Legalize / United Kingdom / Public General Act

Finance Act 2013

Type Public General Act

Publication 2013-07-17

Last updated 2025-12-16

State In force

Department Statute Law Database

Source legislation.gov.uk

articles Not indexed

Reform history JSON API

(c) any company that has at any time been associated with a company that was carrying on a ring fence trade at that time, and

(d) in the case of decommissioning expenditure incurred in connection with any plant or machinery, or any land, situated in the UK sector of a cross-boundary field, any company that is a party to a joint operating agreement or unitisation agreement in relation to that field.

(4) For the purposes of subsection (2)(b) the amount of tax relief in respect of any decommissioning expenditure is to be determined in accordance with the agreement; and in making such a determination tax relief in respect of expenditure incurred by the qualifying company that is not decommissioning expenditure may, in such circumstances as are specified in the agreement, be treated as if it were tax relief in respect of decommissioning expenditure.

(5) A payment made to a company under a decommissioning relief agreement is not to be regarded as income or a gain of the company for any purpose of the Tax Acts.

(6) Section 18(1) of CRCA 2005 (restriction on disclosure by Revenue and Customs officials) does not prevent—

(a) disclosure to a Minister of the Crown for the purpose of enabling the Minister of the Crown to determine the extent of any liability under a decommissioning relief agreement, or

(b) disclosure to a company that has rights under a decommissioning relief agreement for the purpose of enabling the company to determine the reference amount.

(7) In this section—

“company” has the meaning given by section 1121 of CTA 2010,

“cross-boundary field” has the meaning given by section 10(9) of the Petroleum Act 1998,

“decommissioning expenditure” has the meaning given by section 81,

“Minister of the Crown” includes the Treasury,

“ring fence trade” has the same meaning as in Part 8 of CTA 2010 (see section 277 of that Act),

“the UK sector of a cross-boundary field” means that part of a cross-boundary field lying within the UK marine area (as defined by section 42 of the Marine and Coastal Access Act 2009), and

“unitisation agreement” has the meaning given by paragraph 1(2) of Schedule 17 to FA 1980.

(8) Subsections (8) to (9) of section 30 of the Petroleum Act 1998 (which specifies when one body corporate is associated with another) apply for the purposes of this section as they apply for the purposes of that section.

Meaning of “decommissioning expenditure”

81

(1) In section 80 “decommissioning expenditure” means expenditure incurred in connection with—

(a) demolishing any plant or machinery,

(b) preserving any plant or machinery pending its reuse or demolition,

(d) arranging for the reuse of any plant or machinery, or

(e) the restoration of any land.

(2) It is immaterial for the purposes of subsection (1)(b) whether the plant or machinery is reused, is demolished or is partly reused and partly demolished.

(3) It is immaterial for the purposes of subsection (1)(c) and (d) whether the plant or machinery is in fact reused.

(4) In subsection (1)(e) “restoration” includes landscaping.

(5) The Treasury may by order amend this section.

(6) An order under subsection (5) may include transitional provision and savings.

(7) The power to make an order under subsection (5) is exercisable by statutory instrument.

(8) A statutory instrument containing an order under subsection (5) is subject to annulment in pursuance of a resolution of the House of Commons.

Annual report

82

(1) For each financial year the Treasury must prepare a report containing the information in subsection (2).

(2) The information is—

(a) the number of decommissioning relief agreements entered into in that year,

(b) the total number of decommissioning relief agreements in force at the end of that year,

(c) the number of payments made under any decommissioning relief agreements during that year, and the amount of each payment,

(d) the total number of payments that have been made under any decommissioning relief agreements as at the end of that year, and the total amount of those payments, and

(e) an estimate of the maximum amount liable to be paid under any decommissioning relief agreements.

(3) The report for a financial year must be laid before the House of Commons as soon as is reasonably practicable after the end of that year.

(4) In this section “decommissioning relief agreement” has the same meaning as in section 80.

(5) This section has effect in relation to financial years ending on or after 31 March 2014.

Effect of claim on PRT

83

(1) This section applies where a sum is payable to a company (“the claimant”) under a decommissioning relief agreement.

(2) Subsection (3) applies where the reference amount is calculated by reference to what the claimant's assessable profit in any chargeable period would be if any expenditure incurred by it were used to reduce its profit in a particular way (rather than in any way that it has in fact been used).

(3) For the purposes of petroleum revenue tax—

(a) the expenditure is treated as having been used to reduce the claimant's profit in that way (rather than in any way that it has in fact been used), and

(b) the claimant is treated as if it had received the tax relief it would receive if its profit were reduced in that way (so no repayment of tax is to be made by virtue of this subsection).

(4) Subsection (5) applies where the reference amount is calculated by reference to what any other company's assessable profit in any chargeable period would be if any expenditure incurred by the claimant—

(a) had been incurred by the other company, and

(b) were used to reduce the other company's profit in a particular way.

(5) For the purposes of petroleum revenue tax—

(a) the expenditure is treated as incurred by the other company (and not the claimant),

(b) the expenditure is treated as having been used by the other company to reduce its profit in that way, and

(c) the other company is treated as if it had received the tax relief it would receive if its profit were reduced in that way (so no repayment of tax is to be made by virtue of this subsection).

(6) In this section—

“assessable profit” and “chargeable period” have the same meaning as in Part 1 of OTA 1975,

“company” has the meaning given by section 1121 of CTA 2010,

“decommissioning relief agreement” has the same meaning as in section 80, and

“the reference amount” means the reference amount (within the meaning of that section) that relates to the sum mentioned in subsection (1).

Terminal losses accruing by virtue of another’s default

84

(1) This section applies where—

(a) a company defaults on a liability under—

(i) a relevant agreement, or

(ii) an abandonment programme,

to make a payment towards decommissioning expenditure in respect of an oil field,

(b) in consequence of the default, another company (“the other company”) that has rights under a decommissioning relief agreement at the time of the default incurs decommissioning expenditure in respect of that oil field, and

(c) but for paragraph 15 of Schedule 17 to FA 1980 (terminal losses), a sum (or a sum of a greater amount) would be payable to the other company under the decommissioning relief agreement.

(2) Paragraph 15 of Schedule 17 to FA 1980 does not apply in relation to any allowable loss accruing to the other company from that oil field.

(3) Any allowable unrelievable field loss (within the meaning of section 6 of OTA 1975) that—

(a) consists of the unrelieved portion of an allowable loss within subsection (2), and

(b) would (in the absence of this subsection) arise as a result of subsection (2),

is not to be regarded as arising.

(4) Nothing in this section affects the operation of section 83(3) or (5).

(5) In this section—

“abandonment programme” means an abandonment programme approved under Part 4 of the Petroleum Act 1998 (including such a programme as revised),

“company” has the meaning given by section 1121 of CTA 2010,

“decommissioning expenditure” has the same meaning as in section 80,

“decommissioning relief agreement” has the same meaning as in that section,

“oil field” has the same meaning as in OTA 1975,

“relevant agreement” has the meaning given by section 104(5)(a) of FA 1991, and

“unrelieved portion”, in relation to an allowable loss, is to be read in accordance with section 6 of OTA 1975.

Claims under agreement not to affect oil allowance

85

(1) This section applies where—

(a) a company defaults on a liability under—

(i) a relevant agreement, or

(ii) an abandonment programme,

to make a payment towards decommissioning expenditure in respect of an oil field,

(b) in consequence of the default, another company that has rights under a decommissioning relief agreement at the time of the default incurs decommissioning expenditure in respect of that oil field, and

(c) by virtue of section 83, any expenditure incurred by that company (whether or not that decommissioning expenditure) is treated as having been used by that company or any other company (“the affected company”) to reduce its assessable profit in a chargeable period in a particular way.

(2) If, in the absence of section 83, the assessable profit accruing to the affected company from an oil field in that chargeable period would be reduced under section 8(1) of OTA 1975, the amount of the oil allowance for the oil field utilised by the affected company in that chargeable period for the purposes of section 8 of that Act is to be determined as if section 83 did not apply.

(3) In this section—

“abandonment programme” means an abandonment programme approved under Part 4 of the Petroleum Act 1998 (including such a programme as revised),

“company” has the meaning given by section 1121 of CTA 2010,

“decommissioning expenditure” has the same meaning as in section 80,

“decommissioning relief agreement” has the same meaning as in that section,

“oil field” has the same meaning as in OTA 1975, and

“relevant agreement” has the meaning given by section 104(5)(a) of FA 1991.

Decommissioning security settlements

Removal of IHT charges in respect of decommissioning security settlements

86

(1) In Chapter 3 of Part 3 of IHTA 1984 (settled property: settlements without interests in possession etc), section 58 (relevant property) is amended as follows.

