Finance Act 2013

• (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;

• (c) the reference to an agreement for lease includes missives of let.

Meaning of “dwelling”

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,

• (c) the two parts of the building are not (together) used or suitable for use as a single dwelling, and

• (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

• (c) is not occupied.

• (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),

• (c) an individual who occupies (or is to occupy) the dwelling concerned otherwise than on commercial terms, or

• (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;

• (c) “conveyance” includes any instrument;

• (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;

• (c) “conveyance” includes any instrument;

• (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

• (c) the Rates (Northern Ireland) Order 1977 (S.I. 1977/2157 (N.I. 28)) (see Article 25B of that Order).

• (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

• (c) the Rates (Northern Ireland) Order 1977 (S.I. 1977/2157 (N.I. 28)) (see Article 25B of that Order).

• (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

• (c) the Rates (Northern Ireland) Order 1977 (S.I. 1977/2157 (N.I. 28)) (see Article 25B of that Order).

Demolition and replacement: other cases

129

• (1) This section applies if—

• (a) a building is constructed on the site of the old dwelling after the demolition, and

• (b) section 128 does not apply.

• (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 to exist on the day after—

• (a) the day on which the change of use is approved, or

• (b) if later, the day on which the old dwelling ceased to be occupied.

• (3) 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.

Conversion of dwelling for non-residential use

130

• (1) This section applies where a building or part of a building—

• (a) has been suitable for use as a dwelling, and

• (b) is altered for the purpose of making it suitable for use otherwise than as a dwelling.

• (2) The question whether or not the alterations make the building or part unsuitable for use as a dwelling is one of fact (but see subsection (3)).

• (3) The building or part will not be regarded as having become unsuitable for use as a dwelling as a result of the alterations at any time unless by that time any planning permission , development consent or infrastructure consent required for the alterations has been granted (and the alterations have been made in accordance with any such permission or consent).

• (4) In this section “planning permission” has the meaning given by the relevant planning enactment.

• (5) “The relevant planning enactment” means—

• (a) in relation to land in England and Wales, section 336(1) of the Town and Country Planning Act 1990;

• (b) in relation to land in Scotland, section 277(1) of the Town and Country Planning (Scotland) Act 1997;

• (c) in relation to land in Northern Ireland, Article 2(2) of the Planning (Northern Ireland) Order 1991 (S.I. 1991/1220 (N.I. 11)).

• (6) In this section—

• (a) “development consent” means development consent under the Planning Act 2008.

• (b) “infrastructure consent” means infrastructure consent under the Infrastructure (Wales) Act 2024.

Damage to a dwelling

131

• (1) This section applies where a dwelling is damaged so as to be temporarily unsuitable for use as a dwelling.

• (2) The unsuitability for use as a dwelling is taken into account in applying the definition of “dwelling” for the purposes of this Part (see section 112) only if the first and second conditions are met.

• (3) The first condition is that the damage is—

• (a) accidental, or

• (b) otherwise caused by events beyond the control of the person entitled to the single-dwelling interest.

• (4) The second condition is that, as a result of the damage, the building concerned is unsuitable for use as a dwelling for at least 90 consecutive days.

• (5) Where the first and second conditions are met—

• (a) the entire period of unsuitability for use as a dwelling (including the first 90 days) is taken into account in applying the definition of “dwelling”, and

• (b) work done in that period to restore the building to suitability for use as a dwelling does not count, for the purposes of section 112 or 113, as construction or adaptation of the building for use as a dwelling.

• (6) The first condition is regarded as not being met if the damage occurs in the course of work that—

• (a) is done for the purpose of altering the dwelling (or a building of which it forms part), and

• (b) itself involves, or could be expected to involve, making the building unsuitable for use as a dwelling for 30 days or more.

• (7) In this section—

• (a) references to alteration include partial demolition;

• (b) references to a building include a part of a building.

• (8) In this section references to damage include damage done before 1 April 2013; and days before 1 April 2013 may be taken into account for the purposes of subsection (4).

