 2009 has effect as if—

• (a) in item 23 the references in the second and third columns to items 1 to 6, 9 or 10 included item 10A, and

• (b) in item 24 the reference in the second column to items 1 to 6, 9 or 10 included item 10A.

• (2) With effect from the coming into force of paragraphs 2(13)(a) and 2(14)(a) of Schedule 11 to F(No. 3)A 2010, paragraph 1 of Schedule 56 to FA 2009 is amended as follows—

• (a) in item 23, in the second and third columns, for “9, 10” substitute “ 9 to 10A ”;

• (b) in item 24, in the second column, for “9, 10” substitute “ 9 to 10A ”.

11

Until paragraph 3 of Schedule 11 to F(No. 3)A 2010 comes into force, paragraph 2(c) has effect as if the reference in that paragraph to items 1 to 10 were to items 1 to 10A.

12

Schedule 56 to FA 2009, as amended by paragraph 9, is taken to have come into force for the purposes of annual tax on enveloped dwellings on the date on which this Act is passed.

SCHEDULE 35

PART 1 — Miscellaneous amendments

Provisional collection of taxes

1

In section 1(1) of the Provisional Collection of Taxes Act 1968 (temporary statutory effect of House of Commons resolutions), after “stamp duty land tax,” insert “ annual tax on enveloped dwellings, ”.

Disclosure of tax avoidance schemes

2

In section 318(1) of FA 2004 (disclosure of tax avoidance schemes: interpretation), in the definition of “tax”—

• (a) omit the “or” after paragraph (f), and

• (b) after paragraph (g) insert

, or (h) annual tax on enveloped dwellings.

Definitions relating to charities

3

In paragraph 7 of Schedule 6 to FA 2010 (definition of “charity”, “charitable company” and “charitable trust”)—

• (a) omit the “and” after paragraph (g), and

• (b) after paragraph (h) insert

, and (i) annual tax on enveloped dwellings.

PART 2 — Transitory provision: the first chargeable period

4

In relation to the chargeable period beginning on 1 April 2013, section 159(annual tax on enveloped dwellings return) has effect as if subsections (2) and (3) of that section provided as follows—

(2) A return under subsection (1) must be delivered by the end of 1 October 2013 if the days on which the person is within the charge with respect to the interest include 1 April 2013. (3) If the days on which the person is within the charge with respect to the interest do not include 1 April 2013, the return must be delivered— (a) by the end of 1 October 2013, or (b) by the end of the period of 30 days beginning with the first day in the chargeable period on which the person is within the charge with respect to the interest, whichever is the later.

5

In relation to the chargeable period beginning on 1 April 2013, section 163(payment of tax) has effect as if subsection (1) of that section provided as follows—

(1) Tax charged on a person under section 99 with respect to a single-dwelling interest must be paid— (a) by the end of 31 October 2013, or (b) if later, by the end of the filing date for the return.

SCHEDULE 36

IHTA 1984

1

IHTA 1984 is amended as follows.

2

• (1) Section 162 (liabilities) is amended as follows.

• (2) In subsection (4), after “possible” insert “ and to the extent that it is not taken to reduce value in accordance with section 162B ”.

• (3) In subsection (5), after “possible” insert “ and to the extent that it is not taken to reduce value in accordance with section 162B ”.

3

After section 162 insert—

(162A) (1) To the extent that a liability is attributable to financing (directly or indirectly)— (a) the acquisition of any excluded property, or (b) the maintenance, or an enhancement, of the value of any such property, it may only be taken into account so far as permitted by subsections (2) to (4). (2) Where the property mentioned in subsection (1) has been disposed of, in whole or in part, for full consideration in money or money's worth, the liability may be taken into account up to an amount equal to so much of that consideration as— (a) is not excluded property, and (b) has not been used— (i) to finance (directly or indirectly) the acquisition of excluded property or the maintenance, or an enhancement, of the value of such property, or (ii) to discharge (directly or indirectly) any other liability that, by virtue of this section, would not be taken into account. (3) The liability may be taken into account up to an amount equal to the value of such of the property mentioned in subsection (1) as— (a) has not been disposed of, and (b) is no longer excluded property. (4) To the extent that any remaining liability is greater than the value of such of the property mentioned in subsection (1) as— (a) has not been disposed of, and (b) is still excluded property, it may be taken into account, but only so far as the remaining liability is not greater than that value for any of the reasons mentioned in subsection (7). (5) Subsection (6) applies where— (a) a liability or any part of a liability is attributable to financing (directly or indirectly)— (i) the acquisition of property that was not excluded property, or (ii) the maintenance, or an enhancement, of the value of such property, and (b) the property or part of the property— (i) has not been disposed of, and (ii) has become excluded property. (6) The liability or (as the case may be) the part may only be taken into account to the extent that it exceeds the value of the property, or the part of the property, that has become excluded property, but only so far as it does not exceed that value for any of the reasons mentioned in subsection (7). (7) The reasons are— (a) arrangements the main purpose, or one of the main purposes, of which is to secure a tax advantage, (b) an increase in the amount of the liability (whether due to the accrual of interest or otherwise), or (c) a disposal, in whole or in part, of the property. (8) In this section— - “arrangements” includes any scheme, transaction or series of transactions, agreement or understanding, whether or not legally enforceable, and any associated operations; - “remaining liability” means the liability mentioned in subsection (1) so far as subsections (2) and (3) do not permit it to be taken into account; - “tax advantage” means— 1. the avoidance or reduction of a charge to tax, or 2. the avoidance of a possible determination in respect of tax. (162B) (1) Subsection (2) applies if— (a) the whole or part of any value transferred by a transfer of value is to be treated as reduced, under section 104, by virtue of it being attributable to the value of relevant business property, and (b) the transferor has a liability which is attributable, in whole or in part, to financing (directly or indirectly)— (i) the acquisition of that property, or (ii) the maintenance, or an enhancement, of its value. (2) The liability is, so far as possible, to be taken to reduce the value attributable to the value of the relevant business property, before it is treated as reduced under section 104, but only to the extent that the liability— (a) is attributable as mentioned in subsection (1)(b), and (b) does not reduce the value of the relevant business property by virtue of section 110(b). (3) Subsection (4) applies if— (a) the whole or part of any value transferred by a transfer of value is to be treated as reduced, under section 116, by virtue of it being attributable to the agricultural value of agricultural property, and (b) the transferor has a liability which is attributable, in whole or in part, to financing (directly or indirectly)— (i) the acquisition of that property, or (ii) the maintenance, or an enhancement, of its agricultural value. (4) To the extent that the liability is attributable as mentioned in subsection (3)(b), it is, so far as possible, to be taken to reduce the value attributable to the agricultural value of the agricultural property, before it is treated as reduced under section 116. (5) Subsection (6) applies if— (a) part of the value of a person's estate immediately before death is attributable to the value of land on which trees or underwood are growing, (b) the value of the trees or underwood is to be left out of account, under section 125(2)(a), in determining the value transferred by the chargeable transfer made on the person's death, and (c) the person has a liability which is attributable, in whole or in part, to financing (directly or indirectly)— (i) the acquisition of the land or trees or underwood, (ii) planting the trees or underwood, or (iii) the maintenance, or an enhancement, of the value of the trees or underwood. (6) To the extent that the liability is attributable as mentioned in subsection (5)(c), it is, so far as possible, to be taken to reduce the value of the trees or underwood, before their value is left out of account. (7) Subject to subsection (8), to the extent that a liability is, in accordance with this section, taken to reduce value in determining the value transferred by a chargeable transfer, that liability is not then to be taken into account in determining the value transferred by any subsequent transfer of value by the same transferor. (8) Subsection (7) does not prevent a liability from being taken into account by reason only that the liability has previously been taken into account in determining the amount on which tax is chargeable under section 64. (9) For the purposes of subsections (1) to (4) and (7), references to a transfer of value or chargeable transfer include references to an occasion on which tax is chargeable under Chapter 3 of Part 3 (apart from section 79) and— (a) references to the value transferred by a transfer of value or chargeable transfer include references to the amount on which tax is then chargeable, and (b) references to the transferor include references to the trustees of the settlement concerned. (10) In this section— - “agricultural property” and “agricultural value” have the same meaning as in Chapter 2 of Part 5; - “relevant business property” has the same meaning as in Chapter 1 of Part 5. (162C) (1) This section applies for the purposes of determining the extent to which a liability is attributable as mentioned in section 162A(1) or (5) or 162B(1)(b), (3)(b) or (5)(c). (2) Where a liability was discharged in part before the time in relation to which the question as to whether or how to take it into account arises— (a) any part of the liability that, at the time of discharge, was not attributable as mentioned in subsection (1) is, so far as possible, to be taken to have been discharged first, (b) any part of the liability that, at the time of discharge, was attributable as mentioned in section 162B(1)(b), (3)(b) or (5)(c) is, so far as possible, only to be taken to have been discharged after any part of the liability within paragraph (a) was discharged, and (c) any part of the liability that, at the time of discharge, was attributable as mentioned in section 162A(1) or (5) is, so far as possible, only to be taken to have been discharged after any parts of the liability within paragraph (a) or (b) were discharged.