(2) In subsection (1), omit the “and” at the end of paragraph (ea) and before paragraph (f) insert—

(eb) property comprised in a decommissioning security settlement; and

(3) At the end insert—

(6) For the purposes of subsection (1)(eb) above a settlement is a “decommissioning security settlement” if the sole or main purpose of the settlement is to provide security for the performance of obligations under an abandonment programme. (7) In subsection (6)— - “abandonment programme” means an abandonment programme approved under Part 4 of the Petroleum Act 1998 (including such a programme as revised); - “security” has the same meaning as in section 38A of that Act.

(4) This section is treated as having come into force on 20 March 1993.

(5) For the purposes of section 58 of IHTA 1984—

(a) any reference in that section to Part 4 of the Petroleum Act 1998 has effect, in relation to any period before the coming into force of that Part, as a reference to Part 1 of the Petroleum Act 1987, and

(b) section 38A of the Petroleum Act 1998 is to be treated as having come into force at the same time as this section.

(6) There is to be no charge to tax under section 65 of IHTA 1984 if the only reason for such a charge would be that property ceases to be relevant property by virtue of the coming into force of this section.

Loan relationships arising from decommissioning security settlements

87

(1) In Part 8 of CTA 2010 (oil activities), after section 287 insert—

(287A) (1) No debits or credits are to be brought into account for the purposes of Part 5 of CTA 2009 (loan relationships) in respect of a company's loan relationship so far as the loan relationship is in respect of property comprised in a decommissioning security settlement. (2) For the purposes of this section a settlement is a “decommissioning security settlement” if the sole or main purpose of the settlement is to provide security for the performance of obligations under an abandonment programme. (3) In subsection (2)— - “abandonment programme” means an abandonment programme approved under Part 4 of the Petroleum Act 1998 (including such a programme as revised), and - “security” has the same meaning as in section 38A of that Act.

(2) In section 464 of CTA 2009 (priority of Part 5 for corporation tax purposes), in subsection (3)(e), for “and 287” substitute “ to 287A ”.

(3) The amendments made by this section have effect in relation to accounting periods beginning on or after the day on which this Act is passed.

Decommissioning expenditure etc

Decommissioning expenditure taken into account for PRT purposes

88

(1) Section 330B of CTA 2010 (decommissioning expenditure taken into account for PRT purposes) is amended as follows.

(2) In subsection (1), omit the “and” at the end of paragraph (a) and after paragraph (b) insert

, and (c) an amount equal to the appropriate fraction of the used-up amount of that expenditure is added under section 330A(2) in calculating the participator's adjusted ring fence profits for an accounting period.

(3) For subsection (2) substitute—

(2) In calculating for the purposes of section 330(1) the amount of the participator's adjusted ring fence profits for the accounting period, there is to be deducted the amount given by— $$RP × AF × D$where—RP is the relevant percentage of the decommissioning expenditure,AF is the appropriate fraction, andD is the PRT difference.$

(4) In subsection (3)—

(a) before the definition of “the appropriate fraction” insert—

“the relevant percentage of the decommissioning expenditure” is the percentage of that expenditure that is the used-up amount referred to in subsection (1)(c),

;

(b) in the definition of “the appropriate fraction”, omit “relevant”;

(5) In subsection (4), for “subsection (1)” substitute “ subsection (1)(a) ”.

(6) In subsection (7)—

(a) omit the definition of “the relevant accounting period”, and

(b) at the end insert—

“the used-up amount”, in relation to any expenditure, has the same meaning as in section 330A (see subsection (3) of that section).

(7) The amendments made by this section have effect in relation to expenditure incurred in connection with decommissioning carried out on or after the day on which this Act is passed.

Miscellaneous amendments relating to decommissioning

89

(1) Part 1 of Schedule 31 contains provision about expenditure on and under abandonment guarantees and abandonment expenditure.

(2) Part 2 of Schedule 31 contains provision about calculating the profits of a ring fence trade carried on by a person who incurs expenditure on meeting another person's decommissioning liabilities.

Capital allowances

Expenditure on decommissioning onshore installations

90

(1) Section 163 of CAA 2001 (meaning of “general decommissioning expenditure”) is amended as follows.

(2) In subsection (1)—

(a) the words after “if” become paragraph (a) of that subsection,

(b) in that paragraph, for “subsections (3) to (4)” substitute “ subsections (3), (3A) and (4) ”, and

, or (b) the conditions in subsections (3B) and (4) are met.

(3) After subsection (3A) insert—

(3B) The expenditure must have been incurred on decommissioning plant or machinery— (a) which has been brought into use wholly or partly for the purposes of a ring fence trade, and (b) which— (i) is, or forms part of, a relevant onshore installation, or (ii) when last in use for the purposes of a ring fence trade, was, or formed part of, such an installation. (3C) In subsection (3B) “relevant onshore installation” means any building or structure which— (a) falls within any of sub-paragraphs (ii) to (iv) of section 3(4)(c) of OTA 1975, (b) is not an offshore installation, and (c) is or has been used for purposes connected with the winning of oil from an oil field any part of which lies within— (i) the boundaries of the territorial sea of the United Kingdom, or (ii) an area designated under section 1(7) of the Continental Shelf Act 1964.

(4) In subsection (5)(a), for “ “oil field” has” substitute “ “oil” and “oil field” have”.

(5) The amendments made by this section have effect in relation to expenditure incurred on decommissioning carried out on or after the day on which this Act is passed.

Expenditure on decommissioning certain redundant plant or machinery

91

(1) In section 164 of CAA 2001 (general decommissioning expenditure incurred before cessation of ring fence trade), after subsection (1B) insert—

(1C) If the plant or machinery concerned is incidentally-acquired redundant plant or machinery (see subsection (1D)), it is to be regarded for the purposes of this section as having been brought into use for the purposes of the ring fence trade. (1D) Plant or machinery is “incidentally-acquired redundant plant or machinery” if— (a) it has not been brought into use for the purposes of the ring fence trade, (b) it forms part of a relevant installation (see subsection (1E)) which has been brought into use for the purposes of the ring fence trade, (c) at the time R acquired an interest in the relevant installation, the plant or machinery was not being used for any purposes, and (d) the acquisition of the interest in the plant or machinery was merely incidental to the acquisition of the interest in the relevant installation. (1E) For the purposes of subsection (1D)— - “relevant installation” means— 1. an offshore installation, 2. a submarine pipeline, or 3. a relevant onshore installation; - “offshore installation” and “submarine pipeline” have the same meaning as in Part 4 of the Petroleum Act 1998; - “relevant onshore installation” has the meaning given by section 163(3C).

(2) The amendment made by this section has effect in relation to expenditure incurred on decommissioning carried out on or after the day on which this Act is passed.

Expenditure on site restoration

92

(1) Part 5 of CAA 2001 (mineral extraction allowances) is amended as follows.

(2) In section 395 (qualifying expenditure), in subsection (1)(d), omit “post-trading”.

(3) In section 403 (qualifying expenditure on acquiring a mineral asset), after subsection (2) insert—

(2A) For the purposes of this section the reference to expenditure on acquiring a mineral asset does not include expenditure incurred on the restoration of a relevant site (within the meaning of section 416 or 416ZA).

(4) In section 416 (expenditure on restoration within 3 years of ceasing to trade)—

(a) in subsections (1)(a) and (6)(a), before “mineral extraction trade” insert “ relevant ”;

(b) in subsection (5), at the end insert—

But it does not include decommissioning any plant or machinery (within the meaning of section 163).

;

(7A) Relevant mineral extraction trade” means a mineral extraction trade that is not a ring fence trade within the meaning of Part 8 of CTA 2010 (see section 277 of that Act).

;

(d) the heading of section 416 becomes “ Non-ring fence trades: expenditure on restoration within 3 years of ceasing to trade ”.