Reliefs

Effect of reliefs under sections 133 to 150

132

• (1) Subsection (2) applies where tax is charged, in respect of a single-dwelling interest, for a chargeable period that includes one or more days that are relievable as a result of any of the provisions listed in subsection (3) (or for more than one such period).

• (2) For any such period, the adjusted chargeable amount is to be calculated on the basis that the chargeable person is not within the charge with respect to the interest on any relievable day.

• (3) The 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).

• (4) See also section 106 (adjustment of amount chargeable and claim for relief).

Property rental businesses

133

• (1) A day in a chargeable period is relievable in relation to a single-dwelling interest if on that day the interest—

• (a) is being exploited as a source of rents or other receipts (other than excluded rents) in the course of a qualifying property rental business carried on by a person entitled to the interest, or

• (b) steps are being taken to secure that the interest will, without undue delay, be so exploited in the course of a qualifying property rental business that is being carried on, or is to be carried on, by a person entitled to the interest.

• (2) A day is not relievable by virtue of subsection (1) or section 134 in the case of a single-dwelling interest if on that day a non-qualifying individual is permitted to occupy the dwelling.

• (3) In this Part “qualifying property rental business” means a property rental business that is run on a commercial basis and with a view to profit.

• (4) A business is a “property rental business” for the purposes of subsection (3) if it is a property business as defined in Chapter 2 of Part 4 of CTA 2009, but—

• (a) the question whether or not a business is a property rental business for the purposes of subsection (3) is determined without reference to whether or not any profits of the business are chargeable to corporation tax (and section 204(2) of CTA 2009 is therefore disregarded), and

• (b) for the purposes of this subsection the “rents or other receipts” referred to in section 207(1) of CTA 2009 are taken not to include excluded rents

• (5) In subsection (1)(b) “without undue delay” means without delay except so far as delay is justified by commercial considerations or cannot be avoided.

• (6) In this Part “excluded rents” means rents within any of classes 2 to 6 in the table in section 605(2) of CTA 2010.

Rental property: preparation for sale, demolition etc

134

• (1) A day (“day X”) on which a person (“P”) is entitled to a single-dwelling interest is relievable in relation to that interest if—

• (a) on day X the dwelling is unoccupied and any of the first to fourth conditions is met (see below),

• (b) day X is preceded by one or more days (“qualifying days”) that are relievable under section 133 in relation to the interest and on which P, or a relevant partner, was entitled to the interest, and

• (c) the days (if any) between day X and the last of the qualifying days to precede day X are all relievable under this section.

• First condition The first condition is that steps are being taken to secure that the interest will be sold without undue delay.

• Second condition The second condition is that—steps are being taken to secure that the dwelling will be demolished without undue delay, andif it is intended that a new dwelling will be constructed on the site of the existing dwelling, the intention is that it will be used in a relievable way.

• Third condition The third condition is that—steps are being taken to secure that the dwelling will be converted into a different dwelling without undue delay, andit is intended that the new dwelling will be used in a relievable way.

• Fourth condition The fourth condition is that steps are being taken to secure that the dwelling will be converted into a building other than a dwelling without undue delay.

• (2) A dwelling is “used in a relievable way” for the purposes of subsection (1) if the single-dwelling interest in question is exploited in such a way, or held in such a way and for such purposes, (or, as the case requires, the dwelling itself is exploited or used in such a way) that a day of such exploitation, ownership or use would be relievable under any of sections 133, 137, 145 and 148.

• (3) In this section—

• “relevant partner”, where P is (on day X) entitled to the interest as a member of a partnership, means a person who was at the time in question carrying on the qualifying rental property business concerned as a member of that partnership;

• “without undue delay” means without delay, except so far as delay is justified by commercial considerations or cannot be avoided.

Non-qualifying occupation: look-forward and look-back

135

• (1) Subsection (2) applies if on a day in a chargeable period (“the day of non-qualifying occupation”)—

• (a) a single-dwelling interest to which a person (“the landlord”) is entitled is being exploited as mentioned in section 133(1)(a), or steps are being taken to secure that the interest will be so exploited, as mentioned in section 133(1)(b), and

• (b) a non-qualifying individual is permitted to occupy the dwelling.

