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

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(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

(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

(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.

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,

(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);

(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,

(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.

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;

(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);

(ii) any grant or other financial assistance under section 18 of the Housing Act 1996 (c. 52) (social housing grants);

(iii) any grant or other financial assistance under section 2 of the Housing (Scotland) Act 1988 (c. 43) (general functions of the Scottish Ministers);

(d) “qualifying housing provider” means—

(i) a relevant housing provider (within the meaning of section 71 of FA 2003),

(ii) a body registered as a social landlord in a register maintained under section 1(1) of the Housing Act 1996 (Welsh registered social landlords), or

(iii) a body registered under section 20(1) of the Housing (Scotland) Act 2010 (asp 17) (Scottish registered social landlords).

Exemptions

Charitable companies

151

(1) A charitable company that is entitled to a single-dwelling interest is regarded as not meeting the ownership condition with respect to the interest on any day on which the interest is held by the company for qualifying charitable purposes, other than an excluded day.

(2) The interest is “held for qualifying charitable purposes” if it is held—

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

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

(3) A day is an “excluded day” if the following conditions are met—

(a) a person (“the donor”) has on or before that day made, or agreed to make, a gift to the charitable company or to a charity that is connected with it,

(b) there exist on that day arrangements under which or as a result of which a linked individual is permitted, or is to be or may in the future be permitted, to occupy the dwelling, and

(i) the likely effects of the gift and the arrangements, or

(ii) the circumstances in which the gift was made and the circumstances in which the arrangements were entered into,

that the gift would not have been made and the arrangements would not have been entered into independently of one another;

but see the exception in subsection (5).

(4) In subsection (3)(b) “linked individual” means an individual who—

(a) is the donor, or

(b) was, when the arrangements were entered into, an associate of the donor.

(5) A day is not an “excluded day” if the first, second or third condition is met on that day.

The first condition is that the activities undertaken for carrying out the primary purposes of the charitable company include, or normally include, opening the dwelling to the public.

The second condition is that the dwelling is being exploited through commercial activities that involve, or normally involve, opening the dwelling to the public.

The third condition is that steps are being taken—to secure that the first or second condition will be met without undue delay, orto secure that the single-dwelling interest will be sold without undue delay.

(6) In subsection (5)—

(a) “opening the dwelling to the public” means offering the public the opportunity to make use of, stay in or otherwise enjoy, on at least 28 days in any year, areas that constitute a significant part of the interior of the dwelling or of the dwelling's garden or grounds;

(b) “without undue delay” means without delay, except so far as delay is justified by commercial considerations or for the sake of a primary purpose of the charitable company.

(7) For the purposes of subsection (6)(a), the size (relative to the size of the whole dwelling or of the whole garden or grounds), nature, and function of the areas concerned are to be taken into account in determining whether they form a significant part of the interior of the dwelling or (as the case may be) of the garden or grounds.

(8) For the purposes of subsection (3)(a)—

(a) “connected” means connected in a matter relating to the structure, administration or control of the charitable company, and

(b) section 172 does not apply.

Section 151: supplementary

152

(1) In section 151 “associate”, in relation to the donor, means any of the following—

(a) an individual (“a connected person”) who is connected with the donor,

(b) an individual who is the settlor in relation to a settlement of which a trustee is (in the capacity of trustee) connected with the donor,

(d) 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,

(e) a relative of the spouse or civil partner of a connected person or of a relevant settlor, or

(f) the spouse or civil partner of a person falling within paragraph (e).

(2) In subsection (1)—

“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).

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

(4) For the purposes of section 151 occupation of any part of a dwelling is regarded as occupation of the dwelling.

(5) For the purposes of section 151(3)—

(a) the making of a gift is disregarded if it is made before the day on which this Act is passed, and

(b) an agreement to make a gift is disregarded if the agreement is made before that day.

(6) Arrangements entered into before the day on which this Act is passed are disregarded for the purposes of section 151(3) unless a material alteration has been made to them on or after that date.

“Material alteration” means an alteration affecting anything in the arrangements that relates to the individual's having (at any time), or potentially having, permission to occupy the dwelling.