(5) In Chapter 5, after section 416 insert—

(416ZA) (1) If— (a) a person who is carrying on, or has ceased to carry on, a ring fence trade incurs expenditure on the restoration of a relevant site, (b) that part of the restoration work to which the expenditure relates has been carried out, and (c) the expenditure has not been deducted in calculating for tax purposes the profits of any trade carried on by the person, the net cost of the restoration is qualifying expenditure for the relevant period in which that part of the work to which the expenditure relates was carried out. (2) “Relevant period” means— (a) in the case of restoration work carried out while the person is carrying on the trade, a chargeable period, and (b) in the case of restoration work carried out after the person has ceased to carry on the trade, a notional accounting period. For the meaning of “notional accounting period”, see section 416ZB. (3) The qualifying expenditure for a notional accounting period is treated as incurred on the last day of trading. (4) If the amount of expenditure incurred on any part of the restoration work carried out in a relevant period is disproportionate to that part of the restoration work, only so much of the net cost of the restoration as is proportionate to that part of the restoration work (the “allowable expenditure for the period”) is to be treated as qualifying expenditure for that period. (5) But subsection (4) does not prevent that part of the expenditure that is not allowable expenditure for the period from being treated as qualifying expenditure for a subsequent relevant period. (6) If any expenditure incurred by a person is qualifying expenditure under this section— (a) the whole of the expenditure on the restoration (not just the net cost) is not deductible in calculating the person's income for any tax purposes, and (b) none of the amounts subtracted to produce the net cost is to be treated as the person's income for any tax purposes. (7) “Restoration” includes— (a) landscaping, (b) in relation to land in the United Kingdom, the carrying out of any works required as a condition of granting planning permission for development relating to the winning of oil from an oil field, (c) in relation to land in the UK marine area, the carrying out of any works required in order to comply with— (i) an approved abandonment programme, (ii) a condition to which the approval of an abandonment programme is subject, or (iii) a requirement imposed by the Secretary of State, or an agreement made with the Secretary of State, in relation to a relevant site, and (d) in relation to land in a foreign sector of the continental shelf, the carrying out of any works required in order to comply with anything corresponding to a matter within paragraph (c)(i), (ii) or (iii) under the law of a territory outside the United Kingdom. But it does not include decommissioning any plant or machinery (within the meaning of section 163). (8) A “relevant site” means— (a) the site of a source to the working of which the ring fence trade relates (or related), or (b) land used in connection with working such a source. (9) “The net cost of the restoration” means the expenditure incurred on the restoration less any amounts that— (a) are received, or are to be received, by the person, and (b) are attributable to the restoration of the relevant site. (10) All such adjustments are to be made, by way of discharge or repayment of tax or otherwise, as are necessary to give effect to this section. (11) In this section— - “abandonment programme”, “approval” and “approved” (in relation to an abandonment programme) have the same meaning as in Part 4 of the Petroleum Act 1998, - “foreign sector of the continental shelf” means an area within which rights are exercisable with respect to the sea bed and subsoil and their natural resources by a territory outside the United Kingdom, - “oil” and “oil field” have the same meaning as in Part 1 of OTA 1975, - “ring fence trade” has the same meaning as in Part 8 of CTA 2010 (see section 277 of that Act), and - “UK marine area” has the meaning given by section 42 of the Marine and Coastal Access Act 2009. (416ZB) (1) For the purposes of section 416ZA “notional accounting period”, in relation to a person (“the former trader”) who has ceased to carry on a ring fence trade, means each of the following periods— (a) the period that— (i) begins with the day following the last day on which the former trader carried on the ring fence trade, and (ii) ends with the day on which the first termination event subsequently occurs, and (b) each period that— (i) begins with the day following the last day of a period determined under paragraph (a) or this paragraph, and (ii) ends with the day on which the first termination event subsequently occurs. (2) But there are to be no notional accounting periods after the end of the post-cessation period (see subsection (4)). (3) “Termination event”, in relation to a notional accounting period, means each of the following— (a) the end of the period of 12 months beginning with the first day of the notional accounting period, (b) the occurrence of an accounting date of the former trader or, if there is a period for which the former trader does not make up accounts, the end of that period (but see subsections (6) and (7)), and (c) the end of the post-cessation period. (4) “The post-cessation period” means the period that— (a) begins with the day following the last day on which the former trader carried on the ring fence trade, and (b) ends with the day on which the appropriate authority is satisfied that the restoration of the relevant site has been completed. (5) In subsection (4) “the appropriate authority” means— (a) in the case of restoration falling within section 416ZA(7)(c), the Secretary of State, and (b) in any other case, such person or body as the Commissioners for Her Majesty's Revenue and Customs may specify. (6) If the former trader— (a) carries on more than one trade, (b) makes up accounts of any of them to different dates, and (c) does not make up general accounts for the whole of the former trader's activities, subsection (3)(b) applies with reference to the accounting date of such one of the trades as the former trader may determine. (7) If the Commissioners for Her Majesty's Revenue and Customs are of the opinion, on reasonable grounds, that a date determined by the former trader for the purposes of subsection (6) is inappropriate, the Commissioners may by notice direct that the accounting date of such other of the trades referred to in that subsection as appears to the Commissioners to be appropriate is to be used instead. (8) Expressions used in this section and in section 416ZA have the same meaning in this section as they do in that section.

(6) In section 416B (first-year qualifying expenditure), in subsection (2), at the end insert “ (within the meaning of section 403) ”.

(7) Part 4 of CTA 2010 (loss relief) is amended as follows.

(8) In section 40 (ring fence trades: extension of periods for which relief may be given), in subsection (1)(b), for “403” substitute “ by virtue of section 416ZA ”.

(9) In section 43 (claim period in case of ring fence or mineral extraction trades), in subsection (1)(b)—

(a) after “416” insert “ or 416ZA ”, and

(b) for the words from “restoration” to “trade” substitute “ site restoration ”.

(10) The amendments made by this section have effect in relation to expenditure incurred on restoration carried out on or after the day on which this Act is passed.

93

Schedule 32 contains provision in connection with restrictions on allowances for certain oil-related expenditure.

PART 3 — Annual tax on enveloped dwellings

The charge to tax

Charge to tax

94

(1) A tax (called “annual tax on enveloped dwellings”) is to be charged in accordance with this Part.

(2) Tax is charged in respect of a chargeable interest if on one or more days in a chargeable period—

(a) the interest is a single-dwelling interest and has a taxable value of more than £500,000, and

(b) a company, partnership or collective investment scheme meets the ownership condition with respect to the interest.

(3) The tax is charged for the chargeable period concerned.

(4) A company meets the ownership condition with respect to a single-dwelling interest on any day on which the company is entitled to the interest (otherwise than as a member of a partnership or for the purposes of a collective investment scheme).

(5) A partnership meets the ownership condition with respect to a single-dwelling interest on any day on which a member of the partnership that is a company is entitled to the interest (as a member of the partnership).

(6) A collective investment scheme meets the ownership condition with respect to a single-dwelling interest on any day on which the interest is held for the purposes of the scheme.

(7) If a company is jointly entitled to a chargeable interest (as a member of a partnership or otherwise), then regardless of whether the company is entitled as a joint tenant or tenant in common (or, in Scotland, as a joint owner or owner in common) the ownership condition is regarded as met in relation to the whole chargeable interest.

(8) The chargeable periods are—

(a) the period beginning with 1 April 2013 and ending with 31 March 2014, and

(b) each subsequent period of 12 months beginning with 1 April.

(9) See also section 95.

Entitlement to interests

95

(1) In this Part “entitled” means beneficially entitled—

(a) whether solely or jointly with another person, and

(b) whether as a member of a partnership or otherwise.

This is subject to subsection (2).

(2) References in this Part to entitlement to a single-dwelling interest (or any other chargeable interest) do not include—

(a) entitlement in the capacity of a trustee or personal representative, or

(b) entitlement as a beneficiary under a settlement.

(3) Subsection (1)(b) does not apply where the contrary is specified.

(4) In this section “settlement” has the same meaning as in Part 4 of FA 2003 (see paragraph 1 of Schedule 16 to that Act).

Person liable

96

(1) The chargeable person is liable to pay tax charged under this Part.

(2) “The chargeable person” means—

(a) in relation to tax charged by virtue of section 94(4), the company;

(b) in relation to tax charged by virtue of section 94(5), the responsible partners.

(3) In relation to tax charged by virtue of section 94(6) “the chargeable person” means—

(a) if the collective investment scheme is a unit trust scheme, the trustee of the scheme;

(b) if the collective investment scheme is an open-ended investment company, the body corporate referred to in section 236(2) of the Financial Services and Markets Act 2000;

(c) in relation to an EEA UCITS which is not an open-ended investment company or unit trust scheme, the management company for that UCITS;

(d) in any other case, the person who has day-to-day control over the management of the property subject to the scheme.

(4) The liability of the responsible partners to pay tax charged on them under this Part is joint and several.

(5) References in this section to “the responsible partners” are to all the persons who are members of the partnership concerned on the first day in the chargeable period on which the partnership meets the ownership condition with respect to the single-dwelling interest.

(6) Tax charged under this Part is said to be “charged on” the chargeable person (and that person is said to be “chargeable to” the tax).