• (2) No subsequent day in that chargeable period, or in any of the subsequent 3 chargeable periods, that meets the continuity of ownership condition and would (in the absence of this subsection) be relievable by virtue of section 133(1)(b) is treated as relievable by virtue of that provision unless a day of qualifying use falls between that day and the day of non-qualifying occupation.

• (3) A day meets the continuity of ownership condition if on that day—

• (a) the landlord is entitled to the single-dwelling interest, or

• (b) if the landlord carried on or (as the case requires) intended to carry on the property rental business in partnership, another member of the partnership is entitled to the interest.

• (4) Subsection (5) applies if a person who is a non-qualifying individual in relation to a single-dwelling interest occupies the dwelling on a day in a chargeable period (“the day of non-qualifying occupation”).

• (5) An earlier day in that or the preceding chargeable period (“the earlier day”) is not relievable by virtue of section 133(1)(b) or 134 if a relevant person is entitled to the single-dwelling interest on that day.

• (6) In subsection (5) “relevant person” means—

• (a) a person who is entitled to the single-dwelling interest on the day of non-qualifying occupation, or

• (b) if a person falling within paragraph (a) is or has been a member of a partnership whose members have at any time exploited the single-dwelling interest as a source of rents and receipts in a property rental business, any other member of that partnership.

• (7) Subsection (5) does not apply in relation to the earlier day if a day that is relievable by virtue of section 133(1)(a) falls between that earlier day and the day of non-qualifying occupation.

• (8) For the purposes of this section—

• (a) “day of qualifying use”, in relation to a single-dwelling interest, means a day that is relievable in the case of the interest by virtue of section 133(1)(a);

• (b) occupation of any part of a dwelling is regarded as occupation of the dwelling.

Meaning of “non-qualifying individual”

136

• (1) In sections 133 and 135 “non-qualifying individual”, in relation to a single-dwelling interest, means any of the following—

• (a) an individual who is entitled to the interest (otherwise than as a member of a partnership),

• (b) an individual (“a connected person”) who is connected with a person entitled to the interest,

• (c) if a person is entitled to the interest as a member of a partnership, an individual who is, or is connected with, a qualifying member of that partnership,

• (d) an individual (“a relevant settlor”) who is the settlor in relation to a settlement of which a trustee is (in the capacity of trustee) connected with a person who is entitled to the interest,

• (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), or

• (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) In subsection (1)(c) “qualifying member”, in relation to a partnership, means a member of the partnership who is entitled to a 50% or greater share—

• (a) in the income profits of the partnership, or

• (b) in the partnership's assets.

• (3) In subsection (1)(i) “relevant collective investment scheme”, in relation to a single-dwelling interest, means a collective investment scheme that meets the ownership condition with respect to the interest.

• (4) A person who participates in a collective investment scheme is a “major participant” in the scheme if the person—

• (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 subsection (4)(a) to profits or income arising from the scheme is to profits or income arising from the acquisition, holding, management or disposal of the property subject to the scheme.

• (6) For the purposes of subsection (1), section 1122 of CTA 2010 (as applied by section 172) has effect as if subsections (7) and (8) of that section (application of rules about connected persons to partnerships) were omitted.

• (7) In this section—

• “relative” means brother, sister, ancestor or lineal descendant;

• “settlement” and “settlor” have the same meaning as in Chapter 5 of Part 5 of ITTOIA 2005 (see section 620 of that Act).

• (8) In subsection (1)(d) “trustee” is to be read in accordance with section 1123(3) of CTA 2010 (“connected persons”: supplementary).

Dwellings opened to the public

137

• (1) A day in a chargeable period is relievable in relation to a single-dwelling interest if the first or second condition is met on that day.

• (2) The first condition is that the dwelling is being exploited as a source of income in the course of a qualifying trade in the normal course of which the public are offered the opportunity to make use of, stay in or otherwise enjoy the dwelling as customers of the trade on least 28 days in any year.

