Finance Act 2013

(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

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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—

(5A) (1) In paragraph 5 “non-qualifying individual”, in relation to a chargeable transaction, means any of the following— (a) the purchaser (other than a purchaser entering into the transaction as a member of a partnership); (b) a purchaser who enters into the transaction as a member of a partnership and has a major share in the partnership, (c) an individual (a “connected person”) who is connected with the purchaser; (d) a relevant settlor; (e) the spouse or civil partner of a connected person or of a relevant settlor; (f) a relative of a connected person or of a relevant settlor, or the spouse or civil partner of a relative of a connected person or of a relevant settlor; (g) a relative of the spouse or civil partner of a connected person or of a relevant settlor; (h) the spouse or civil partner of a person falling within paragraph (g); (i) an individual who is a major participant in a relevant collective investment scheme or is connected with a major participant in a relevant collective investment scheme. (2) A member of a partnership has a “major share” in the partnership if the member is entitled to a 50% or greater share— (a) in the income profits of the partnership, or (b) in the partnership's assets. (3) A collective investment scheme is a “relevant collective investment scheme” for the purposes of sub-paragraph (1)(i) if the purchaser under the chargeable transaction referred to in that sub-paragraph acquires the subject-matter of the transaction for the purposes of that scheme. (4) An individual who participates in a collective investment scheme is a “major participant” in the scheme if the individual— (a) is entitled to a share of at least 50% either of all the profits or income arising from the scheme or of any profits or income arising from the scheme that may be distributed to participants, or (b) would in the event of the winding up of the scheme be entitled to 50% or more of the assets of the scheme that would then be available for distribution among the participants. (5) The reference in sub-paragraph (4)(a) to profits or income arising from a collective investment scheme is to profits or income arising from the acquisition, holding, management or disposal of the property subject to the scheme. (6) In this paragraph— - “participant”, in relation to a collective investment scheme, is to be read in accordance with section 235 of the Financial Services and Markets Act 2000; - “relative” means brother, sister, ancestor or lineal descendant; - “relevant settlor”, in relation to a chargeable transaction, means an individual who is a settlor in relation to a relevant settlement (as defined in sub-paragraph (7)); - “settlement” has the same meaning as in Chapter 5 of Part 5 of ITTOIA 2005 (see section 620 of that Act). (7) Where a person, in the capacity of trustee of a settlement, is connected with a person who is the purchaser under a chargeable transaction, that settlement is a “relevant settlement” in relation to the chargeable transaction. (8) In sub-paragraph (7) “trustee” is to be read in accordance with section 1123(3) of CTA 2010 (“connected persons”: supplementary). (9) In this paragraph “the purchaser”, in relation to a chargeable transaction, is to be read as a reference to any of the purchasers (if there are more than one). (10) Section 1122 of the Corporation Tax Act 2010 (connected persons) has effect for the purposes of this paragraph, but for those purposes— (a) subsections (7) and (8) of that section (application of rules about connected persons to partnerships) are to be disregarded, and (b) subsections (2) to (7) of section 172 of the Finance Act 2013 apply as they apply for the purposes of Part 3 of that Act. (5B) (1) Paragraph 3 does not apply to a chargeable transaction so far as its subject-matter consists of a higher threshold interest in relation to which the conditions in sub-paragraph (2) are met. (2) The conditions are that— (a) the higher threshold interest is acquired with the intention that it will be exploited as a source of income in the course of a qualifying trade, and (b) reasonable commercial plans have been formulated to carry out that intention without delay (except so far as delay may be justified by commercial considerations or cannot be avoided). (3) “Qualifying trade”, in relation to a higher threshold interest, means a trade that— (a) is carried on on a commercial basis and with a view to profit, and (b) involves, in its normal course, offering the public the opportunity to make use of, stay in or otherwise enjoy the dwelling as customers of the trade on at least 28 days in any calendar year. (4) For the purposes of sub-paragraph (3), persons are not considered to have the opportunity to make use of, stay in or otherwise enjoy a dwelling unless the areas that they have the opportunity to make use of, stay in or