Liability of persons jointly entitled

97

(1) Subsection (2) applies if—

(a) a company is within the charge for a chargeable period with respect to a single-dwelling interest by virtue of section 96(2)(a), and

(b) one or more other persons are jointly entitled to the interest on the first day in that period on which the company is within the charge with respect to it.

(2) The company and the other person or persons are jointly and severally liable for the tax charged for that period with respect to the interest (whether or not those other persons are also within the charge with respect to the interest on the day in question).

(3) Subsection (4) applies if—

(a) a company that is a member of a partnership is entitled (as a member of the partnership) to a single-dwelling interest on a day in a chargeable period, and

(b) as a result, the responsible partners are within the charge with respect to the interest for the period.

(4) If, on the first day in the chargeable period on which the responsible partners are within the charge a person (“P”) who is not one of the responsible partners is jointly entitled to the chargeable interest, P and the responsible partners are jointly and severally liable for the tax charged for the period with respect to the interest (whether or not P is also within the charge with respect to the interest on the day in question).

Collective investment schemes: liability for and collection of tax

98

(1) Subsection (2) applies where tax is charged for a chargeable period with respect to a single-dwelling interest by virtue of section 94(6).

(2) The persons who are major participants in the scheme on the first day of the chargeable period on which the chargeable person is within the charge with respect to the interest are jointly and severally liable with the chargeable person for the tax charged.

(3) Subsection (2) does not permit the recovery from a major participant of an amount exceeding the market value of the participant's holding in the scheme.

(4) The reference in subsection (3) to a participant's holding in a collective investment scheme is to the interests or rights by virtue of which the participant takes part in the scheme.

(5) Tax chargeable by virtue of section 94(6) may be recovered from the depositary (if any) of a collective investment scheme, but only up to the amount or value of any money or other property subject to the scheme that has been entrusted to the depositary for safekeeping.

(6) The depositary—

(a) may retain out of any money entrusted to it as mentioned in subsection (5) enough money to pay that tax, and

(b) is entitled to be fully reimbursed by the participants in the scheme (by that method or another) for amounts recovered under subsection (5).

(7) In this section—

(a) “depositary”, in relation to a collective investment scheme (other than a unit trust scheme), has the meaning given by section 237(2) of the Financial Services and Markets Act 2000;

(b) “major participant”, in relation to a collective investment scheme, is to be read in accordance with section 136(4);

(c) “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.

(8) For the purposes of this Part “market value” is to be determined as for the purposes of TCGA 1992 (see, particularly, section 272 of that Act).

Amount of tax chargeable

99

(1) The amount of tax charged for a chargeable period with respect to a single-dwelling interest is stated in subsection (2) or (3).

(2) If the chargeable person is within the charge with respect to the single-dwelling interest on the first day of the chargeable period, the amount of tax charged is equal to the annual chargeable amount.

(3) Otherwise, the amount of tax charged is equal to the relevant fraction of the annual chargeable amount.

(4) The annual chargeable amount for a single-dwelling interest and a chargeable period is determined in accordance with the following table, by reference to the taxable value of the interest on the relevant day.

Annual chargeable amount	Taxable value of the interest on the relevant day
£3,500	More than £500,000 but not more than £1 million.
£7,000	More than £1 million but not more than £2 million.
£23,350	More than £2 million but not more than £5 million.
£54,450	More than £5 million but not more than £10 million.
£109,050	More than £10 million but not more than £20 million.
£218,200	More than £20 million.

(5) The “relevant day” is—

(a) for the purposes of subsection (2), the first day of the chargeable period;

(b) for the purposes of subsection (3), the first day in the chargeable period on which the chargeable person is within the charge with respect to the interest.

(6) The relevant fraction is—

$$N Y$where—“N” is the number of days from (and including) the relevant day to the end of the chargeable period;“Y” is the number of days in the chargeable period.$

(7) See also—

(a) section 100 (interim relief), and

(b) section 106 (adjustment of amount chargeable).

Interim relief

100

(1) Where tax is charged for a chargeable period with respect to a single-dwelling interest, the chargeable person may claim relief before the end of the chargeable period if—

(a) one or more days in the period is relievable with respect to the interest (by virtue of any of sections 133 to 150),

(b) one or more days in the chargeable period (after the first day in the period on which the chargeable person is within the charge with respect to the interest) are days on which the chargeable person is not within the charge with respect to the interest, or

(c) the taxable value of the single-dwelling interest on the first day in the chargeable period on which the chargeable person is within the charge with respect to the interest is higher than its taxable value on a later day in the chargeable period on which the chargeable person remains within the charge with respect to the interest.

(2) Relief under this section is called “interim relief”, and must be claimed—

(a) in an annual tax on enveloped dwellings return, or

(b) by amending such a return.

(3) Where interim relief is claimed under this section, section 163(1) (payment of tax by filing date for annual tax on enveloped dwellings return) has effect as if the amount of tax charged with respect to the single-dwelling interest were the sum of amounts A and B.

(4) Amount A is the total of all the daily amounts for days in the pre-claim period on which the chargeable person is within the charge with respect to the single-dwelling interest, other than days that are relievable with respect to the single-dwelling interest.

(5) Amount B is zero if—

(a) the day of the claim is relievable with respect to the single-dwelling interest by virtue of any of sections 133 to 150, or

(b) the chargeable person is not within the charge with respect to the single-dwelling interest on the day of the claim.

(6) Otherwise, amount B is the appropriate fraction of the annual chargeable amount for the single-dwelling interest.

For this purpose the annual chargeable amount is determined (under section 99(4)) on the basis that the day of the claim is the relevant day.

(7) In subsection (6) “appropriate fraction” means—

$$X Y$where—“X” is the number of days in the period beginning with the day of the claim and ending at the end of the chargeable period, and“Y” is the number of days in the chargeable period.$

(8) In this section—

“day of the claim” means the day on which the return mentioned in subsection (2)(a), or notice of the amendment made under subsection (2)(b), is delivered to HMRC;

“pre-claim period” means the period—beginning with the first day in the chargeable period mentioned in subsection (1) on which the chargeable person is within the charge with respect to the single-dwelling interest, andending with the day before the day of the claim.

(9) See sections 105 and 106 for provision about the adjustment of the amount of tax charged.

Indexation of annual chargeable amounts

101

(1) If the consumer prices index for September in 2013 or any later year (“the later year”) is higher than it was for the previous September, section 99(4) applies in relation to chargeable periods beginning on or after 1 April in the year after the later year with the following amendments.

(2) For each of the annual chargeable amounts stated in the table in section 99(4) (as it applies in relation to chargeable periods beginning in the previous 12 months) there is substituted the indexed amount.

(3) “The indexed amount” is found by—

(a) increasing the previous amount by the same percentage increase as the percentage increase in the consumer prices index, and

(b) rounding down the result to the nearest multiple of £50.

(4) In this section “consumer prices index” means the all items consumer prices index published by the Statistics Board.

(5) The Treasury must, before 1 April 2014 and before each subsequent 1 April, make an order stating the amounts that by virtue of this section are to be the annual chargeable amounts for chargeable periods beginning on or after that date.

Taxable value

102

(1) The taxable value of a single-dwelling interest on any day (“the relevant day”) is equal to its market value at the end of the latest day that—

(a) falls on or before that day, and

(b) is a valuation date in the case of that interest.

(2) Each of the following is a valuation date in the case of any single-dwelling interest—

(a) 1 April 2012;

(b) each 1 April falling 5 years, or a multiple of 5 years, after 1 April 2012.

(2A) But a day that is a valuation date only because of subsection (2)(b) (a “5-yearly valuation date”) is to be treated as if it were not a valuation date for the purpose of determining the taxable value of a single-dwelling interest on any day in the chargeable period beginning with that 5-yearly valuation date.

(3) The following are also valuation dates in the case of any single-dwelling interest to which a company is entitled on the relevant day (otherwise than as a member of a partnership)—

(a) the effective date of any substantial acquisition by the company of a chargeable interest in or over the dwelling concerned;

(b) the effective date of any substantial disposal of part (but not the whole) of the single-dwelling interest.

(4) The following are also valuation dates in the case of any single-dwelling interest to which a company is entitled on the relevant day as a member of a partnership—

(a) the effective date of any substantial acquisition as a result of which a chargeable interest in or over the dwelling concerned became an asset of the partnership,

(b) the effective date of any substantial disposal of part (but not the whole) of the single-dwelling interest.

(5) The following are also valuation dates in the case of any single-dwelling interest that is on the relevant day held for the purposes of a collective investment scheme—

(a) the effective date of any substantial acquisition, made for the purposes of the scheme, of a chargeable interest in or over the dwelling concerned;

(b) the effective date of any substantial disposal of part (but not the whole) of the single-dwelling interest.