• (3) The second condition is that steps are being taken to secure—

• (a) that the dwelling will (in that or a future chargeable period) be exploited as a source of income in the course of a qualifying trade such as is mentioned in subsection (2), and

• (b) that it will be so exploited without delay, except so far as delay is justified by commercial considerations or cannot otherwise be avoided.

• (4) In this section “qualifying trade” means a trade carried on on a commercial basis and with a view to profit.

• (5) For the purposes of this section persons are not taken to have an opportunity to make use of, stay in or otherwise enjoy a dwelling unless the areas that they are permitted to make use of, stay in or otherwise enjoy include a significant part of the interior of the dwelling.

• (6) The size (relative to the size of the whole dwelling), nature, and function of the area or areas concerned are to be taken into account in determining whether they form a significant part of the interior of the dwelling.

Property developers

138

• (1) A day in a chargeable period is relievable in relation to a single-dwelling interest if on that day—

• (a) a person carrying on a property development trade (“the property developer”) is entitled to the interest, and

• (b) the interest is held exclusively for the purpose of developing and reselling the land in the course of the trade.

• (2) If the property developer holds an interest for the purpose mentioned in subsection (1)(b), any additional purpose the property developer may have of exploiting the interest as a source of rents or other receipts in the course of a qualifying property rental business (after developing the land and before reselling it) is treated as not being a separate purpose in applying the test in subsection (1)(b).

• (3) A day is not relievable by virtue of subsection (1) if on the day a non-qualifying individual is permitted to occupy the dwelling.

• (4) In this Part “property development trade” means a trade that—

• (a) consists of or includes buying and developing for resale residential or non-residential property, and

• (b) is run on a commercial basis and with a view to profit.

• (5) In this section references to development include redevelopment.

Property developers: exchange of dwellings

139

• (1) A day in a chargeable period is relievable in relation to a single-dwelling interest if—

• (a) a person (“the property developer”) is on that day entitled to a single-dwelling interest (“the returned interest”) that was acquired (by the relevant person) in the course of a property development trade, and

• (b) that acquisition (“the reverse acquisition”) was part of a qualifying exchange.

• (2) A day is not relievable by virtue of this section if on that day a non-qualifying individual is permitted to occupy the dwelling.

• (3) In this section “the relevant person” means—

• (a) if the property developer is entitled to the returned interest as a member of a partnership, the persons who acquired the interest as members of the partnership, or

• (b) otherwise, the property developer (and any person who acquired the returned interest jointly with the property developer).

• (4) The reverse acquisition is “part of a qualifying exchange” only if—

• (a) it was made by way of transfer,

• (b) the person from whom the acquisition was made itself acquired (by way of grant or transfer) a chargeable interest in or over a new dwelling from the relevant person, and

• (c) each of those acquisitions was entered into in consideration of the other.

• (5) A building or part of a building is a “new dwelling” if—

• (a) it has been constructed for use as a single dwelling and has not previously been occupied, or

• (b) it has been adapted for use as a single dwelling and has not been occupied since its adaptation.

Property developers: supplementary

140

• (1) Subsection (2) applies if on a day in a chargeable period—

• (a) a person carrying on a property development trade (“the property developer”) is entitled to a single-dwelling interest that has been acquired in the course of that trade (whether or not the acquisition was part of a qualifying exchange for the purposes of section 139), and

• (b) a non-qualifying individual is permitted to occupy the dwelling.

• (2) No subsequent day is relievable in the case of the single-dwelling interest by virtue of section 138(1) or 139(1) if—

• (a) the day falls within that chargeable period, or any of the subsequent 3 chargeable periods, and

• (b) there is continuity of ownership on that day.

• (3) There is “continuity of ownership” on any day on which—

• (a) the property developer is entitled to the single-dwelling interest, or

• (b) if the property developer carried on the property development trade in partnership, another member of the partnership is entitled to the interest.