(7) References in section 151 and this section to a gift include the disposal of an asset for consideration of an amount or value which is less than the market value of the asset.

(8) In section 151 and this section “arrangements” includes any scheme, arrangement or understanding of any kind, whether or not legally enforceable, involving a single transaction or two or more transactions.

Public bodies

153

(1) A public body is not regarded as a company for the purposes of this Part.

(2) In this section—

(a) “public body” means any body corporate that is a public body for the purposes of section 66 of FA 2003, and

(b) references to a public body accordingly include a company such as is mentioned in subsection (5) of that section (companies wholly owned by the listed bodies).

(3) The power of the Treasury to prescribe persons by an order under section 66(4) of FA 2003 may be exercised so as to make different provision for purposes relating to annual tax on enveloped dwellings and stamp duty land tax.

(4) In paragraph (b) of subsection (2) “company” means a company as defined by section 1 of the Companies Act 2006 (and subsection (1) is to be ignored in interpreting that paragraph).

Bodies established for national purposes

154

(1) A body listed in subsection (2) is not regarded as a company for the purposes of this Part.

(2) The bodies are—

the Historic Buildings and Monuments Commission for England;

the Trustees of the British Museum;

the Trustees of the National Heritage Memorial Fund;

the Trustees of the Natural History Museum.

Dwelling conditionally exempt from inheritance tax

155

(1) Subsection (2) applies to a single-dwelling interest if—

(a) the whole or part of the dwelling has been designated under section 31 of IHTA 1984 (buildings of outstanding historic or architectural interest etc),

(b) an undertaking has been made with respect to the dwelling under section 30 of that Act (conditionally exempt transfers), and

(2) The taxable value of the single-dwelling interest on any day is taken to be zero if no chargeable event has occurred with respect to the dwelling in the time between the transfer of value and the beginning of that day.

(3) Subsection (4) applies to a single-dwelling interest if—

(a) the whole or part of the dwelling has been designated under section 31 of IHTA 1984,

(b) an undertaking has been made with respect to the dwelling under section 78 of that Act (settled property: conditionally exempt occasions), and

(c) a transfer of property or other event is a conditionally exempt occasion by virtue of that designation and that undertaking.

(4) The taxable value of the single-dwelling interest on any day is taken to be zero if no chargeable event has occurred with respect to the dwelling in the time between the conditionally exempt occasion and the beginning of that day.

(5) In this section—

“chargeable event” means an event which is a chargeable event under section 32 of IHTA 1984;

“conditionally exempt occasion” is to be read in accordance with section 78(2) of that Act;

“transfer of value” has the same meaning as in that Act.

Power to modify reliefs

Modification of reliefs

156

(1) The Treasury may by regulations—

(a) amend this Part for the purpose of providing further relief, or further exemptions, from tax (whether by modifying an existing relief or exemption or otherwise);

(b) amend or repeal any of sections 132 to 155 for purposes not falling within paragraph (a);

(c) make any amendment of any other provision of this Part that may be necessary in consequence of provision under paragraph (b).

(2) In subsection (1)—

(a) the reference to providing further relief from tax includes the provision of relief for additional persons or categories of person or in additional cases or circumstances;

(b) the reference to providing further exemptions from tax includes the provision of exemptions for additional persons or categories of person or in additional cases or circumstances.

Alternative property finance

Land sold to financial institution and leased to person

157

(1) This section applies where—

(a) section 71A of FA 2003 (land sold to financial institution and leased to person) ... applies in relation to arrangements entered into between a financial institution and another person (“the lessee”), and

(b) the land in which the institution purchases a major interest under the first transaction is in England ... or Northern Ireland and consists of or includes one or more dwellings (or parts of a dwelling).

(2) This Part has effect in relation to times when the arrangements are in operation as if—

(a) the interest held by the financial institution as mentioned in subsection (3)(b) were held by the lessee (and not by the financial institution), and

(b) the lease or sub-lease granted under the second transaction had not been granted.

(3) The reference in subsection (2) to times when the arrangements are in operation is to times when—

(a) the lessee holds the leasehold interest granted to it under the second transaction, and

(b) the interest purchased under the first transaction (or that interest except so far as transferred by a further transaction) is held by a financial institution.