4

After section 175 (estate on death: liability to make future payments etc) insert—

(175A) (1) In determining the value of a person's estate immediately before death, a liability may be taken into account to the extent that— (a) it is discharged on or after death, out of the estate or from excluded property owned by the person immediately before death, in money or money's worth, and (b) it is not otherwise prevented, under any provision of this Act, from being taken into account. (2) Where the whole or any part of a liability is not discharged in accordance with paragraph (a) of subsection (1), the liability or (as the case may be) the part may only be taken into account for the purpose mentioned in that subsection to the extent that— (a) there is a real commercial reason for the liability or the part not being discharged, (b) securing a tax advantage is not the main purpose, or one of the main purposes, of leaving the liability or part undischarged, and (c) the liability or the part is not otherwise prevented, under any provision of this Act, from being taken into account. (3) For the purposes of subsection (2)(a) there is a real commercial reason for a liability, or part of a liability, not being discharged where it is shown that— (a) the liability is to a person dealing at arm's length, or (b) if the liability were to a person dealing at arm's length, that person would not require the liability to be discharged. (4) Where, by virtue of this section, a liability is not taken into account in determining the value of a person's estate immediately before death, the liability is also not to be taken into account in determining the extent to which the estate of any spouse or civil partner of the person is increased for the purposes of section 18. (5) In subsection (2)(b) “tax advantage” means— (a) a relief from tax or increased relief from tax, (b) a repayment of tax or increased repayment of tax, (c) the avoidance, reduction or delay of a charge to tax or an assessment to tax, or (d) the avoidance of a possible assessment to tax or determination in respect of tax. (6) In subsection (5) “tax” includes income tax and capital gains tax. (7) Where the liability is discharged as mentioned in subsection (1)(a) only in part— (a) any part of the liability that is attributable as mentioned in section 162A(1) or (5) is, so far possible, taken to be discharged first, (b) any part of the liability that is attributable as mentioned in section 162B(1)(b), (3)(b) or (5)(c) is, so far as possible, taken to be discharged only after any part of the liability within paragraph (a) is discharged, and (c) the liability so far as it is not attributable as mentioned in paragraph (a) or (b) is, so far as possible, taken to be discharged only after any parts of the liability within either of those paragraphs are discharged.

Commencement

5

• (1) Subject to sub-paragraph (2), the amendments made by this Schedule have effect in relation to transfers of value made, or treated as made, on or after the day on which this Act is passed.

• (2) Section 162B of IHTA 1984 (inserted by paragraph 3) only has effect in relation to liabilities incurred on or after 6 April 2013.

• (3) For the purposes of sub-paragraph (2), where a liability is incurred under an agreement—

• (a) if the agreement was varied so that the liability could be incurred under it, the liability is to be treated as having been incurred on the date of the variation, and

• (b) in any other case, the liability is to be treated as having been incurred on the date the agreement was made.

SCHEDULE 37

1

VERA 1994 is amended as follows.

2

• (1) Section 19 (rebates) is amended as follows.

• (2) In subsection (3), after paragraph (c) insert—

(ca) a qualifying application for a vehicle licence for the vehicle is made,

.

• (3) After that subsection insert—

(3ZA) An application for a vehicle licence is a qualifying application for the purposes of subsection (3)(ca) if— (a) paragraph 1ZA of Schedule 1 applies to the vehicle when the application is made, but (b) that paragraph did not apply to the vehicle when the licence which is unexpired when the application is made was taken out.

3

• (1) Section 22ZA (nil licences for vehicles for disabled persons: information) is amended as follows.

• (2) In subsection (1)(b), at the beginning insert “ falls within subsection (1A) or ”.

• (3) After subsection (1) insert—

(1A) Information falls within this subsection if it is— (a) the name, date of birth or national insurance number of a person who is in receipt of a relevant payment, or would be in receipt of such a payment but for— (i) regulations under section 86(1) of the Welfare Reform Act 2012 (treatment as in-patient in hospital or similar institution), or (ii) corresponding provision having effect in relation to personal independence payment in Northern Ireland; (b) in the case of a person who is or would be in receipt of personal independence payment attributable to entitlement to the mobility component, the rate of the payment to which the person is or would be entitled; (c) in the case of a person who has ceased or will cease to receive a relevant payment, the date on which the person ceased or will cease to receive it and the reason for the person ceasing to receive it. (1B) In subsection (1A) “relevant payment” means— (a) personal independence payment attributable to entitlement to the mobility component, and (b) armed forces independence payment.

• (4) In subsections (2) and (4), and in the heading, omit “nil”.