• (4) Subsection (5) applies if—

• (a) on a day in a chargeable period (“the day of non-qualifying occupation”) a person who is a non-qualifying individual in relation to a single-dwelling interest is occupying the dwelling in question, and

• (b) on an earlier day in that, or the preceding, chargeable period (“the earlier day”) the conditions in section 138(1)(a) and (b) are met in relation to the same single-dwelling interest.

• (5) The earlier day is not relievable by virtue of section 138(1) in the case of the single-dwelling interest if—

• (a) a person who is entitled to the interest on the earlier day is also entitled to it on the day of non-qualifying occupation, or

• (b) if the trade mentioned in section 138(1) is carried on in partnership, a person who has at any time carried that business on in partnership is entitled to the interest on the day of non-qualifying occupation.

• (6) Subsection (7) applies if—

• (a) on a day in a chargeable period (“the day of non-qualifying occupation”) a person who is a non-qualifying individual in relation to a single-dwelling interest is occupying the dwelling in question, and

• (b) on an earlier day in that, or the preceding, chargeable period (“the earlier day”) the conditions in section 139(1)(a) and (b) are met in relation to the same single-dwelling interest.

• (7) The earlier day is not relievable by virtue of section 139(1) in the case of the single-dwelling interest if—

• (a) a person who is entitled to the interest on the earlier day is also entitled to it on the day of non-qualifying occupation, or

• (b) where the trade mentioned in section 139(1) is carried on in partnership, a person who has at any time carried that trade on in partnership is entitled to the interest on the day of non-qualifying occupation.

• (8) If a day that is relievable by virtue of section 133(1)(a) falls between the earlier day mentioned in subsection (5) or (as the case may be) (7) and the day of non-qualifying occupation, that subsection does not apply in relation to that earlier day.

• (9) For the purposes of sections 138 and 139 and this section—

• (a) “non-qualifying individual” has the meaning given by section 136(1);

• (b) occupation of any part of a dwelling is regarded as occupation of the dwelling.

Property traders

141

• (1) A day in a chargeable period is relievable in relation to a single-dwelling interest if on that day—

• (a) a person carrying on a property trading business is entitled to the interest, and

• (b) the interest is held as stock of the business and for the sole purpose of resale in the course of the business.

• (2) A single-dwelling interest in a dwelling is taken not to be held for the sole purpose of resale in the course of a property trading business at any time when a non-qualifying individual is permitted to occupy the dwelling.

• (3) In this Part “property trading business” means a business that—

• (a) consists of or includes activities in the nature of a trade of buying and selling dwellings, and

• (b) is carried on on a commercial basis and with a view to profit.

Property traders: supplementary

142

• (1) Subsection (2) applies if on a day in a chargeable period (“the day of non-qualifying occupation”)—

• (a) a person carrying on a property trading business (“the property trader”) is entitled to a single-dwelling interest that is held as mentioned in section 141(1)(b), and

• (b) a non-qualifying individual is permitted to occupy the dwelling.

• (2) No subsequent day is relievable in the case of the single-dwelling interest by virtue of section 141(1) if—

• (a) the day falls within that chargeable period, or any of the subsequent 3 chargeable periods, and

• (b) the property trader or a relevant partner is entitled to the interest on that day.

• (3) If on the day of non-qualifying occupation mentioned in subsection (1) the property trader carries on the property trading business in partnership, “relevant partner” means any other person who is, at any time, a member of that partnership.

• (4) Subsection (5) applies if—

• (a) on a day in a chargeable period (“the day of non-qualifying occupation”) a person who is a non-qualifying individual in relation to a single-dwelling interest is occupying the dwelling in question, and

• (b) on an earlier day in that, or the preceding, chargeable period (“the earlier day”) the conditions in section 141(1)(a) and (b) are met in relation to the same single-dwelling interest.

• (5) The earlier day is not relievable by virtue of section 141(1) in the case of the single-dwelling interest if—

• (a) a person who is entitled to the interest on the earlier day is also entitled to it on the day of non-qualifying occupation, or

• (b) if the business mentioned in section 141(1) is carried on in partnership, a person who has at any time carried that business on in partnership is entitled to the interest on the day of non-qualifying occupation.