(6) In this section references to a disposal of part of a single-dwelling interest include the grant of a chargeable interest out of the single-dwelling interest.

(7) The grant of an option does not count as the grant of a chargeable interest for the purposes of subsection (6).

Section 102: “substantial” acquisitions and disposals

103

(1) For the purposes of section 102—

(a) the acquisition of a chargeable interest in a dwelling is a “substantial acquisition” only if the chargeable consideration for the acquisition is £40,000 or more;

(b) the disposal of part (but not the whole) of a single-dwelling interest is a “substantial disposal” only if the chargeable consideration for the acquisition of the chargeable interest by the person acquiring it is £40,000 or more.

(2) If the acquisition mentioned in subsection (1)(a) is a transaction between persons who are connected with each other or not acting at arm's length, subsection (1)(a) applies as if the reference to the chargeable consideration for the acquisition were to the market value of the chargeable interest acquired.

(3) If the disposal mentioned in subsection (1)(b) is a transaction between persons who are connected with each other or not acting at arm's length, subsection (1)(b) applies as if the reference to the chargeable consideration for the acquisition in question were to the market value of the part of the single-dwelling interest disposed of.

(4) The chargeable consideration for the acquisition mentioned in subsection (1)(a) is taken to include the chargeable consideration for any linked acquisition of a chargeable interest in or over the same dwelling.

(5) The chargeable consideration for the transaction mentioned in subsection (1)(b) is taken to include the chargeable consideration for any linked disposal of part (but not the whole) of the single-dwelling interest concerned.

(6) For the purposes of subsection (2) the market value of the chargeable interest acquired is taken to be the sum of the market values of that chargeable interest and any chargeable interest in or over the same dwelling that is acquired in a linked transaction.

(7) For the purposes of subsection (3) the market value of the part of the single-dwelling interest disposed of is taken to be the sum of the market values of that chargeable interest and any chargeable interest in or over the same dwelling that is disposed of in a linked transaction.

(8) For the purposes of this section two or more transactions are “linked” if they form part of a single scheme, arrangement or series of transactions between the same vendor and purchaser or, in either case, persons connected with them.

(9) In this section “chargeable consideration”, “purchaser” and “vendor” have the same meaning as in Part 4 of FA 2003.

(10) In this section references to a disposal of part of a single-dwelling interest include the grant of a chargeable interest out of the single-dwelling interest.

No double charge

104

Tax in respect of a given single-dwelling interest is charged only once for any chargeable day even if more than one person is “the chargeable person” with respect to the tax charged.

Adjustment of amount charged

“Adjusted chargeable amount”

105

(1) In relation to a person on whom tax is charged for a chargeable period with respect to a single-dwelling interest, the “adjusted chargeable amount” is the total of the daily amounts for all the days in the period on which the chargeable person is within the charge with respect to the interest.

(2) The daily amount for any such day (“the actual day”) is—

$$1 Y × A$where—“Y” is the number of days in the chargeable period;“A” is the annual chargeable amount for the single-dwelling interest, determined (under section 99(4)) on the basis that the actual day is the relevant day.$

Adjustment of amount chargeable

106

(1) Where tax is charged for a chargeable period with respect to a single-dwelling interest and the adjusted chargeable amount is greater than the initial charged amount, the amount of tax charged is taken to be increased to the adjusted chargeable amount.

(2) In this section “the initial charged amount” means the amount of tax charged under section 99 for the period in respect of the interest.

(3) Subsection (4) applies where—

(a) tax is charged for a chargeable period with respect to a single-dwelling interest,

(b) the adjusted chargeable amount is less than the initial charged amount, and

(4) The amount of tax charged for the period with respect to the interest is taken to be reduced (at the end of the chargeable period) to the adjusted chargeable amount.

(5) Relief under subsection (3) must be claimed—

(a) in an annual tax on enveloped dwellings return, or

(b) by amending an annual tax on enveloped dwellings return.

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

(7) Relief under subsection (3) may be given by repayment of tax or otherwise.

(8) See also section 160 (return of adjusted amount chargeable); and see section 163(2) for provision about payment of additional tax by reference to the adjusted chargeable amount.

Chargeable interests and “single-dwelling interest”

Chargeable interests

107

(1) In this Part “chargeable interest” means—

(a) an estate, interest, right or power in or over land in the United Kingdom, or

(b) the benefit of an obligation, restriction or condition affecting the value of any such estate, interest, right or power.

(2) Where two or more persons are jointly entitled to a chargeable interest the chargeable interest is not regarded, for the purposes of this Part, as consisting of separate interests corresponding to the shares (if any) that those persons have by virtue of their joint entitlement.

(3) An exempt interest is not a chargeable interest for the purposes of this Part.

(4) The following are exempt interests—

(a) any security interest;

(b) a licence to use or occupy land;

(5) In subsection (4) “security interest” means an interest or right (other than a rentcharge) held for the purpose of securing the payment of money or the performance of any other obligation.

(6) In the application of this Part in Scotland the reference in subsection (5) to a rentcharge is to be read as a reference to a feu duty or a payment mentioned in section 56(1) of the Abolition of Feudal Tenure etc (Scotland) Act 2000 (asp 5).

(7) The Treasury may by regulations provide that any other description of interest or right in or over a dwelling is an exempt interest.

Meaning of “single-dwelling interest”

108

(1) References in this Part to a “single-dwelling interest” are to be read in accordance with this section.

(2) A chargeable interest that is exclusively in or over land consisting (on any day) of a single dwelling is a single-dwelling interest (on that day).

(3) Where a person is entitled to a chargeable interest that is exclusively in or over land consisting (on any day) of two or more single dwellings—

(a) provisions referring to a “single-dwelling interest” operate as if the person had (on that day) a separate chargeable interest in or over each dwelling, and

(b) the chargeable interest in or over each dwelling is therefore a single-dwelling interest.

(4) Where a person is entitled to a chargeable interest in or over land that on any day consists of one or more single dwellings and non-residential land—

(a) provisions referring to a “single-dwelling interest” operate as if the person had (on that day) a separate chargeable interest in or over each dwelling and a further separate chargeable interest in or over the non-residential land, and

(b) the chargeable interest in or over each dwelling is therefore a single-dwelling interest.

(5) A single-dwelling interest is referred to as a single-dwelling interest “in” the dwelling concerned.

(6) A single-dwelling interest in one dwelling is distinct from any single-dwelling interest in another dwelling, even if the dwellings stand successively on the same land.

(7) In this section—

(a) “non-residential land” means land that is not a dwelling or part of a dwelling;

(b) references to a dwelling include a part of a dwelling.

Different interests held in the same dwelling

109

(1) Subsection (2) applies if on one or more days in a chargeable period—

(a) a company is entitled to two or more single-dwelling interests in the same dwelling, or

(b) two or more single-dwelling interests in the same dwelling are held for the purposes of the same collective investment scheme.

(2) This Part has effect with respect to that chargeable period as if those separate interests constituted just one single-dwelling interest, the taxable value of which on any day is the sum of the taxable values of the separate interests.

(3) In calculating the taxable values of the separate interests for the purposes of subsection (2), the market value of each interest is determined, under the provisions of TCGA 1992 applied by section 98(8), on the assumption that the other interest or interests are placed on the open market with that interest (on the valuation date appropriate to that interest).

Interests held by connected persons

110

(1) If on any day (“the relevant day”) a company (“C”) is entitled to a single-dwelling interest in a dwelling and another person (“P”) who is connected with C is entitled to a different single-dwelling interest in the same dwelling, this Part has effect—

(a) in relation to C as if C were on that day entitled to P's single-dwelling interest as well as C's single-dwelling interest, and

(b) (if P is a company) in relation to P as if P were on that day entitled to C's single-dwelling interest as well as P's single-dwelling interest.

(2) This subsection provides for an exception to subsection (1).

Where P is an individual, C is not treated ... as entitled to P's single-dwelling interest on the relevant day unless on that day C is entitled to a single-dwelling interest in the dwelling that is a freehold or leasehold interest with a taxable value of more than £250,000.

(2A) Subsection (2B) applies in any case where—

(a) C would (without subsection (2B)) be treated, as a result of subsection (1) (read with section 109), as entitled to a single-dwelling interest with a taxable value (on the relevant day) of more than £2 million, but

(b) C would not be so treated if the value specified in subsection (2) were £500,000 (instead of £250,000).

(2B) Subsection (2) has effect as if the value specified in it were £500,000 (instead of £250,000).