• (5) For subsection (5) substitute—

(5) In this section “relevant licence functions” means functions relating to applications for, and the issue of— (a) vehicle licences in respect of vehicles to which paragraph 1ZA of Schedule 1 applies, and (b) nil licences in respect of vehicles that are exempt vehicles under paragraph 19 of Schedule 2 or paragraph 7 of Schedule 4.

4

In section 62(1) (definitions), at the appropriate places insert—

“armed forces independence payment” means armed forces independence payment under a scheme established under section 1 of the Armed Forces (Pensions and Compensation) Act 2004,

, and

“personal independence payment” means personal independence payment under— (a) the Welfare Reform Act 2012, or (b) the corresponding provision having effect in Northern Ireland,

.

5

In Schedule 1 (annual rates of duty), in Part 1 after paragraph 1 insert—

(1ZA) (1) The annual rate of vehicle excise duty applicable to a vehicle to which this paragraph applies is 50 per cent of the rate which (but for this paragraph) would be applicable. (2) This paragraph applies to a vehicle when it is being used, or kept for use, by or for the purposes of a disabled person who is in receipt of personal independence payment by virtue of entitlement to the mobility component at the standard rate if— (a) the vehicle is registered under this Act in the name of the disabled person, and (b) no other vehicle registered in his or her name under this Act is— (i) a vehicle for which a vehicle licence taken out at a rate of duty reduced in accordance with sub-paragraph (1) is in force, or (ii) an exempt vehicle under paragraph 19 of Schedule 2 or paragraph 7 of Schedule 4. (3) This paragraph has effect as if a person were in receipt of personal independence payment by virtue of entitlement to the mobility component at the standard rate in any case where the person would be in receipt of that payment by virtue of that entitlement but for— (a) regulations under section 86(1) of the Welfare Reform Act 2012 (treatment as in-patient in hospital or similar institution), or (b) corresponding provision having effect in Northern Ireland. (4) For the purposes of sub-paragraph (2), a vehicle is to be treated as registered under this Act in the name of a person in receipt of personal independence payment by virtue of entitlement to the mobility component at the standard rate if it is so registered in the name of— (a) an appointee, or (b) a person nominated for the purposes of this paragraph by the person or an appointee. (5) In sub-paragraph (4) “appointee” means a person appointed pursuant to regulations made under (or having effect as if made under) the Social Security Administration Act 1992 or the Social Security Administration (Northern Ireland) Act 1992 to exercise any of the rights and powers of a person in receipt of personal independence payment.

6

• (1) In Schedule 2 (exempt vehicles), paragraph 19 is amended as follows.

• (2) In sub-paragraph (1), for paragraph (b) substitute—

(b) no other vehicle registered in his or her name under this Act is— (i) a vehicle for which a vehicle licence taken out at a rate of vehicle excise duty reduced in accordance with paragraph 1ZA(1) of Schedule 1 is in force, or (ii) an exempt vehicle under this paragraph or paragraph 7 of Schedule 4.

• (3) In sub-paragraph (2), after paragraph (a) insert—

(aa) he or she is in receipt of personal independence payment by virtue of entitlement to the mobility component at the enhanced rate, (ab) he or she is in receipt of armed forces independence payment,

.

• (4) After sub-paragraph (2A) insert—

(2B) This paragraph has effect as if a person were in receipt of personal independence payment by virtue of entitlement to the mobility component at the enhanced rate in any case where the person would be in receipt of that payment by virtue of that entitlement but for— (a) regulations under section 86(1) of the Welfare Reform Act 2012 (treatment as in-patient in hospital or similar institution), or (b) corresponding provision having effect in Northern Ireland.

• (5) In sub-paragraph (3), for “person in receipt of a disability living allowance by virtue of entitlement to the mobility component at the higher rate, or of a mobility supplement,” substitute “ disabled person who satisfies sub-paragraph (2) by virtue of paragraph (a), (aa), (ab) or (b) of that sub-paragraph ”.

• (6) In sub-paragraph (4)(a), after “disability living allowance,” insert “ personal independence payment or armed forces independence payment, ”.

7

The amendments made by this Schedule are treated as having come into force on 8 April 2013.

SCHEDULE 38

Introductory

1

VATA 1994 is amended as follows.

Valuation of supplies for private use

2

In Schedule 6 (valuation: special cases), before paragraph 1 insert—

(A1) (1) This paragraph applies if, in a prescribed accounting period, supplies of goods by a taxable person (“P”) arise by virtue of paragraph 5(1) of Schedule 4 (but otherwise than for a consideration) where road fuel which is or has previously been supplied to or imported or manufactured by P in the course of P's business is provided for, or appropriated to, private use. (2) For this purpose “road fuel is provided for, or appropriated to, private use” if— (a) it is provided or to be provided by P— (i) to an individual for private use in the individual's own car or a car allocated to the individual, and (ii) by reason of the individual's employment, (b) where P is an individual, it is appropriated or to be appropriated by P for private use in P's own car, or (c) where P is a partnership, it is provided or to be provided to any of the individual partners for private use in that partner's own car. (3) P may opt for all supplies of goods within sub-paragraph (1) made by P in the prescribed accounting period to be valued on the flat-rate basis. (4) On the flat-rate basis, the value of all supplies made to any one individual in respect of any one car is that determined in accordance with an order under paragraph B1. (B1) (1) The Treasury must, by order, make provision about the valuation of supplies on the flat-rate basis. (2) In particular, an order under this paragraph must— (a) set out a table (“the base valuation table”) by reference to which the value of supplies is to be determined until such time as the base valuation table is replaced under paragraph (b), (b) provide that at regular intervals— (i) the amounts specified in the base valuation table are to be revalorised by the Commissioners in accordance with the order, and (ii) a table (an “updated valuation table”) containing the revalorised amounts is to take effect (and replace any existing table) in accordance with the order, and (c) require the Commissioners to publish any updated valuation table before it takes effect, together with a statement specifying the date from which it has effect. (3) An order under this paragraph may provide for the base valuation table and any updated valuation table to be implemented or supplemented by either or both of the following— (a) rules set out in the order which explain how the value is to be determined by reference to any table; (b) notes set out in the order with respect to the interpretation or application of any table or any rules or notes. (4) Rules or notes may make different provision for different circumstances or cases. (C1) (1) For the purposes of this Part of this Schedule— (a) any reference to an individual's own car is to be construed as including any car of which for the time being the individual has the use, other than a car allocated to the individual, (b) subject to sub-paragraph (2), a car is at any time to be taken to be allocated to an individual if at that time it is made available (without any transfer of the property in it) either to the individual or to any other person, and is so made available by reason of the individual's employment and for private use, and (c) fuel provided by an employer to an employee and fuel provided to any person for private use in a car which, by virtue of paragraph (b), is for the time being taken to be allocated to the employee is to be taken to be provided to the employee by reason of the employee's employment. (2) For the purposes of this Part of this Schedule, in any prescribed accounting period a car is not regarded as allocated to an individual by reason of the individual's employment if— (a) in that period it was made available to, and actually used by, more than one of the employees of one or more employers and, in the case of each of them, it— (i) was made available to that employee by reason of the employment, but (ii) was not in that period ordinarily used by any one of them to the exclusion of the others, (b) in the case of each of the employees, any private use of the car made by the employee in that period was merely incidental to the employee's other use of it in that period, and (c) in that period it was not normally kept overnight on or in the vicinity of any residential premises where any of the employees was residing, except while being kept overnight on premises occupied by the person making the car available to them. (3) In this Part of this Schedule— - “employment” includes any office, and related expressions are to be construed accordingly; - “car” means a motor car as defined by paragraph 1A(4) and (5); - “road fuel” means hydrocarbon oil as defined by the Hydrocarbon Oil Duties Act 1979 (see section 1(2) of that Act) on which duty has been or is required to be paid in accordance with that Act. (4) The Treasury may, by order, amend the definition of “road fuel” in sub-paragraph (3). PART 2 Other provisions

.