• (6) Subsection (5) does not apply in relation to the earlier day if a day that is relievable by virtue of section 133(1)(a) falls between the earlier day and the day of non-qualifying occupation.

• (7) For the purposes of this section and section 141—

• (a) “non-qualifying individual” has the meaning given by section 136(1);

• (b) occupation of any part of a dwelling is regarded as occupation of the dwelling.

Financial institutions acquiring dwellings in the course of lending

143

• (1) A day in a chargeable period is relievable in relation to a single-dwelling interest if matters stand as follows on that day—

• (a) a financial institution carrying on a business that involves the lending of money is entitled to the interest,

• (b) the financial institution has acquired the interest in the course of that business and in connection with those lending activities, and

• (c) the interest is held with the intention that it will be sold in the course of that business without delay (except so far as delay is justified by commercial considerations or cannot be avoided).

• (2) A single-dwelling interest in a dwelling is taken not to be held with the intention mentioned in subsection (1)(c) at any time when a non-qualifying individual is permitted to occupy the dwelling.

• (3) In this Part (except where otherwise stated) “financial institution” has the meaning given by section 564B of ITA 2007; but for this purpose section 564B(1) is to be read as if paragraph (d) of that subsection were omitted.

Section 143: supplementary

144

• (1) Subsection (2) applies if on a day in a chargeable period—

• (a) a financial institution that carries on a business involving the lending of money is entitled to a single-dwelling interest that has been acquired by it as mentioned in section 143(1)(b), and

• (b) a non-qualifying individual is permitted to occupy the dwelling.

• (2) No subsequent day is relievable in the case of the single-dwelling interest by virtue of section 143(1) if—

• (a) the day falls within that chargeable period, or any of the subsequent 3 chargeable periods, and

• (b) there is continuity of ownership on that day.

• (3) There is continuity of ownership on a day on which—

• (a) the financial institution is entitled to the single-dwelling interest, or

• (b) if the financial institution carried on the business mentioned in subsection (1)(a) in partnership, another member of the partnership is entitled to the interest.

• (4) Subsection (5) applies if—

• (a) on a day in a chargeable period (“the day of non-qualifying occupation”) a person who is a non-qualifying individual in relation to a single-dwelling interest is occupying the dwelling in question, and

• (b) on an earlier day in that, or the preceding, chargeable period (“the earlier day”) the conditions in section 143(1)(a) to (c) are met in relation to the same single-dwelling interest.

• (5) The earlier day is not relievable by virtue of section 143(1) in the case of the single-dwelling interest if—

• (a) a person who is entitled to the interest on the earlier day is also entitled to it on the day of non-qualifying occupation, or

• (b) if the business mentioned in section 143(1) is carried on in partnership, a person who has at any time carried that business on in partnership is entitled to the interest on the day of non-qualifying ownership.

• (6) Subsection (5) does not apply in relation to the earlier day if a day that is relievable by virtue of section 133(1)(a) falls between the earlier day and the day of non-qualifying occupation.

• (7) For the purposes of this section and section 143—

• (a) “non-qualifying individual” has the meaning given by section 136(1);

• (b) occupation of any part of a dwelling is regarded as occupation of the dwelling.

Occupation by certain employees or partners

145

• (1) A day in a chargeable period is a relievable if matters stand as follows on that day—

• (a) a person (“P”) is entitled to a single-dwelling interest,

• (b) P, or a relevant group member, carries on a qualifying trade or qualifying property rental business ,

• (c) the interest is held for the purpose of making the dwelling available to one or more qualifying employees or qualifying partners for use as living accommodation, and

• (d) the dwelling is, or is to be, made available as mentioned in paragraph (c) for purposes that are solely or mainly purposes of the qualifying trade or qualifying property rental business .

• (2) “Qualifying trade” means a trade that is carried on on a commercial basis and with a view to profit.

• (3) In this section 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 such an individual as their family.