(4) A company or individual treated under subsection (2)(a) as holding an interest at a particular time is treated as holding it as a member of a partnership if at the time in question the company or individual holds the leasehold interest as a member of the partnership (and this Part has effect accordingly in relation to the other members of the partnership).

(5) In relation to times when the arrangements operate for the benefit of a collective investment scheme, this Part has effect as if—

(a) the interest held by the financial institution as mentioned in subsection (6)(b) were held by the lessee for the purposes of a collective investment scheme (and were not held by the financial institution), and

(b) the lease or sub-lease granted under the second transaction had not been granted.

(6) The reference in subsection (5) to times when the arrangements operate for the benefit of a collective investment scheme is to times when—

(a) the lessee holds the leasehold interest for the purposes of a collective investment scheme, and

(b) the interest purchased under the first transaction (or that interest except so far as transferred by a further transaction) is held by a financial institution.

(7) In this section—

“financial institution” has the meaning given by section 73BA of FA 2003;

“the first transaction” has the same meaning as in section 71A ... of FA 2003;

“further transaction” has the same meaning as in section 71A of FA 2003;

“the leasehold interest” means the interest granted to the lessee under the second transaction;

“the second transaction” has the same meaning as in section 71A ... of FA 2003.

(8) The reference in subsection (1) to a major interest in land is to be read in accordance with section 117 of FA 2003.

(9) Where the lessee is an individual, references in subsections (2), (3), (5) and (6) to the lessee are to be read, in relation to times after the death of the lessee, as references to the lessee's personal representatives.

(10) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Administration and payment of tax

Responsibility for collection and management

158

The Commissioners for Her Majesty's Revenue and Customs are responsible for the collection and management of annual tax on enveloped dwellings.

Annual tax on enveloped dwellings return

159

(1) Where tax is charged on a person for a chargeable period with respect to a single-dwelling interest the person must deliver a return for the period with respect to the interest.

(2) A return under subsection (1) must be delivered by the end of the period of 30 days beginning with first day in the period on which the person is within the charge with respect to the interest.

(3) If the first day in the chargeable period on which the person is within the charge with respect to the interest (“day 1”) is a valuation date only because of section 124 (new dwellings) or section 125 (dwellings produced from other dwellings)—

(a) subsection (2) does not apply, and

(b) the return must be delivered by the end of the period of 90 days beginning with day 1.

(3A) Where a person—

(a) would (apart from this subsection) be required in accordance with subsection (2) to deliver a return for a chargeable period (“the later period”) by 30 April in that period, and

(b) is also required in accordance with subsection (3) to deliver a return for the previous chargeable period by a date (“the later date”) which is later than 30 April in the later period,

subsection (2) has effect as if it required the return mentioned in paragraph (a) to be delivered by the later date.

(4) A return under this section must be delivered to an officer of Revenue and Customs, and is called an “annual tax on enveloped dwellings return”.

Return of adjusted chargeable amount

160

(1) A person on whom tax is charged for a chargeable period with respect to a single-dwelling interest must deliver a further return for the period with respect to the interest if the first or second condition is met.

(2) The return must be delivered by the end of the period of 30 days beginning with the first day of the period following the period for which the tax is charged (but see subsection (3)).

(3) If the return is required because the second condition is met and the adjusted chargeable amount is affected by an event that has occurred after the end of the chargeable period mentioned in subsection (1), the return must be delivered by the end of the period of 30 days beginning with the day on which that event occurred.

(4) The first condition is that—

(a) the person has not made a claim under section 100 (interim relief) with respect to the interest for the chargeable period, and

(b) the adjusted chargeable amount is greater than the amount charged under section 99 with respect to the single-dwelling interest for the period.

(5) The second condition is that—

(a) the person has made one or more claims under section 100 with respect to the interest for the chargeable period, and

(b) the sum of amounts A and B, as calculated under that section, in connection with the last of those claims is less than the adjusted chargeable amount.