3

In paragraph 6 of that Schedule (valuation of supplies of goods by virtue of paragraph 5(1) of Schedule 4 etc), in sub-paragraph (1), after “except where” insert “ the person making the supply opts under paragraph A1(3) above for valuation on the flat-rate basis or ”.

4

Omit sections 56 and 57 (fuel for private use).

5

In section 97(4) (orders subject to affirmative procedure), in paragraph (f)—

• (a) after “paragraph” insert “ B1, C1(4), ”, and

• (b) after “1A(7)” insert “ , 2A(4) ”.

Supplies to employees etc at less than open market value

6

After paragraph 2 of Schedule 6 insert—

(2A) (1) This paragraph applies if— (a) a taxable person (“P”) makes a supply of road fuel for a consideration, (b) the recipient of the supply is— (i) connected with P, or (ii) an employee or partner of P or a person who is connected with such an employee or partner, (c) the value of the supply would (in the absence of this paragraph) be less than its open market value, and (d) the recipient of the supply is not entitled to credit for the whole of the input tax arising on the supply. (2) The value of the supply is to be taken to be an amount equal to its open market value. (3) For the purposes of this paragraph— (a) “road fuel” means hydrocarbon oil as defined by the Hydrocarbon Oil Duties Act 1979 (see section 1(2) of that Act) on which duty has been or is required to be paid in accordance with that Act, and (b) any question whether a person is connected with another is to be determined in accordance with section 1122 of the Corporation Tax Act 2010. (4) The Treasury may, by order, amend the definition of “road fuel” in sub-paragraph (3)(a).

Commencement and transitional provision

7

• (1) The amendments made by paragraphs 2 to 4 come into force in relation to prescribed accounting periods beginning on or after 1 February 2014.

• (2) Subject to that, section 56 of VATA 1994 has effect on and after 11 December 2012 as if in subsection (2) of that section for the words after “it is supplied” there were substituted “ for consideration. ”

8

• (1) The amendment made by paragraph 6 is to be treated as coming into force on 11 December 2012 and has effect in relation to—

• (a) supplies of goods on or after the commencement day, and

• (b) supplies of goods in the period beginning with 11 December 2012 and ending immediately before the commencement day, if and to the extent that the goods are not made available before the end of that period to the person to whom they are supplied.

• (2) “The commencement day” means the day on which this Act is passed.

SCHEDULE 39

1

Part 4 of FA 2003 (stamp duty land tax) is amended as follows.

2

For section 45 (contract and conveyance: effect of transfer of rights) substitute—

(45) Schedule 2A contains— (a) provision about the application of section 44 (contract and conveyance) in certain cases where an assignment of rights, subsale or other transaction is entered into without the contract having been completed, and (b) other provision about such cases.