• (4) Where P is a company, “a relevant group member” means a company which is a member of the same group as P for the purposes mentioned in paragraph 1(2) of Schedule 7 to FA 2003 (stamp duty land tax: group relief).

• (5) For the meaning of “qualifying property rental business” see section 133(3).

Meaning of “qualifying employee” and “qualifying partner” in section 145

146

• (1) In a case where the person carrying on the trade or property rental business mentioned in section 145(1)(b) carries it on in partnership with one or more other persons, “qualifying partner” means any individual who is a member of the partnership, except one who is entitled to a 10% or greater share—

• (a) in the income profits of the partnership, or

• (b) in any company that is entitled to the single-dwelling interest mentioned in section 145(1)(a), or

• (c) in the partnership's assets.

• (2) “Qualifying employee” means any individual employed for the purposes of the qualifying trade or qualifying property rental business , except one who—

• (a) is entitled to a 10% or greater share—

• (i) in the income profits of the trade or (as the case may be) property rental business , or

• (ii) in any company that is entitled to the single-dwelling interest mentioned in section 145(1)(a), or

• (iii) in that single-dwelling interest, or

• (b) provides excluded domestic services.

• (3) The reference in subsection (2)(b) to an individual who provides 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 a non-qualifying individual, of the dwelling mentioned in section 145(1)(c) (“the relevant dwelling”), or a linked dwelling.

• (4) In subsection (3) “non-qualifying individual” means an individual connected with a person who is entitled to the single-dwelling interest.

• (5) The following are “linked” dwellings for the purposes of subsection (3)—

• (a) if the conditions in section 116(2) 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).

• (6) In this section references to employment include the holding of an office.

• (7) For the purposes of subsections (1)(c) and (2)(a)(iii) 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.

Meaning of “10% or greater share in a company”

147

• (1) This section applies for the purposes of section 146.

• (2) An individual (“P”) is taken to be entitled to a 10% or greater share in a company (“C”) if P possesses (directly or indirectly) or is entitled to acquire—

• (a) 10% or more of the share capital of C,

• (b) 10% or more of the issued share capital of C,

• (c) 10% or more of the voting power in C,

• (d) so much of the issued share capital of C as would, on the assumption that the whole of the income of C were distributed among the participators, entitle P to receive 10% or more of the amount so distributed, or

• (e) such rights as would entitle P, in the event of the winding up of C or in any other circumstances, to receive 10% or more of the assets of C which would then be available for distribution among the participators.

• (3) Any rights that P or any other person has as a loan creditor are to be disregarded for the purposes of the assumption in subsection (2)(d).

• (4) For the purposes of subsection (2) a person is treated as entitled to acquire anything which the person—

• (a) is entitled to acquire at a future date, or

• (b) will at a future date be entitled to acquire.

• (5) If a person—

• (a) possesses any rights or powers on behalf of another person (“A”), or

• (b) may be required to exercise any rights or powers on A's direction or behalf,

those rights or powers are to be attributed to A.

• (6) The following are also to be attributed to a person—

• (a) the rights and powers of any company of which the person has, or the person and associates of the person have, control;

• (b) the rights and powers of any two or more companies within paragraph (a);

• (c) the rights and powers of any associate of the person (or of any two or more associates of the person).

• (7) The rights and powers which are to be attributed under subsection (6)—

• (a) include those attributed to a company or associate under subsection (5), but

• (b) do not include those attributed to an associate under subsection (6).

• (8) A person who does not meet the conditions in subsection (2) is nevertheless treated as having a 10% or greater share in a company if the person exercises, is able to exercise or is entitled to acquire, direct or indirect control over the company's affairs.

• (9) In this section—

• “associate” has the same meaning as in Part 10 of CTA 2010 (see section 448 of that Act); but for this purpose section 448 is to be read as if the words “or partner” were omitted in subsection (1)(a);

• “control” has the same meaning as in that Part (see section 450 of that Act);

• “loan creditor” has the same meaning as in that Part (see section 453 of that Act);

• “participator” has the same meaning as in that Part (see section 454 of that Act).