(6) A return under this section must be delivered to an officer of Revenue and Customs, and is called a “return of the adjusted chargeable amount”.

Return to include self assessment

161

(1) A return must include a self assessment.

(2) In subsection (1) “return” means—

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

(b) a return of the adjusted chargeable amount.

(2A) The reference in subsection (2)(a) to an annual tax on enveloped dwellings return does not include a relief declaration return.

(3) In the case of an annual tax on enveloped dwellings return, “self assessment” means an assessment of—

(a) the amount of tax to which the person is chargeable under section 99 for the period in respect of the interest, and

(b) if the return includes a claim under section 100 (interim relief), the tax payable after the relief.

(4) In the case of a return of the adjusted chargeable amount, “self assessment” means an assessment of—

(a) the adjusted chargeable amount, and

(b) the additional tax payable in accordance with section 163(2).

(5) A self assessment must include a statement of the amount taken to be the market value of the interest on each valuation date (earlier than the date on which the return is delivered) that is relevant for the purposes of the assessment.

Returns, enquiries, assessments and other administrative matters

162

(1) Schedule 33 contains provision about returns, enquiries and related matters.

(2) The Treasury may by regulations—

(a) make any amendments of Schedule 33 that they may at any time think appropriate;

(b) make any amendment of any other provision of this Part that may be necessary in consequence of provision under paragraph (a).

Payment of tax

163

(1) Tax charged on a person under section 99 for a chargeable period with respect to a single-dwelling interest must be paid not later than the filing date for the annual tax on enveloped dwellings return required to be made for the period with respect to the interest.

(2) So far as a chargeable person's adjusted chargeable amount for a chargeable period with respect to a single-dwelling interest exceeds the amount payable under subsection (1) (as modified, where applicable, by section 100(3)), the amount of the difference must be paid not later than the filing date for the return of the adjusted chargeable amount under section 160.

(3) Tax payable as a result of the amendment of a return must be paid—

(a) immediately, or

(b) if the amendment is made on or before the filing date for the return, not later than that date.

(4) In subsection (3) “return” means—

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

(b) a return of the adjusted chargeable amount.

(5) Tax payable in accordance with a determination or assessment by an officer of Revenue and Customs must be paid within the period of 30 days beginning with the day on which the determination or assessment is issued.

Information and enforcement

164

In Schedule 34—

(a) Part 1 contains provision about information and inspection powers, and

(b) Part 2 contains provision about penalties.

Collection and recovery of tax etc

165

(1) Schedule 12 to FA 2003 (stamp duty land tax: collection and recovery of tax) has effect in relation to the collection and recovery of tax under this Part as it has effect in relation to stamp duty land tax.

(2) The reference in subsection (1) to tax under this Part includes any unpaid penalty or interest under this Part.

Application of provisions

Companies

166

(1) In this Part “company” means a body corporate but does not include—

(a) a corporation sole, or

(b) any partnership (see section 167(1)).

(2) Everything to be done by a company under this Part must be done by the company acting through—

(a) the proper officer of the company, or

(b) another person who has the express, implied or apparent authority of the company to act on its behalf for the purpose.

(3) Service of a document on a company under this Part may be effected by serving the document on the proper officer.

(4) Tax due from any company that is incorporated under the law of a country or territory outside the United Kingdom may be recovered from the proper officer of the company (as well as by any means available in the absence of this subsection).

(5) The proper officer—

(a) may retain, out of any money that may come into the officer's hands on the company's behalf, enough money to pay that tax, and

(b) is entitled to be fully reimbursed by the company (whether by that method or another) for amounts recovered from the officer under subsection (4).

(6) For the purposes of this section the proper officer of a company is—

(a) the secretary, or a person acting as secretary, of the company, or

(b) if the company does not have a proper officer within paragraph (a), the treasurer, or a person acting as treasurer, of the company.

(7) If a liquidator has been appointed for the company—

(a) subsections (2)(b) and (6) do not apply, and

(b) the liquidator is the proper officer of the company.

(8) If an administrator has been appointed for the company—

(a) subsection (6) does not apply, and

(b) the administrator is the proper officer of the company.