3

After Schedule 2 insert—

SCHEDULE 2A (1) (1) This Schedule applies where— (a) a person (“the original purchaser”) enters into a contract (“the original contract”) for the acquisition by that person of a chargeable interest under which the acquisition is to be completed by a conveyance, and (b) there is a pre-completion transaction. (2) A transaction is a “pre-completion transaction” for the purposes of sub-paragraph (1) if— (a) as a result of the transaction a person other than the original purchaser (“the transferee”) becomes entitled to call for a conveyance to that person of the whole or part of the subject-matter of the original contract, and (b) immediately before the transaction took place a person was entitled under the original contract to call for a conveyance of the whole or part of that subject-matter. (3) A transaction that effects a person's acquisition of the whole or part of the subject-matter of the original contract is not a pre-completion transaction. (4) The grant or assignment of an option is not a pre-completion transaction. (5) The fact that a transaction has the effect of discharging the original contract does not prevent that transaction from being a pre-completion transaction. (6) The reference in sub-paragraph (1)(a) to a contract does not include a contract that is an assignment of rights in relation to another contract. (7) In this Schedule references to “part of the subject-matter of the original contract”— (a) are to a chargeable interest that is the same as the chargeable interest referred to in sub-paragraph (1)(a) except that it relates to part only of the land concerned, and (b) also include, so far as is appropriate, interests or rights appurtenant or pertaining to the chargeable interest. (8) This Schedule does not apply where paragraph 12B of Schedule 17A (assignment of agreement for lease) applies. (2) (1) A pre-completion transaction is an “assignment of rights” if the entitlement of the transferee referred to in paragraph 1(2)(a) is an entitlement to exercise rights under the original contract. (2) A pre-completion transaction other than an assignment of rights is referred to in this Schedule as a “free-standing transfer”. (3) In this Schedule “the transferor”, in relation to a pre-completion transaction, means a party to the pre-completion transaction who immediately before the pre-completion transaction took place was entitled to call for a conveyance of (what became) the subject-matter of the pre-completion transaction. (4) References in this Schedule to the “subject-matter” of a pre-completion transaction— (a) are to the chargeable interest the conveyance of which the transferee is entitled to call for as a result of the pre-completion transaction, and (b) include, so far as appropriate, any interest or right appurtenant or pertaining to the chargeable interest. (3) The transferee is not regarded as entering into a land transaction by reason of the pre-completion transaction. (4) (1) This paragraph applies if the pre-completion transaction is an assignment of rights. (2) If the subject-matter of the original contract is conveyed to the transferee, the conveyance is taken to effect the completion of the original contract (despite section 44(10)). (3) Sub-paragraphs (4) to (6) apply if— (a) the subject-matter of the original contract is conveyed to the transferee, or (b) the original contract is substantially performed by the transferee. (4) The transferee is taken to be the purchaser under the land transaction effected as mentioned in section 44(3), or treated as effected under section 44(4). (5) For the purpose of determining the chargeable consideration for that land transaction, the land transaction is taken to give effect to a contract the consideration under which is— (a) the consideration under the original contract, and (b) the consideration for the assignment of rights. Paragraph 1 of Schedule 4 has effect accordingly (but this sub-paragraph does not allow any amount of consideration given by a person to be counted twice in determining the chargeable consideration). (6) In any case in which there is a relevant connection between parties as mentioned in paragraph 12(2) (minimum consideration rule), the chargeable consideration for the land transaction mentioned in sub-paragraph (4) of this paragraph is calculated (regardless of whether the consideration is taken to be the amount in paragraph (a), (b) or (c) of sub-paragraph 12(2)), as if in paragraph 1(1) of Schedule 4 the words, “or a person connected with him” were omitted. (7) The original contract is said to be “substantially performed by the transferee” where a land transaction is treated under section 44(4) as effected by reason of— (a) the transferee under the assignment of rights, or a person connected with the transferee, taking possession of the whole, or substantially the whole, of the subject-matter of the original contract, or (b) a substantial amount of the consideration being paid or provided by the transferee or a person connected with the transferee, or (c) consideration paid or provided by a person within paragraph (b) amounting, when taken together with consideration paid or provided by another person, to a substantial amount of the consideration. (8) References in sub-paragraph (7) to possession and to the payment or provision of a substantial amount of the consideration are to be read in accordance with section 44(6) and (7). (9) In sub-paragraph (5) “the consideration”— (a) in relation to the land transaction, means (what is to be taken to be) the consideration for the acquisition of the subject-matter of the land transaction; (b) in relation to the original contract, means the consideration for the acquisition of the subject-matter of that contract; (c) in relation to the assignment of rights, means the consideration for the transferee's acquisition of the rights to which that contract relates. (5) (1) Where paragraph 4(4) to (6) applies (assignment of rights: original contract completed or substantially performed) this Part of this Act has effect as if— (a) the effective date of the land transaction mentioned in paragraph 4(4) (“the transferee's land transaction”) were also the effective date of another land transaction (a “notional land transaction”), and (b) the original purchaser were the purchaser under that notional land transaction. The notional land transaction is referred to below as “associated with” the assignment of rights under which the original purchaser is the transferor. (2) Where sub-paragraph (1) applies and the assignment of rights mentioned in paragraph 4(1) (“the implemented assignment of rights”) was preceded by one or more related assignments of rights, then for the purposes of this Part of this Act there is taken to be, for each assignment of rights (other than the first) in the chain formed by the implemented assignment of rights and those preceding assignments of rights, an additional land transaction in the case of which— (a) the effective date is the effective date of the transferee's land transaction, and (b) the purchaser is the transferor under that assignment of rights. The additional land transaction is referred to below as “associated with” the assignment of rights. (3) For the purpose of determining the chargeable consideration for the notional land transaction, Schedule 4 has effect as if paragraph 1(1) of that Schedule provided that the chargeable consideration is (except as otherwise expressly provided) the total of amounts A and B. (4) For the purpose of determining the chargeable consideration for any additional land transaction, Schedule 4 has effect as if paragraph 1(1) of that Schedule provided that the chargeable consideration is (except as otherwise expressly provided) the total of amounts A, B and C. (5) For the purposes of sub-paragraphs (3) and (4)— - A is the total amount of any consideration in money or money's worth given (whether directly or indirectly) by any of the following as consideration under the original contract— 1. the transferee under the assignment of rights with which the notional land transaction or (as the case requires) the additional land transaction is associated; 2. where that assignment of rights is one in a chain of successive transactions that are pre-completion transactions in relation to the original contract (all having at least part of their subject-matter in common), the transferee under any subsequent pre-completion transaction in that chain; 3. a person connected with a person falling within paragraph (a) or (b); - B is the total amount of any other consideration in money or money's worth given as consideration under the original contract (directly or indirectly) by— 1. the purchaser (under the notional land transaction or, as the case requires, the additional land transaction), or 2. a person connected with the purchaser; - C is the amount of any consideration in money or money's worth given for the preceding assignment of rights by— 1. the purchaser (under the additional land transaction), or 2. a person connected with the purchaser. (6) In the definition of amount C, “the preceding assignment of rights” means the assignment of rights as a result of which the purchaser became entitled to call for a conveyance of (what became) the subject-matter of the assignment of rights associated with the additional land transaction. (7) In sub-paragraph (2) “related assignment of rights” means a transaction that is an assignment of rights in relation to the original contract and has some subject-matter in common with the implemented assignment of rights. (6) (1) This paragraph applies where paragraph 5(1) (transferor treated as making separate acquisition) applies by virtue of the substantial performance by the transferee of the original contract. (2) If the original contract is (to any extent) subsequently rescinded or annulled, or is for any other reason not carried into effect, the tax paid by virtue of paragraph 5(1), and any tax paid by virtue of paragraph 5(2), must (to that extent) be repaid by HMRC. (3) Repayment under sub-paragraph (2) must be claimed by amendment of the land transaction return made in respect of the notional or additional land transaction. (7) Where the transferee under the assignment of rights referred to in paragraph 4(1) is entitled to call for the conveyance of part, but not the whole, of the subject-matter of the original contract— (a) paragraph 4 applies as if the original contract, so far as relating to that part of its subject-matter, were a separate contract, and (b) the references in paragraph 5 to the original contract are to be read accordingly. (8) (1) This paragraph applies where— (a) the pre-completion transaction is an assignment of rights, and (b) either the subject-matter of the original contract is conveyed to the transferee or the original contract is substantially performed by the transferee. (2) This paragraph does not apply if the original contract is itself a free-standing transfer. See paragraphs 10 and 11 for the treatment of such cases. (3) In relation to a relevant land transaction, the general rule is that references in this Part of this Act to the vendor are to be read as references to the vendor under the original contract (but see sub-paragraphs (4) and (5)). (4) In cases where the original contract was substantially performed before the transferee became entitled to