(3) If on any day a single-dwelling interest (“the scheme interest”) is held for the purposes of a collective investment scheme and a person (“P”) who is connected with the scheme is entitled to a different single-dwelling interest in the same dwelling, this Part has effect—

(a) in relation to the scheme, as if both those separate interests were on that day held for the purposes of the scheme, and

(b) (if P is a company) in relation to P as if P were on that day entitled to the scheme interest as well as P's single-dwelling interest.

(4) If on any day a single-dwelling interest in a dwelling is held for the purposes of a collective investment scheme (“the first scheme”) and another interest in the same dwelling is held for the purposes of another collective investment scheme (“the second scheme”) that is connected with the first scheme, this Part has effect—

(a) in relation to the first scheme, as if both the interests were held on that day for the purposes of that scheme, and

(b) in relation to the second scheme, as if both interests were held on that day for the purposes of that scheme.

(5) See also—

(a) section 97, for provision about the liability to tax of persons treated under this section (read with section 104) as jointly entitled to a single-dwelling interest;

(b) paragraph 55 of Schedule 33, for provision about returns in cases involving joint entitlement.

(6) The provisions mentioned in subsection (5) are to be read as including corresponding provision for cases where the same single-dwelling interest is treated under this section as held—

(a) for the purposes of different collective investment schemes, or

(b) by a company and for the purposes of a collective investment scheme.

(7) In the application of this section to Scotland—

(a) the reference to a freehold interest is to the interest of the owner;

(b) the reference to a leasehold interest is to a tenant's right over or interest in property subject to a lease.

Different interests held in the same dwelling: effect of reliefs etc

111

(1) References in section 110 to a person do not include—

(a) a public body, as defined in section 153,

(b) a body listed in section 154(2) (bodies established for national purposes).

(2) Subsections (1) to (4) of section 110 do not apply in relation to a single-dwelling interest if—

(a) the day in question is relievable with respect to that interest by virtue of section 150 (providers of social housing),

(b) by virtue of section 151 (charitable companies) the ownership condition is regarded as not met with respect to the interest on that day, or

(c) the taxable value of the interest on that day is taken to be zero by virtue of section 155 (dwelling conditionally exempt from inheritance tax).

(3) Subsection (4) applies where the separate interests (the “relevant interests”) that under section 110 (or that section and section 109) are treated as constituting, on a day, just one single-dwelling interest (“the combined interest”) include—

(a) a freehold or leasehold interest, and

(b) a leasehold interest (“the inferior interest”) granted out of that interest.

(4) If the inferior interest is the most inferior relevant interest, the combined interest, and the dwelling itself (where relevant), are regarded for the purposes of the relevant relieving provisions as being exploited, on the day mentioned in subsection (3), in the way the inferior interest is exploited on that day.

(5) If the inferior interest is an interest in part only (“the sub-let part”) of the land that is the subject-matter of the combined interest, subsection (4) has effect in relation to the combined interest only so far as that interest relates to the sub-let part.

(6) In this section “the relevant relieving provisions” means sections 132 to 150.

(7) The inferior interest counts as “the most inferior relevant interest” if no relevant interest (see subsection (3)) is a leasehold interest granted out of it.

(8) In this section the reference to a leasehold interest includes the interest of a lessee under an agreement for a lease.

(9) In the application of this section to Scotland—

(a) the reference to a freehold interest is to the interest of the owner;

(b) the reference to a leasehold interest is to a tenant's right over or interest in property subject to a lease;

Meaning of “dwelling”

112

(1) A building or part of a building counts as a dwelling at any time when—

(a) it is used or suitable for use as a single dwelling, or

(b) it is in the process of being constructed or adapted for such use.

(2) Land that is, or is at any time intended to be, occupied or enjoyed with a dwelling as a garden or grounds (including any building or structure on such land) is taken to be part of that dwelling at that time.

(3) Land that subsists, or is at any time intended to subsist, for the benefit of a dwelling is taken to be part of the dwelling at that time.

(4) A building, or part of a building, used for a purpose specified in section 116(2) or (3) of FA 2003 is not used as a dwelling for the purposes of subsection (1).

(5) Where a building, or part of a building, is used for a purpose mentioned in subsection (4), no account is to be taken for the purposes of subsection (1) of its suitability for any other use.

(6) If a building or part of a building becomes temporarily unsuitable for use as a dwelling for any reason (including accidental damage, repairs or any other physical change to the building or its environment), that temporary unsuitability is ignored in determining whether or not the building or part of a building is, during the period in question, a dwelling for the purposes of this Part.

This subsection does not affect any of the provisions in sections 126 to 131.

Substantial performance of “off plan” purchase

113

(1) Subsection (2) applies where—

(a) a contract is entered into for the acquisition of a chargeable interest in or over land that consists of or includes a building, or part of a building, that is to be constructed or adapted for use as a single dwelling,

(b) substantial performance is treated as constituting the acquisition of the chargeable interest (under section 122), and

(c) construction or adaptation of the building, or the part of a building, has not begun by the time the contract is substantially performed.

(2) The chargeable interest deemed to be acquired as mentioned in subsection (1)(b) is taken to be in or over land that consists of or (as appropriate) includes a dwelling.

(3) If at any time after the substantial performance of the contract the obligation under the contract to carry out the construction or adaptation ceases to have effect without the construction or adaptation having been begun, subsection (2) ceases to apply at that time.

(4) A building or part of a building used for a purpose specified in section 116(2) or (3) of FA 2003 is not used as a dwelling for the purposes of subsection (1).

(5) In this section—

“contract” includes any agreement (including, in the case of Scotland, missives of let not constituting a lease);

“substantially performed” has the same meaning as in section 44 of FA 2003.

Power to modify meaning of “use as a dwelling”

114

(1) The Treasury may by order amend this Part so as to specify cases where use of a building is to be use of a building as a dwelling for the purposes of section 112(1) or 113(1).

(2) The reference in section 116(8)(a) of FA 2003 (power to amend section 116(2) and (3)) to “the purposes of subsection (1)” includes a reference to the purposes of sections 112(1) and 113(1).

Parts of a greater whole

115

(1) The fact that a part of a building is suitable for use as a dwelling does not prevent that part from forming part of a larger single dwelling.

(2) The fact that a building or structure that is—

(a) in the garden or grounds of a dwelling, and

(b) occupied or enjoyed with the dwelling,

is itself suitable for use as a single dwelling does not prevent it from being treated (in accordance with section 112(2)) as part of the dwelling.

Dwelling in grounds of another dwelling

116

(1) Subsection (4) applies where the conditions in subsection (2) are met in relation to two dwellings (the “main dwelling” and the “associated dwelling”) on a day (“the day in question”) in a chargeable period.

(2) The conditions are that—

(a) the main dwelling has a garden or grounds,

(b) the associated dwelling stands within the garden or grounds of the main dwelling, but is not occupied or enjoyed with that dwelling,

(c) the associated dwelling does not have separate access, and is not part of the same building as the main dwelling, and

(d) the common ownership condition is met.

(3) The common ownership condition is that—

(a) a company is entitled to a chargeable interest in the main dwelling, and the company or a person connected with the company is entitled to a chargeable interest in the associated dwelling, or

(b) a chargeable interest in the main dwelling is held for the purposes of a collective investment scheme, and a chargeable interest in the associated dwelling is held for the purposes of the same collective investment scheme.

(It does not matter whether or not the interest in the main dwelling and the interest in the associated dwelling are held for the same title.)

(4) This Part has effect in relation to the interests mentioned in paragraph (a) or (as the case may be) (b) of subsection (3) as if the main dwelling and the associated dwelling were, on the day in question, suitable for use as a single dwelling.

(5) Subsection (4) does not apply if—

(a) the day in question is, in relation to the interest in the main dwelling or the interest in the associated dwelling, relievable by virtue of a provision mentioned in subsection (6), or

(b) the ownership condition is, by virtue of section 151 (charitable companies), regarded as not being met on that day with respect to one or other of those interests.

(6) Those provisions are—

section 133 (property rental businesses);

section 134 (rental property: preparation for sale etc);

section 137 (dwellings opened to the public);

section 138 (property developers);

section 139 (property developers: exchange of dwellings);

section 141 (property traders);

section 143 (financial institutions acquiring dwellings in the course of lending);

section 144A (regulated home reversion plans);

section 145 (occupation by employees or partners of a qualifying trade or property rental business );

section 147A (caretaker flat owned by management company);

section 148 (farmhouses);

section 150 (providers of social housing).

(7) The reference in subsection (3)(a) to a person connected with the company does not include a public body (as defined in section 153) or a body listed in section 154(2) (bodies established for national purposes).