(9) If two or more persons are appointed to act jointly or concurrently as the administrator of the company, the proper officer of the company is—

(a) whichever of those persons is specified in a notice given by the administrators to an officer of Revenue and Customs for the purposes of this section, or

(b) if no notice is given under paragraph (a), whichever of those persons is designated by an officer of Revenue and Customs as the proper officer for those purposes.

(10) See also section 153 (public bodies) and section 154 (bodies established for national purposes).

Partnerships

167

(1) In this Part “partnership” means—

(a) a partnership within the Partnerships Act 1890,

(b) a limited partnership registered under the Limited Partnerships Act 1907,

(c) a limited liability partnership formed under the Limited Liability Partnerships Act 2000 or the Limited Liability Partnerships Act (Northern Ireland) 2002, or

(d) a firm or entity of a similar character to any of those mentioned in paragraphs (a) to (c) formed under the law of a country or territory outside the United Kingdom.

(2) This Part has effect as follows in relation to a partnership (for instance, a limited liability partnership formed as mentioned in subsection (1)(c)) that is itself capable of being entitled to, or of acquiring or disposing of, a chargeable interest—

(a) transactions entered into on behalf of the partnership are treated as entered into by or on behalf of the partners;

(b) where the partnership is entitled to a single-dwelling interest, this Part has effect as if the partners were jointly entitled to the interest (and the partnership had no entitlement to it).

(3) For the purposes of this Part a partnership is treated as the same partnership despite a change in membership if any person who was a member before the change remains a member after the change.

(4) For the purposes of this Part—

(a) a collective investment scheme is not regarded as a partnership, and

(b) accordingly, a member of a partnership by or on whose behalf a single-dwelling interest is held for the purposes of a collective investment scheme is not regarded as entitled to the interest as a member of the partnership.

(5) Anything required or authorised by this Part to be done by or in relation to the responsible partners for a partnership may instead be done by or in relation to any representative partner or partners.

(6) A representative partner means a partner nominated by a majority of the partners to act as the representative of the partnership for the purposes of this Part of this Act.

(7) Any such nomination, or the revocation of such a nomination, has effect only after notice of the nomination, or revocation, has been given to an officer of Revenue and Customs.

Supplementary provisions

Miscellaneous amendments and transitory provision

168

Schedule 35 contains—

(a) miscellaneous amendments, and

(b) provision about the chargeable period beginning on 1 April 2013.

Orders and regulations

169

(1) Orders and regulations under this Part are to be made by statutory instrument.

(2) A statutory instrument containing an order or regulations made under this Part is subject to annulment in pursuance of a resolution of the House of Commons.

(3) Subsection (2) does not apply to—

(a) an instrument containing only an order under section 101(5), or

(b) an instrument to which subsection (4) applies.

(4) A statutory instrument containing (whether alone or with other provision) provision made under section 156(1) or 162(2) may not be made unless a draft of the instrument has been laid before and approved by a resolution of the House of Commons.

(5) An order or regulations under this Part—

(a) may make different provision for different purposes,

(b) may include consequential or transitional provisions or savings.

Interpretation

Meaning of “chargeable day” and “within the charge”

170

(1) Any day on which the conditions in section 94(2) are met with respect to a single-dwelling interest is a “chargeable day” for that interest.

(2) Where a day is a chargeable day as a result of subsection (1), the chargeable person is “within the charge” with respect to a single-dwelling interest on that day.

References to the state of affairs “on” a day

171

In determining for the purposes of any provision of this Part whether or not a state of affairs obtains on a particular day, it is to be assumed that the state of affairs obtaining at the end of the day persisted throughout the day.

Connected persons

172

(1) Section 1122 of the Corporation Tax Act 2010 (connected persons) has effect for the purposes of this Part (except where otherwise stated).

(2) For the purposes of this Part a person is taken to be connected with a collective investment scheme if the person is a participant in the scheme who—

(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.

(3) The reference in subsection (2) to a collective investment scheme does not include a unit trust scheme; but see section 1123(2) of CTA 2010 (provision about the application of rules about connected persons to unit trust schemes).

(4) The reference in subsection (2)(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.