call for a conveyance of the whole or part of the subject-matter of the original contract, references in this Part of this Act to the vendor are to be read as references to the person who was the purchaser under the original contract when it was substantially performed. (5) In relation to a relevant land transaction, references to the vendor in the specified provisions (see sub-paragraph (6)) are to be read as including— (a) the vendor under the original contract, and (b) the transferor under any relevant assignment of rights. (6) The specified provisions are— (a) section 61(1)(a) (compliance with planning obligations: conditions for exemption); (b) section 66(1) and (2) (transfers involving public bodies); (c) paragraph 8(1)(a) of Schedule 4 (debt as consideration); (d) paragraph 10(2)(c) of Schedule 4 (carrying out of works); (e) paragraph 16 of Schedule 4 (indemnity given by vendor). (7) The following are “relevant land transactions”— (a) the land transaction effected by the conveyance mentioned in sub-paragraph (1)(b) or treated as effected by the substantial performance mentioned in that provision; (b) the notional land transaction mentioned in paragraph 5(1)(b) and any additional land transaction under paragraph 5(2). (8) In determining under section 108(1) whether or not a relevant land transaction such as is mentioned in sub-paragraph (7)(a) is linked to another transaction, it may be assumed that any of the following is the vendor under the relevant land transaction— (a) the vendor (determined in accordance with sub-paragraph (3)), or (b) the transferor under any relevant assignment of rights. (9) The following are “relevant assignments of rights” in relation to a relevant land transaction— (a) the assignment of rights mentioned in sub-paragraph (1)(a); (b) any other transaction that is an assignment of rights in relation to the original contract and has some subject-matter in common with the assignment of rights mentioned in paragraph (a). (9) (1) This paragraph applies where the pre-completion transaction is a free-standing transfer. (2) If the transferee acquires the subject-matter of the free-standing transfer, the consideration for the transaction effecting that acquisition is taken to include the consideration given for the free-standing transfer (if that would not otherwise be the case). (3) References in sub-paragraph (2) to an acquisition include an acquisition deemed to take place under section 44(4) (and the reference to the transaction effecting that acquisition is read accordingly). (4) An action taken by the transferee (or an assignee of the transferee) that would, if taken by the original purchaser, constitute (for the purposes of section 44(5)) the taking of possession of the whole or substantially the whole of the subject-matter of the original contract is treated as effecting the substantial performance of the original contract. (5) If a transaction that is a free-standing transfer in relation to a contract is also a free-standing transfer in relation to another contract (in particular, where there have been successive free-standing transfers), each of those contracts may be regarded as “the original contract” for the purposes of separate applications of sub-paragraph (4). (6) In sub-paragraph (4)— (a) the reference to the transferee includes a person connected with the transferee, and (b) the reference to an assignee of the transferee includes a person connected with such a person. (7) References in this paragraph to an assignee of the transferee are to a person who, as a result of a transaction that is an assignment of rights in relation to the free-standing transfer, is entitled to call for a conveyance of the whole or part of the subject-matter of the free-standing transfer. (10) (1) This paragraph applies where— (a) a land transaction is effected, or treated as effected, by an acquisition falling within paragraph 9(2) (read with paragraph 9(3)), or (b) paragraph 8(1) (meaning of “vendor” where the transferee is the assignee under an assignment of rights) would apply but for paragraph 8(2) (exclusion of cases where the original contract is itself a free-standing transfer). (2) In this paragraph “the relevant land transaction” means the land transaction— (a) mentioned in sub-paragraph (1)(a), or (b) in a case falling within sub-paragraph (1)(b), effected by the conveyance to the transferee of the subject-matter of the original contract or the substantial performance by the transferee of the original contract. (3) References in this paragraph to “the specified transaction” are to— (a) the free-standing transfer mentioned in paragraph 9(2), or (b) the original contract the subject-matter of which is conveyed to the transferee or which is substantially performed by the transferee. (4) The general rule is that in relation to the relevant land transaction references in this Part of this Act to “the vendor” are to be read as references to the vendor or (as the case may be) transferor under the first appropriate transaction (but see sub-paragraph (5)). (5) In relation to the relevant land transaction, references to the vendor in the specified provisions (see sub-paragraph (6)) are to be read as including— (a) the vendor under the first appropriate transaction, and (b) each person who is the transferor in the case of a relevant pre-completion transaction. (6) The specified provisions are— (a) section 61(1)(a) (compliance with planning obligations: conditions for exemption); (b) section 66(1) and (2) (transfers involving public bodies); (c) paragraph 8(1)(a) of Schedule 4 (debt as consideration); (d) paragraph 10(2)(c) of Schedule 4 (carrying out of works); (e) paragraph 16 of Schedule 4 (indemnity given by vendor). (7) In determining under section 108(1) whether or not the relevant land transaction is linked to another transaction it may be assumed that any of the following is the vendor under the relevant land transaction— (a) the vendor (determined under sub-paragraph (4)), or (b) the transferor under any relevant pre-completion transaction. (8) The following are “relevant pre-completion transactions” in relation to the relevant land transaction— (a) the specified transaction; (b) any other transaction that is a pre-completion transaction in relation to the original contract and has some subject-matter in common with the specified transaction. (11) (1) Subject to the following provisions of this paragraph, “the first appropriate transaction” means the original contract. (2) If the original contract is not performed at the same time as, and in connection with the performance of, the specified transaction, “the first appropriate transaction” means a transaction that is a pre-completion transaction in relation to the original contract and meets the following conditions. (3) The conditions are that the pre-completion transaction— (a) is performed at the time when the specified transaction is performed and (if it is not itself the specified transaction) is performed in connection with the performance of the specified transaction, (b) is a transaction on which the entitlement of the transferee to call for the conveyance of the subject-matter of the specified transaction depends, and (c) is not preceded by another pre-completion transaction meeting the conditions in paragraphs (a) and (b). (4) For the purposes of this paragraph— (a) a contract for a land transaction is taken to be “performed” when it is substantially performed or completed (whichever is earlier); (b) a free-standing transfer other than a contract is taken to be “performed” when the transferee under that free-standing transfer (or an assignee of that transferee, as defined in paragraph 9(7)) acquires the subject-matter of that free-standing transfer. (5) Where the specified transaction is a pre-completion transaction in relation to each of two or more contracts such as are mentioned in paragraph 1(1)(a) that together form a series of such contracts (each having some subject-matter in common with all the others), references in paragraph 10 and this paragraph to “the original contract” are to be read as references to the first contract in that series. (6) In this paragraph “the specified transaction” has the meaning given by paragraph 10(3). (12) (1) This paragraph applies where either of the following provisions applies— (a) paragraph 4(3) (assignment of rights: chargeable interest acquired or treated as acquired by transferee); (b) paragraph 9(2) (free-standing transfers: chargeable interest acquired or treated as acquired by transferee). (2) If there is a relevant connection between parties, then for the purposes of paragraph 1(1) of Schedule 4 the consideration given by the purchaser for the subject-matter of the land transaction referred to in paragraph 4(4) or 9(2) is taken to be— (a) the amount that it would be apart from this sub-paragraph, or (b) (if higher) the first minimum amount, or (c) (if higher than both those amounts) the second minimum amount. (3) There is a “relevant connection between parties” if— (a) the persons who are the transferor and transferee in relation to the pre-completion transaction mentioned in paragraph 4(1) or 9(1) (“the implemented transaction”) are connected with each other, or are not acting at arm's length, or (b) sub-paragraph (4) applies. (4) This sub-paragraph applies if— (a) the implemented transaction is one in a chain of successive transactions (all having at least part of their subject-matter in common) that are pre-completion transactions in relation to the original contract, and (b) a person who is the transferor in relation to a pre-completion transaction that precedes the implemented transaction in the chain of transactions is connected with, or not acting at arm's length in relation to, the transferee under the implemented transaction. (5) Where the implemented transaction is a pre-completion transaction in relation to— (a) a contract for a land transaction that is not itself a free-standing transfer in relation to any other contract, and (b) a contract, or two or more successive contracts, that are themselves free-standing transfers in relation to the contract mentioned in paragraph (a), references in this paragraph to “the original contract” are to the contract mentioned in paragraph (a) (and do not include any contract mentioned in paragraph (b)). (13) (1) “The first minimum amount” means— (a) if the chargeable interest acquired (or treated as acquired) under the land transaction referred to in paragraph 4(4) or 9(2) is the whole subject-matter of the original contract, the amount of any consideration (in money or money's worth) agreed to be given, under the terms of the original contract, for the acquisition of that subject-matter, or (b) if paragraph (a) does not apply, so much of the amount mentioned in paragraph (a) as is referable, on a just and reasonable apportionment, to the chargeable interest mentioned in that paragraph. This is subject to sub-paragraph (2). (2) If conditions A to C are met, “the first minimum amount” means the amount of any consideration (in money or money's worth) agreed, under the terms of the transfer to the first T, to be given in respect of the subject-matter of that transaction (including any consideration relating to an obligation of the transferor under the transfer to the first T). (3) The conditions mentioned in sub-paragraph (2) are as follows. - Condition