otherwise enjoy include a significant part of the interior of the dwelling. (5) The size (relative to the size of the whole dwelling), nature and function of any relevant area or areas in a dwelling are taken into account in determining whether they form a significant part of the interior of the dwelling. (5C) (1) Sub-paragraph (2) applies to a chargeable transaction if the purchaser is a financial institution carrying on a business that involves the lending of money. (2) Paragraph 3 does not apply to the chargeable transaction so far as its subject-matter consists of a higher threshold interest that is acquired in the course of that business— (a) for the purpose of resale in the course of the business and, (b) in connection with those lending activities. (5D) (1) Paragraph 3 does not apply to a chargeable transaction so far as its subject-matter consists of a higher threshold interest in relation to which the conditions in sub-paragraph (2) are met. Those conditions can only be met if the purchaser, or a relevant group member, carries on or is to carry on a relievable trade. (2) The conditions are that— (a) the interest is acquired for the purpose of making the dwelling available to one or more qualifying employees or qualifying partners for use as living accommodation, and (b) the dwelling is to be made available as mentioned in paragraph (a) for purposes that are solely or mainly purposes of the relievable trade. (3) For the purposes of the relief under this paragraph it does not matter whether or not the individuals mentioned in sub-paragraph (2)(a) are identified at the time of the chargeable transaction. (4) “Relievable trade” means a trade that is carried on on a commercial basis and with a view to profit. (5) In this paragraph references to making a dwelling available to a qualifying employee or qualifying partner include making it available to persons who are to share the accommodation with a qualifying employee or qualifying partner as that individual's family. (6) Where the purchaser is a company, “relevant group member” means a company which is a member of the same group of companies as the purchaser for the purposes mentioned in paragraph 1(2) of Schedule 7 (group relief). (5E) (1) In a case where the person carrying on the relievable trade mentioned in paragraph 5D(1) carries it on in partnership with one or more other persons, “qualifying partner” means any individual who is a member of the partnership. (2) “Qualifying employee” means an individual employed for the purposes of the qualifying trade. (3) In a case falling within sub-paragraph (1), the condition in paragraph 5D(2)(a) is taken not to be met if the individuals, or a class of individuals, to whom it is proposed to make the dwelling available for use as living accommodation include, or are likely to include, a member of the partnership who is (or will at the relevant time be) entitled to a 10% or greater share— (a) in the income profits of the partnership, or (b) in any company beneficially entitled to the higher threshold interest mentioned in paragraph 5D(1), or (c) in that higher threshold interest. (4) In addition, the condition in paragraph 5D(2)(a) is taken not to be met if the individuals, or a class of individuals, to whom it is proposed to make the dwelling available for use as living accommodation include, or are likely to include, an individual employed for the purposes of the trade in question who is (or will at the relevant time be)— (a) entitled to a 10% or greater share— (i) in the income profits of the trade, or (ii) in any company that is beneficially entitled to the higher threshold interest, or (iii) in that higher threshold interest, or (b) employed to provide excluded domestic services. (5) The reference in sub-paragraph (4)(b) to an individual employed to provide excluded domestic services is to an individual the duties of whose employment include the provision of services in connection with the (actual or intended) occupation, by an individual to whom sub-paragraph (6) applies, of the dwelling mentioned in paragraph 5D(2)(a) (“the relevant dwelling”), or a linked dwelling. (6) This sub-paragraph applies to any individual who is connected with a person who is or is to be beneficially entitled to the higher threshold interest. (7) The following are “linked” dwellings for the purposes of sub-paragraph (5)— (a) if the conditions in section 116(2) of the Finance Act 2013 are met in relation to the relevant dwelling and another dwelling, that other dwelling; (b) a dwelling that is linked to the relevant dwelling, as described in section 117(1) of the Finance Act 2013. (8) For the purposes of sub-paragraphs (3)(c) and (4)(a) persons who are entitled to a chargeable interest as beneficial joint tenants (or, in Scotland, as joint owners) are taken to be entitled to the chargeable interest as beneficial tenants in common (or, in Scotland, as owners in common) in equal shares. (9) Section 147 of the Finance Act 2013 (meaning of “10% or greater share in a