(8) The reference in subsection (3)(b) to a chargeable interest being held for the purposes of the same collective investment scheme includes a reference to a person connected with the scheme being entitled to the interest.

(9) The associated dwelling has “separate access” only if—

(a) there is access to the associated dwelling directly from a highway (in Scotland, a road) that the dwelling adjoins, or

(b) the person entitled to possession of the associated dwelling has access to that dwelling from a highway (in Scotland, a road), exclusively by passing over land that the person is entitled to pass over by reason of one or more rights of way or other interests in land to which the person is separately entitled.

(10) In this section—

in relation to a dwelling or dwellings, references to the “garden or grounds” are to land occupied or enjoyed with the dwelling or dwellings as a garden or grounds;

references to the person entitled to possession of a dwelling are to the person entitled to possession of the dwelling by reason of an estate or interest held by that person;

“separately entitled” means entitled otherwise than by reason of a chargeable interest in or over the main dwelling.

Dwellings in the same building

117

(1) Two parts of a building are “linked dwellings” if—

(a) each of them counts as a dwelling,

(b) there is private access between the two dwellings,

(d) the common ownership condition and the use condition are met.

(2) The common ownership condition is that—

(a) a company is entitled to a chargeable interest in one of the dwellings, and the company or a person connected with the company is entitled to a chargeable interest in the other dwelling, or

(b) a chargeable interest in one of the dwellings is held for the purposes of a collective investment scheme, and a chargeable interest in the other dwelling is held for the purposes of the same collective investment scheme.

(It does not matter whether or not the interests are held for the same title.)

(3) If on a day in a chargeable period (“the day in question”) two parts of a building constitute linked dwellings, this Part has effect in relation to the interests mentioned in paragraph (a) or (as the case may be) (b) of subsection (2) as if the two parts were, on the day in question, suitable for use as a single dwelling.

(4) Subsection (3) does not apply if—

(a) the day in question is, in relation to a chargeable interest mentioned in subsection (2)(a) or (as the case may be) (2)(b), relievable by virtue of a provision mentioned in subsection (5), or

(b) (in a case where paragraph (a) of subsection (2) applies) the ownership condition is, by virtue of section 151 (charitable companies), regarded as not being met on that day with respect to one or other of the chargeable interests mentioned in that paragraph.

(5) Those provisions are—

section 133 (property rental businesses);

section 134 (rental property: preparation for sale etc);

section 137 (dwellings opened to the public);

section 138 (property developers);

section 139 (property developers: exchange of dwellings);

section 141 (property traders);

section 143 (financial institutions acquiring dwellings in the course of lending);

section 144A (regulated home reversion plans);

section 145 (occupation by employees or partners of a qualifying trade or property rental business );

section 147A (caretaker flat owned by management company);

section 148 (farmhouses);

section 150 (providers of social housing).

(6) The reference in subsection (2)(a) to a person connected with the company does not include a public body (as defined in section 153) or a body listed in section 154(2) (bodies established for national purposes).

(7) If two dwellings in a building (dwelling A and dwelling B) are treated under this section as suitable for use as a single dwelling, and dwelling B and a third dwelling in the building (“dwelling C”) are treated under this section as suitable for use as a single dwelling, all three are treated as suitable for use as a single dwelling (and so on).

Section 117: supplementary

118

(1) The reference in section 117(2)(b) to a chargeable interest being held for the purposes of the same collective investment scheme includes a reference to a person connected with the scheme being entitled to the interest.

(2) For the purposes of section 117, there is private access between two dwellings if the person entitled to possession of each dwelling is entitled, by reason of a right of way or other interest in land, to have access to that person's dwelling from the other dwelling, without passing over any part of the building (or any other land) in which a third party has an interest entitling that third party to enter it.

(3) In subsection (2) “third party” means a person other than—

(a) the persons entitled to possession of the dwellings mentioned in subsection (2), and

(b) persons connected with any of them.

(4) The use condition mentioned in section 117(1)(d) is that each of the two dwellings—

(a) is occupied (or usually occupied) by a relevant individual,

(b) is intended to be so occupied (or usually so occupied), or

(5) In subsection (4) “relevant individual” means—

(a) an individual connected with the company mentioned in section 117(2)(a),

(b) an individual connected with the collective investment scheme mentioned in section 117(2)(b),

(d) an individual who is employed wholly or partly in connection with the occupation by a person falling within any of paragraphs (a) to (c) of a dwelling in the building, or provides services in connection with such a person's occupation of a dwelling in the building.

(6) In this section references to the person entitled to possession of a dwelling are to the person entitled to possession of the dwelling by reason of an estate or interest held by that person.

Terraces etc

119

Any structure (such as a terrace of houses or a pair of semi-detached houses) that is composed of or includes dwellings is regarded as a building for the purposes of sections 117 and 118.

Acquisitions and disposals

Acquisitions and disposals of chargeable interests

120

(1) References in this Part to the acquisition of a chargeable interest include any acquisition however effected (including an acquisition effected by the act of parties to a transaction, by order of a court or other authority, by or under any statutory provision or by operation of law).

(2) The surrender or release of a chargeable interest is—

(a) an acquisition of that interest by any person whose interest or right is benefited or enlarged by the transaction, and

(b) a disposal by the person ceasing to be entitled to that interest.

(3) The variation of a chargeable interest is—

(a) an acquisition of a chargeable interest by the person benefiting from the variation, and

(b) a disposal of a chargeable interest by the person whose interest is subject to or limited by the variation.

Date of acquisition or disposal

121

(1) A person who acquires a chargeable interest in or over land that consists of or includes a dwelling is treated for the purposes of this Part as acquiring the interest on the effective date of the acquisition (and therefore as entitled to the interest with effect from that date: see section 171).

(2) A person who disposes of a chargeable interest in or over land that consists of or includes a dwelling is treated for the purposes of this Part as ceasing to be entitled to the interest on the effective date of the disposal (and therefore as not being entitled to the interest on that day: see section 171).

(3) If a person's acquisition and disposal of a chargeable interest are completed on the same day, then for the purposes of this Part—

(a) the person's acquisition of the interest is ignored if it precedes the disposal;

(b) the person's disposal of the interest is ignored if it precedes the acquisition.

(4) The effective date of an acquisition of a chargeable interest is—

(a) the date on which the acquisition is completed, or

(b) any alternative date the Commissioners for Her Majesty's Revenue and Customs may prescribe by regulations.

(5) The effective date of a disposal of a chargeable interest is—

(a) the date on which the disposal is completed, or

(b) any alternative date the Commissioners for Her Majesty's Revenue and Customs may specify by regulations.

Contract and conveyance: the purchaser

122

(1) This section applies where a person (“P”) enters into a contract under which—

(a) P is to acquire a relevant chargeable interest, and

(b) the acquisition is to be completed by a conveyance.

(2) P is not regarded as acquiring any chargeable interest by reason of entering into the contract.

(3) If the contract is substantially performed without having been completed, this Part has effect as if the substantial performance of the contract were the completion of the acquisition provided for by the contract.

(4) Accordingly, where subsection (3) applies and the contract is subsequently completed by a conveyance, that completion is not treated for the purposes of section 102 (taxable value) as effecting the acquisition of a chargeable interest.

(5) Where subsection (3) applies and—

(a) the contract is afterwards rescinded or annulled, or

(b) performance of the contract is for any other reason terminated before the contract has been carried fully into effect,

this Part has effect as if P had at the relevant time disposed of the chargeable interest referred to in subsection (1)(a).

(6) In subsection (5) “the relevant time” means—

(a) the time when the rescission or annulment takes effect, or

(b) (as the case requires) the time when performance of the contract ceases.

(7) Where subsection (3) applies and the contract is afterwards varied (or partially rescinded) so that the chargeable interest to be acquired under the contract is not the same as the chargeable interest to which the contract originally related, this Part (including subsection (3)) has effect as if the variation of the contract effected—

(a) the disposal by P of the chargeable interest referred to in subsection (1)(a), and

(b) the substantial performance of the contract, as varied.

(8) If the parties to the contract proceed as if they had varied the contract in the way mentioned in subsection (7) (without actually doing so), subsection (7) applies as if they had actually made the corresponding variation in the terms of the contract.

(9) In this section—

(a) references to completion are to the completion of the acquisition proposed, whether or not between the original parties;

(b) “contract” includes any agreement;

(d) “relevant chargeable interest” means a chargeable interest in or over land that consists of or includes a dwelling;

(e) “substantially performed” has the same meaning as in section 44 of FA 2003.