A is that the pre-completion transaction referred to in paragraph 4(4) or 9(2) is one of a chain of successive transactions (all having at least part of their subject-matter in common) that are pre-completion transactions in relation to the original contract. - Condition B is that a person (“T”) is the transferor under a pre-completion transaction that forms part of that chain and T is connected with, or not acting at arm's length in relation to— 1. the transferee under that transaction, or 2. the transferee under a subsequent transaction in the chain. - Condition C is that having regard to all the circumstances it would not be reasonable to conclude that the obtaining of a tax advantage (for any person) was the main purpose, or one of main purposes, of T in entering into— 1. any pre-completion transaction in the chain, or 2. any arrangements of which such a transaction forms part. (4) Where conditions A to C are met, “the first T” means— (a) if condition B is met in relation to only one pre-completion transaction, T, or (b) if condition B is met in relation to more than one pre-completion transaction in the chain, the transferor in relation to the first of the pre-completion transactions in relation to which condition B is met. (5) In this paragraph “the transfer to the first T” means— (a) the pre-completion transaction under which the first T is the transferee, or (b) the original contract (if T is the original purchaser). (6) In this paragraph— (a) references to “the original contract” are to be read in accordance with paragraph 12(5) (and references to the original purchaser are to be read accordingly); (b) “tax advantage” has the same meaning as in paragraph 18. (14) (1) In paragraph 12 “the second minimum amount” means the total of the net amounts of consideration given by the relevant parties. (2) The net amount of consideration given by any relevant party is— $$CP − CR$where—CP is the total amount of consideration given by the party for the acquisition of the chargeable interest or as consideration for a pre-completion transaction;CR is the total of any amounts of consideration given to the party by another relevant party (or other relevant parties) as consideration for the acquisition of the chargeable interest or as consideration for a pre-completion transaction.If CR is greater than CP, the net amount of consideration given by the relevant party is taken to be zero.$ (3) Except where sub-paragraph (4) applies, the relevant parties for the purposes of this paragraph are— (a) the original purchaser, and (b) the transferee. (4) If the pre-completion transaction referred to in paragraph 4(4) or 9(2) (“the implemented transaction”) is one in a chain of successive transactions (having at least part of their subject-matter in common) that are pre-completion transactions in relation to the original contract, only the following are relevant parties— (a) the persons who are the transferor and transferee in relation to the implemented transaction; (b) a person who is the transferor in relation to preceding transaction, if that person is connected with, or not acting at arm's length in relation to, the transferee under the implemented transaction, (c) the transferee under a pre-completion transaction, if the transferor is a relevant party (whether by virtue of this paragraph (c) or otherwise). (5) For the purposes of sub-paragraph (2)— (a) amounts given by a person connected with a relevant party are treated as given by the relevant party; (b) amounts given to a person connected with a relevant party are treated as given to the relevant party. References in this paragraph to a person connected with a relevant party do not include a person who is a relevant party. (6) If the subject-matter of the implemented transaction is not the whole subject-matter of the original contract— (a) the amounts that are taken for the purposes of sub-paragraph (2) to be given “for the acquisition of the chargeable interest” are to be determined on a just and reasonable basis, and (b) only so much of the consideration for a preceding transaction as is referable, on a just and reasonable apportionment, to the subject-matter of the implemented transaction is taken into account under sub-paragraph (2). (7) In this paragraph— (a) references to “the original contract” are to be read in accordance with paragraph 12(5) (and references to “the original purchaser” are to be read accordingly); (b) “preceding transaction” means a pre-completion transaction that precedes the implemented transaction in a chain of successive pre-completion transactions (all having at least part of their subject-matter in common). (15) (1) This paragraph applies where— (a) a person would, in the absence of this paragraph, be liable to pay tax in respect of a notional land transaction deemed to take place under paragraph 5(1) or an additional land transaction deemed to take place under paragraph 5(2), and (b) the original contract had not been substantially performed when the assignment of rights mentioned in paragraph 4(1) was entered into. (2) If the purchaser claims relief under this paragraph in respect of the notional land transaction or additional land transaction, no liability to tax arises in respect of that transaction. (3) Sub-paragraph (2) does not apply if the land transaction mentioned in paragraph 4(4) is exempt from charge by virtue of any of sections 71A to 73 (which relate to alternative property finance). (4) Relief under this section must be claimed in a land transaction return or an amendment of such a return. (16) (1) This paragraph applies if— (a) the pre-completion transaction is a qualifying subsale, (b) the original purchaser would, in the absence of this paragraph, be liable to pay tax in respect of a land transaction effected by the completion of the original contract or deemed to be effected by the substantial performance of the original contract, (c) the performance of the qualifying subsale takes place at the same time as, and in connection with, the performance of the original contract, and (d) relief is claimed in respect of the land transaction mentioned in paragraph (b). (2) If the subject-matter of the qualifying subsale is the whole of the subject-matter of the original contract, no liability to tax arises in respect of the land transaction. (3) If the subject-matter of the qualifying subsale is part (but not the whole) of the subject-matter of the original contract, the amount of the consideration for the land transaction is taken to be— (a) the amount that it would be apart from this subsection, less (b) so much of that amount as is referable to the subject-matter of the qualifying subsale. (4) The amount mentioned in sub-paragraph (3)(a) may be reduced more than once under sub-paragraph (3) if there is more than one qualifying subsale. (5) Sub-paragraphs (2) to (4) do not apply if— (a) the original contract had been substantially performed when the qualifying subsale was entered into, or (b) the transaction effected, or deemed to be effected, by the performance of the qualifying subsale is exempt from charge by virtue of any of sections 71A to 73. (6) Relief under this section must be claimed in a land transaction return or an amendment of a land transaction return. (7) For the purposes of this paragraph a contract for a land transaction is taken to be “performed” when it is substantially performed or completed (whichever is earlier). (8) A pre-completion transaction is a “qualifying subsale” if it is a contract under which the original purchaser contracts to sell the whole or part of the subject-matter of the original contract to the transferee. (17) If a transaction is a qualifying subsale in relation to more than one contract such as is mentioned in paragraph 1(1)(a), paragraph 16 is to be applied separately in relation to each such original contract for the purpose of determining what relief, if any, may be available with respect to the land transaction in question. (18) (1) Relief may not be claimed— (a) under paragraph 15 if the assignment of rights referred to in sub-paragraph (1)(b) of that paragraph forms part of any tax avoidance arrangements, or (b) under paragraph 16 if the qualifying subsale referred to in sub-paragraph (1)(c) of that paragraph forms part of any tax avoidance arrangements. (2) Arrangements are “tax avoidance arrangements” if, having regard to all the circumstances, it would be reasonable to conclude that the obtaining of a tax advantage for the original purchaser or any other person was the main purpose, or one of the main purposes, of the original purchaser in entering into the arrangements. (3) In this paragraph “tax advantage” means— (a) a relief from tax or increased relief from tax, (b) a repayment of tax or increased repayment of tax, (c) the avoidance or reduction of a charge to tax, or (d) the avoidance of a possible assessment to tax. (4) In this paragraph “arrangements” includes any agreement, understanding, scheme, transaction or series of transactions (whether or not legally enforceable). (5) Nothing in paragraphs 12 to 14 (minimum consideration rule) or this paragraph affects the breadth of the application of sections 75A to 75C (anti-avoidance). (19) (1) The Treasury may by regulations amend this Schedule, or any provision of this Part of this Act relating to the making of returns, so as to— (a) exempt relevant purchasers of any specified description, or in specified circumstances, from the duty to deliver a land transaction return, (b) provide for relief under paragraph 15 or 16 to be available without a claim in the case of any specified class of transactions, or (c) provide that paragraph 5 does not apply in specified cases. (2) In this paragraph “relevant purchaser” means a person who is the transferor under a pre-completion transaction. (20) Section 1122 of CTA 2010 (connected persons) applies for the purposes of this Schedule. (21) (1) In this Schedule— - “assignment of rights” has the meaning given by paragraph 2(1); - “contract” includes any agreement; - “conveyance” includes any instrument; - “free-standing transfer” has the meaning given by paragraph 2(2); - “pre-completion transaction” (in relation to a contract such as is mentioned in paragraph 1(1)) has the meaning given by paragraph 1(2); - “qualifying subsale” has the meaning given by paragraph 16(8); - “the transferee”, in relation to a pre-completion transaction, has the meaning given by paragraph 1(2)(a); - “the transferor”, in relation to a pre-completion transaction, has the meaning given by paragraph 2(3). (2) In this Schedule— (a) references to “the original contract” are to be read in accordance with paragraph 1(1)(a); (b) references to “the original purchaser” are to be read in accordance with paragraph 1(1)(a) and see also sub-paragraph (3); (c) references to “part of the subject-matter of the original contract” are to be read in accordance with paragraph 1(7); (d) references to the “subject-matter” of a pre-completion transaction are to be read in accordance with paragraph 2(4); (e) references to substantial performance of the original contract “by the transferee” (in cases involving an assignment of rights) are to be read in accordance with paragraph 4(7). (3) For any one contract for the acquisition of a chargeable interest there is only one original purchaser (disregarding cases involving joint purchasers).