company”) applies for the purposes of this paragraph as for the purposes of section 146 of that Act. (10) In this paragraph references to employment include the holding of an office. (5F) (1) Paragraph 3 does not apply to a chargeable transaction so far as its subject-matter consists of a higher threshold interest in or over a dwelling— (a) that is, or is to be, a farmhouse, and (b) in relation to which the conditions in sub-paragraph (3) are met. (2) The reference in sub-paragraph (1) to a dwelling that “is or is to be a farmhouse” is to a dwelling that forms part of land that is to be occupied, or to continue to be occupied, for the purposes of a qualifying trade of farming. (3) The conditions are that— (a) the dwelling is to be occupied for the purposes of that trade by a qualifying farm worker, (b) reasonable commercial plans have been formulated under which such occupation is either to continue from the effective date of the chargeable transaction or to begin without delay (except so far as delay may be justified by commercial considerations or cannot be avoided), and (c) occupation of the farmhouse by a qualifying farm worker is then expected to continue as part of the normal way in which the trade is, or is to be, carried on. (4) In sub-paragraph (3) “qualifying farm worker” means an individual who occupies the dwelling for the purposes of the trade mentioned in that sub-paragraph and has a substantial involvement— (a) in the day-to-day work of the trade, or (b) in the direction and control of the conduct of the trade. (5) “Qualifying trade of farming” means a trade of farming that is carried on— (a) on a commercial basis, and (b) with a view to profit. (6) A person occupying part of a dwelling is regarded as occupying the dwelling for the purposes of this paragraph. (7) In this paragraph— (a) “farming” has the same meaning as in the Corporation Tax Acts (see section 1125 of CTA 2010), except that in this paragraph “farming” includes market gardening; (b) “market gardening” has the same meaning as in the Corporation Tax Acts (see section 1125(5) of CTA 2010). (5G) (1) Sub-paragraph (2) applies where relief under paragraph 5 has been allowed in respect of a higher threshold interest forming the whole or part of the subject-matter of a chargeable transaction. (2) The relief is withdrawn if at any time in the period of three years beginning with the effective date of the chargeable transaction (“the control period”) a requirement in sub-paragraph (3) is not met. (3) The requirements are that— (a) the higher threshold interest (if still held by the purchaser) is held exclusively for one or more of the purposes mentioned in paragraph 5(1), (b) any chargeable interest derived from the higher threshold interest that may be held by the purchaser is held exclusively for one or more of those purposes, and (c) (if the higher threshold interest or a chargeable interest derived from it is held by the purchaser) no non-qualifying individual is permitted to occupy the dwelling. (4) The requirements in sub-paragraph (3)(a) and (b) do not apply in relation to times when, because of a change of circumstances that is unforeseen and beyond the purchaser's control, it is not reasonable to expect the purposes for which the higher threshold interest was acquired to be carried out. (5) Sub-paragraph (6) applies if a higher threshold interest was acquired for a purpose mentioned in paragraph 5(1) but at some time in the control period the activity in question (for instance, exploitation of the interest as mentioned in paragraph 5(1)(a))— (a) has not yet begun, or (b) has ceased. (6) For the purposes of sub-paragraph (3), the interest is taken to be held for the purpose in question only if reasonable steps are being taken to ensure that the purpose in question is carried out. (7) In this paragraph “non-qualifying individual” (in relation to the chargeable transaction mentioned in sub-paragraph (1)) has the meaning given by paragraph 5A. (5H) (1) This paragraph applies where relief under paragraph 5B (trades involving making a dwelling open to the public) has been allowed in respect of a higher threshold interest forming the whole or part of the subject-matter of a chargeable transaction. (2) The relief is withdrawn if at any time in the period of three years beginning with the effective date of the chargeable transaction (“the control period”) a requirement in sub-paragraph (3) is not met. (3) The requirements are that— (a) the higher threshold interest (if still held by the purchaser), is being exploited as a source of income in the course of a qualifying trade, and (b) any chargeable interest derived from that interest that may be held by the purchaser is being exploited as mentioned in paragraph (a). (4) The requirements in sub-paragraph (3) do not apply in relation to times when, because of a change of circumstances that is unforeseen and beyond the purchaser's control, it is not reasonable to expect the chargeable interest concerned to be exploited in the manner