Contract and conveyance: the vendor

123

(1) This section applies where a person (“V”) enters into a contract under which—

(a) V is to dispose of a relevant chargeable interest, and

(b) the disposal is to be completed by a conveyance.

(2) V is not regarded as disposing of a chargeable interest by reason of entering into the contract.

(3) If the contract is substantially performed without having been completed, this Part has effect as if the substantial performance of the contract were the completion of the disposal provided for by the contract.

(4) Accordingly, where subsection (3) applies and the contract is subsequently completed by a conveyance, that completion is not treated for the purposes of section 102 as effecting the disposal of a chargeable interest.

(5) Where subsection (3) applies and—

(a) the contract is afterwards rescinded or annulled, or

(b) performance of the contract is for any other reason terminated before the contract has been carried fully into effect,

this Part has effect as if V had at the relevant time re-acquired the chargeable interest referred to in subsection (1)(a).

(6) In subsection (5) “the relevant time” means—

(a) the time when the rescission or annulment takes effect, or

(b) (as the case requires) the time when performance of the contract ceases.

(7) Where subsection (3) applies and the contract is afterwards varied (or partially rescinded) so that the chargeable interest to be disposed of under the contract is not the same as the chargeable interest to which the contract originally related, this Part (including subsection (3)) has effect as if the variation of the contract effected—

(a) the re-acquisition by V of the chargeable interest referred to in subsection (1)(a), and

(b) the substantial performance of the contract, as varied.

(8) If the parties to the contract proceed as if they had varied the contract in the way mentioned in subsection (7) (without actually doing so), subsection (7) applies as if they had actually made the corresponding variation in the terms of the contract.

(9) In this section—

(a) references to completion are to the completion of the disposal proposed, between the same parties, in substantial conformity with the contract;

(b) “contract” includes any agreement;

(d) “relevant chargeable interest” means a chargeable interest in or over land that consists of or includes a dwelling;

(e) “substantially performed” has the same meaning as in section 44 of FA 2003.

New dwellings, conversions, demolition etc

New dwellings

124

(1) Where a new dwelling is being or has been constructed (whether or not as part of a larger building) the earlier of the following days is a valuation date in the case of a single-dwelling interest in that dwelling—

(a) the completion day;

(b) the day on which the dwelling is first occupied.

(2) The reference in subsection (1) to the construction of a new dwelling—

(a) includes the production of a new dwelling by the alteration (whether structural or otherwise) of an existing building, but

(b) does not include a case to which section 125 (dwellings produced from other dwellings) or section 128 (demolition and replacement: new dwellings) applies.

(3) The reference in subsection (1) to the “completion day” is to the day on which the new dwelling is treated as having come into existence for the purposes of—

(a) Part 1 of the Local Government Finance Act 1992 (council tax: England and Wales) (see section 17 of that Act), or

(b) Part 2 of that Act (council tax: Scotland) (see section 83 of that Act), or

(4) In this section “building” includes a part of a building.

Dwellings produced from other dwellings

125

(1) This section applies where an existing building that is a dwelling or dwellings (“the old dwelling” or “the old dwellings”) becomes a different dwelling or dwellings ( “ new ” dwellings) as a result of structural alteration.

(2) Any question as to whether or not a person has a single-dwelling interest at any time either in the old dwelling or dwellings or in a new dwelling is determined on the assumption that the old dwelling or dwellings cease to exist, and any new dwelling come into existence, only when the conversion is completed.

(3) The day after the conversion is completed is a valuation date in the case of any single-dwelling interest in a new dwelling.

(4) References to when the conversion is completed are to the end of the day on which the new dwelling is treated as having come into existence (or the first day on which all the new dwellings are treated as having come into existence) for the purposes of—

(a) Part 1 of the Local Government Finance Act 1992 (council tax: England and Wales) (see section 17 of that Act), or

(b) Part 2 of that Act (council tax: Scotland) (see section 83 of that Act), or

(5) In this section “building” includes a part of a building.

Demolition of a dwelling

126

(1) This section and sections 127 to 129 apply where a building that is a dwelling (“the old dwelling”) is demolished after 1 April 2013.

(2) Except so far as express provision to the contrary is made in sections 127 to 129, any question as to whether a person has a single-dwelling interest in the dwelling, and any question as to the taxable value of such an interest, is determined as if the dwelling had not been demolished.

(3) For the purposes of subsection (1) the demolition of a building is treated as having occurred after 1 April 2013 if a day after 1 April 2013 is the first day on which—

(a) the demolition has begun, and

(b) as a result, the building is no longer suitable for use as a dwelling.

(4) In this section “building” includes a part of a building.

Demolition without replacement

127

(1) Subsection (2) applies if a person entitled to a single-dwelling interest in the old dwelling notifies an officer of Revenue and Customs that to the best of the person's knowledge there is no proposal to construct any dwelling or dwellings on the site of the old dwelling.

(2) Any question as to whether a person has a single-dwelling interest in the old dwelling is determined on the assumption that the old dwelling ceases (or ceased) to exist with effect from the end of the day mentioned in subsection (3).

(3) That day is the first day on which—

(a) the demolition has begun, and

(b) as a result, the building in question is no longer suitable for use as a dwelling.

(4) A notification under subsection (1) must be given—

(a) in an annual tax on enveloped dwellings return, or

(b) by amending such a return.

(5) In this section—

(a) “building” includes part of a building;

(b) “the site of the old dwelling” means the land on which the dwelling stood and that counted as part of the dwelling;

(c) the reference to the construction of a dwelling or dwellings on that site is to the construction of a dwelling or dwellings wholly or partly on the site.

Demolition and replacement: new dwellings

128

(1) Subsection (2) applies if one or more dwellings (referred to below as “new dwellings”) are constructed on the site of the old dwelling after the demolition.

(2) Any question as to whether or not a person has a single-dwelling interest at any time either in the old dwelling or in a new dwelling is determined on the assumption that the old dwelling ceases to exist, and the new dwellings come into existence, only when the rebuilding is completed.

(3) The day after the rebuilding is completed is a valuation date in the case of any single-dwelling interest in a new dwelling.

(4) In subsection (1)—

(a) “the site of the old dwelling” means the land on which the dwelling stood and that counted as part of the dwelling;

(b) the reference to the construction of a dwelling on that site is to the construction of a dwelling wholly or partly on the site.

(5) References to when the rebuilding is completed are to the end of whichever of the following days is earlier—

(a) the completion day;

(b) the day on which the last of the new dwellings to be occupied is first occupied.

(6) The reference in subsection (5) to the “completion day” is to the day on which the new dwelling is treated as having come into existence (or the first day on which all the new dwellings are treated as having come into existence) for the purposes of—

(a) Part 1 of the Local Government Finance Act 1992 (council tax: England and Wales) (see section 17 of that Act), or

(b) Part 2 of that Act (council tax: Scotland) (see section 83 of that Act), or

Demolition and replacement: other cases

129

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Finance Act 2013

Meaning of “decommissioning expenditure”

81

Annual report

82

Effect of claim on PRT

83

Terminal losses accruing by virtue of another’s default

84

Claims under agreement not to affect oil allowance

85

Decommissioning security settlements

Removal of IHT charges in respect of decommissioning security settlements

86

Loan relationships arising from decommissioning security settlements

87

Decommissioning expenditure etc

Decommissioning expenditure taken into account for PRT purposes

88

Miscellaneous amendments relating to decommissioning

89

Capital allowances

Expenditure on decommissioning onshore installations

90

Expenditure on decommissioning certain redundant plant or machinery

91

Expenditure on site restoration

92

Restrictions on allowances for certain oil-related expenditure

93

PART 3 — Annual tax on enveloped dwellings

The charge to tax

Charge to tax

94

Entitlement to interests

95

Person liable

96

Liability of persons jointly entitled

97

Collective investment schemes: liability for and collection of tax

98

Amount of tax chargeable

99

Interim relief

100

Indexation of annual chargeable amounts

101

Taxable value

102

Section 102: “substantial” acquisitions and disposals

103

No double charge

104

Adjustment of amount charged

“Adjusted chargeable amount”

105

Adjustment of amount chargeable

106

Chargeable interests and “single-dwelling interest”

Chargeable interests

107

Meaning of “single-dwelling interest”

108

Different interests held in the same dwelling

109

Interests held by connected persons

110

Different interests held in the same dwelling: effect of reliefs etc

111

Meaning of “dwelling”

Meaning of “dwelling”

112

Substantial performance of “off plan” purchase

113

Power to modify meaning of “use as a dwelling”

114

Parts of a greater whole

115

Dwelling in grounds of another dwelling