4

In section 57A (sale and leaseback arrangements), in subsection (3)(c)—

• (a) omit “section 45 (contract and conveyance: effect of transfer of rights) or”, and

• (b) after the second occurrence of “transfer of rights)” insert “ or a pre-completion transaction within the meaning of Schedule 2A (transactions entered into before completion of contract) ”.

5

In section 77 (notifiable transactions), in subsection (1)—

• (a) omit the “or” after paragraph (c), and

• (b) after paragraph (d) insert,

or (e) a notional or additional land transaction under paragraph 5 of Schedule 2A.

6

In section 79(2) (registration of land transactions etc)—

• (a) omit paragraph (a)(i) and the “or” after it, and

• (b) after paragraph (b) insert—

(ba) under paragraph 5 of Schedule 2A (transactions entered into before completion of contract),

.

7

In section 119 (meaning of “effective date” of a transaction), in subsection (2), at the appropriate place insert— “ paragraph 5 of Schedule 2A, ”.

8

In section 121 (index of defined expressions), in the entry for “vendor”, in the second column, for “sections 45(5A) and 45A(9)” substitute “ section 45A(9) and paragraphs 8, 10 and 11 of Schedule 2A ”.

9

In Schedule 6B (transfers involving multiple dwellings), in paragraph 7(6), in the definition of “relevant deeming provision”, after “45A” insert “ or paragraph 5(1) or (2) of Schedule 2A ”.

10

In paragraph 12B of Schedule 17A (assignment of agreement for lease), in sub-paragraph (1) for “section 45 (contract and conveyance: effect of transfer of rights)” substitute “ Schedule 2A (transactions entered into before completion of contract) ”.

11

The amendments made by this Schedule have effect in relation to transfers of rights (see section 45 of FA 2003) and pre-completion transactions (see paragraph 3) entered into on or after the day on which this Act is passed.

SCHEDULE 40

1

Part 4 of FA 2003 (stamp duty land tax) is amended as follows.

Amendments of FA 2003

2

• (1) Schedule 4A (higher rate for certain transactions) is amended as follows.

• (2) In paragraph 2(6) (treatment of certain transactions as two separate chargeable transactions) for “and 5” substitute “ , 5 to 5K and 6A to 6H ”.

• (3) For paragraph 5 (property developers) and the cross-heading preceding it substitute—

(5) (1) Paragraph 3 does not apply to a chargeable transaction so far as its subject-matter consists of a higher threshold interest that is acquired exclusively for one or more of the following purposes— (a) exploitation as a source of rents or other receipts (other than excluded rents) in the course of a qualifying property rental business; (b) development or redevelopment and resale in the course of a property development trade; (c) resale in the course of a property development trade (in a case where the chargeable transaction is part of a qualifying exchange); (d) resale (as stock of the business) in the course of a property trading business. (2) A chargeable interest does not count as being acquired exclusively for one or more of those purposes if it is intended that a non-qualifying individual will be permitted to occupy the dwelling. (3) In this paragraph— - “excluded rents” has the same meaning as in section 133 of the Finance Act 2013; - “property development trade” means a trade that— 1. consists of or includes buying and developing or redeveloping for resale residential or non-residential property, and 2. is run on a commercial basis and with a view to profit; - “part of a qualifying exchange” is to be construed in accordance with section 139(4) of the Finance Act 2013; - “property trading business” means a business that— 1. consists of or includes activities in the nature of a trade of buying and selling dwellings, and 2. is run on a commercial basis and with a view to profit; - “qualifying property rental business” has the same meaning as in section 133 of the Finance Act 2013.

• (4) After paragraph 5 insert—