Farmhouses

148

• (1) This section applies where on a day in a chargeable period—

• (a) a dwelling (“the farmhouse”) forms part of land occupied for the purposes of a qualifying trade of farming, and

• (b) a person carrying on the trade is entitled to, or connected with a person who is entitled to, a single-dwelling interest in the farmhouse.

• (2) That day is relievable in relation to the single-dwelling interest if on that day the farmhouse is occupied—

• (a) by a farm worker who occupies it for the purposes of the trade, or

• (b) by a former long-serving farm worker, or the surviving spouse or civil partner of a former farm worker.

• (3) A trade of farming is a “qualifying trade of farming” only if it is carried on—

• (a) on a commercial basis, and

• (b) with a view to profit.

• (4) In this section—

• “farming” has the same meaning as in the Corporation Tax Acts (see section 1125 of CTA 2010), except that in this section “farming” includes market gardening;

• “market gardening” has the same meaning as in the Corporation Tax Acts (see section 1125(5) of CTA 2010).

“Farm worker” and “former long-serving farm worker”

149

• (1) An individual is a “farm worker” in relation to the qualifying trade of farming mentioned in section 148(1) at any time when the individual has a substantial involvement in—

• (a) the day-to-day work of the trade, or

• (b) the direction and control of the conduct of the trade.

• (2) Where section 148 applies, an individual occupying the farmhouse on the day mentioned in section 148(1) is a “former long-serving farm worker” if the individual had, before that day, been a farm worker in relation to the qualifying trade of farming for—

• (a) a qualifying period of 3 or more years, or

• (b) qualifying periods together amounting to 3 or more years within a 5 year period.

• (3) In subsection (2) “qualifying period” means a period throughout which—

• (a) the individual occupied the farmhouse for the purposes of the trade,

• (b) the land of which the farmhouse forms part was occupied for the purposes of the trade,

• (c) the trade was carried on by—

• (i) a person who is entitled to the single-dwelling interest in the farmhouse on the day mentioned in section 148(1), or

• (ii) a person connected with such a person, and

• (d) a person who is entitled to the single-dwelling interest in the farmhouse on the day mentioned in section 148(1) was entitled to that interest.

• (4) A person occupying part of a dwelling is regarded as occupying the dwelling for the purposes of this section and section 148.

Providers of social housing

150

• (1) A day in a chargeable period is relievable in relation to a single-dwelling interest if on that day—

• (a) a profit-making registered provider of social housing (P) is entitled to the interest, and

• (b) P's acquisition of the interest (or of any part of the interest) was funded with the assistance of public subsidy.

• (2) A day in a chargeable period is relievable in relation to a single-dwelling interest if on that day—

• (a) a qualifying housing provider ... is entitled to the interest, and

• (b) the condition in subsection (3) is met.

• (3) The condition mentioned in subsection (2) is that—

• (a) the qualifying housing provider is controlled by its tenants,

• (b) the person from whom the qualifying housing provider acquired the interest (or any part of the interest) is a qualifying body, or

• (c) the qualifying housing provider's acquisition of the interest (or of any part of the interest) was funded with the assistance of a public subsidy.

• (3A) A day in a chargeable period is relievable in relation to a single-dwelling interest if on that day a qualifying housing co-operative (as defined by section 150A) is entitled to the interest.

• (4) In this section—

• (a) subsection (2) of section 71 of FA 2003 applies in relation to a reference to a qualifying housing provider controlled by its tenants as it applies to a reference in that section to a non-profit registered provider of social housing controlled by its tenants;

• (b) “qualifying body” means—

• (i) anything described as a qualifying body in subsection (3) of that section,

• (ii) the Scottish Ministers,

• (iii) a council constituted under section 2 of the Local Government etc. (Scotland) Act 1994, or

• (iv) Scottish Homes;

• (c) “public subsidy” means—

• (i) anything that is a public subsidy for the purposes of section 71 of FA 2003, and for the purposes of this section the reference in subsection (5)(a) of that section to “the purchaser” is to be treated as a reference to P or the qualifying housing provider (as the case may be);