specified. (5) Sub-paragraph (6) applies if at some time in the control period the higher threshold interest, or a chargeable interest derived from it— (a) has not begun to be exploited as mentioned in sub-paragraph (3), or (b) has ceased to be so exploited. (6) The requirements in sub-paragraph (3) are treated as being met if reasonable steps are being taken to ensure that the chargeable interest in question begins to be exploited as mentioned in that sub-paragraph, or that such exploitation of the interest is resumed. (5I) (1) This paragraph applies where relief under paragraph 5C (financial institutions acquiring dwellings in the course of lending) has been allowed in respect of a higher threshold interest forming the whole or part of the subject-matter of a chargeable transaction. (2) The relief is withdrawn if any requirement in sub-paragraph (3) is not met at any time in the period of three years beginning with the effective date of the chargeable transaction (“the control period”) (but see sub-paragraphs (4) and (5)). (3) The requirements are that— (a) the purchaser continues to be a financial institution carrying on a business that involves the lending of money, and (b) the interest is held for the purpose of resale in the course of the business. (4) The requirements in sub-paragraph (3) apply only to times in the control period when the purchaser holds— (a) the higher threshold interest, or (b) a chargeable interest that is derived from the higher threshold interest. (5) The requirements in sub-paragraph (3) do not apply in relation to times when, because of a change of circumstances that is unforeseen and beyond the purchaser's control, it is not reasonable to expect those requirements to be met. (5J) (1) This paragraph applies where relief under paragraph 5D (dwellings for occupation by certain employees etc) has been allowed in respect of a higher threshold interest forming the whole or part of the subject-matter of a chargeable transaction. (2) The relief is withdrawn if any requirement in sub-paragraph (3) is not met at any time in the period of three years beginning with the effective date of the chargeable transaction (“the control period”) (but see sub-paragraphs (4) and (5)). (3) The requirements are that— (a) the purchaser, or a relevant group member (as defined in paragraph 5D(6)), carries on a trade on a commercial basis and with a view to profit, (b) the dwelling is made available as mentioned in paragraph 5D(2)(a), and (c) the dwelling is made so available for purposes that are solely or mainly purposes of the trade mentioned in paragraph (a) of this sub-paragraph. (4) The requirements in sub-paragraph (3) apply only to times in the control period when the purchaser holds— (a) the higher threshold interest, or (b) a chargeable interest that is derived from the higher threshold interest. (5) The requirements in sub-paragraph (3) do not apply in relation to times when, because of a change of circumstances that is unforeseen and beyond the purchaser's control, it is not reasonable to expect those requirements to be met. (6) Sub-paragraph (7) applies if at some time in the control period the dwelling— (a) has not begun to be made available as mentioned in sub-paragraph (3)(b) and (c), or (b) has ceased to be so made available. (7) The requirements in paragraphs (b) and (c) of sub-paragraph (3) are treated as being met if reasonable steps are being taken to ensure that the dwelling will begin to be, or will return to being, available as mentioned in those paragraphs. (5K) (1) This paragraph applies where relief under paragraph 5F (farmhouses) has been allowed in respect of a higher threshold interest forming the whole or part of the subject-matter of a chargeable transaction. (2) The relief is withdrawn if at any time in the period of three years beginning with the effective date of the chargeable transaction (“the control period”) the requirements in sub-paragraph (3) are not met (but see sub-paragraphs (4) and (5)). (3) The requirements are that— (a) the land mentioned in paragraph 5F(2) is occupied for the purposes of a qualifying trade of farming, and (b) the dwelling is occupied for the purposes of that trade by a qualifying farm worker. (4) The requirements in sub-paragraph (3) apply only to times in the control period when the purchaser holds— (a) the higher threshold interest, or (b) a chargeable interest that is derived from the higher threshold interest. (5) The requirements in sub-paragraph (3) do not apply in relation to times when, because of a change of circumstances that is unforeseen and beyond the purchaser's control, it is not reasonable to expect those requirements to be met. (6) Sub-paragraph (7) applies if at some time in the control period a requirement in sub-paragraph (3)— (a) has not begun to be met, or (b) has ceased to be met. (7) The requirement is treated as being met if reasonable steps are being taken to ensure that the requirement begins to be met, or is again met.

• (5) After paragraph 6 insert—