(5) For the purposes of subsection (2) a person is taken to have any rights and powers that the person—

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

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

(6) For the purposes of subsection (2) the rights and powers of any associate of a person (or of any two or more associates of a person) are to be attributed to the person.

(7) 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).

Connected persons: cell companies

173

(1) For the purposes of this Part a person is to be treated as connected to a cell company where, if any cell of the company were a separate company, the person would be connected to that separate company.

(2) For the purposes of this section a company is a “cell company” if it meets the first or second condition.

(3) The first condition is that under the law under which the company is incorporated or formed, under the company's articles of association or other document regulating the company or under arrangements entered into by or in relation to the company—

(a) some or all of the assets of the company are available primarily, or only, to meet particular liabilities of the company, and

(b) some or all of the members of the company, and some or all of its creditors, have rights primarily, or only, in relation to particular assets of the company.

(4) The second condition is that the company's articles of association, or other document regulating it, establish an entity (by whatever name known) which—

(a) under the law under which the company is incorporated or formed, has legal personality distinct from that of the company, and

(b) which is not itself a company.

(5) For the purposes of this section a “cell”, in relation to a cell company, is—

(a) an identifiable part of the company (by whatever name known) that carries on distinct business activities and to which particular assets and liabilities of the company are primarily or wholly attributable, or

(b) an entity of the kind specified in subsection (4).

General interpretation of Part 3

174

(1) In this Part—

“chargeable day” (in relation to a single-dwelling interest) is to be read in accordance with section 170;

“chargeable interest” has the meaning given by section 107;

“the chargeable person” has the meaning given by section 96(2) or (3);

“closure notice” has the meaning given by paragraph 16 of Schedule 33;

“collective investment scheme” has the same meaning as in Part 17 of the Financial Services and Markets Act 2000 (see section 235 of that Act);

“company” has the meaning given by section 166(1);

“completion”, in Scotland, means—in relation to a lease, when it is executed by the parties (that is to say, by signing) or constituted by any means,in relation to any other transaction, the settlement of the transaction;

“discovery assessment” has the meaning given by paragraph 21 of Schedule 33;

“EEAUCITS” has the same meaning as in Part 17 of the Financial Services and Markets Act 2000 (see section 237 of that Act);

“excluded rents” has the meaning given by section 133(6);

“farming” has the meaning given by section 148(4);

“filing date”, in relation to an annual tax on enveloped dwellings return or a return of the adjusted chargeable amount, has the meaning given by paragraph 58 of Schedule 33;

“financial institution” has the meaning given by section 143 (except where otherwise stated);

“HMRC” means Her Majesty's Revenue and Customs;

“HMRC determination” has the meaning given by paragraph 18 of Schedule 33;

“jointly entitled” means—in England and Wales, beneficially entitled as joint tenants or tenants in common,in Scotland, entitled as joint owners or owners in common,in Northern Ireland, beneficially entitled as joint tenants, tenants in common or coparceners;

“land” includes—buildings and structures, andland covered by water;

“market value” has the meaning given by section 98(8);

“notice of enquiry” has the meaning given by paragraph 8 of Schedule 33;

“open-ended investment company” has the same meaning as in Part 17 of the Financial Services and Markets Act 2000 (see section 236(1) of that Act);

“participant”, in relation to a collective investment scheme, has the meaning given by section 98(7);

“partnership” has the meaning given by section 167;

“property development trade” has the meaning given by section 138(4);

“property rental business” has the meaning given by section 133(4);

“property trading business” has the meaning given by section 141(3);

“qualifying property rental business” has the meaning given by section 133(3);

“self assessment” has the meaning given by section 161(3);

“tax” means tax under this Part;

“trade” has the same meaning as in section 35 of CTA 2009 (and cognate expressions are to be read accordingly);

“unit trust scheme” has the same meaning as in Part 17 of the Financial Services and Markets Act 2000 (see section 237(1) of that Act).

(2) In this Part—

references to the “adjusted chargeable amount”, in relation to a person on whom tax is charged for a chargeable period with respect to a single-dwelling interest, are to be read in accordance with section 105;

references to an “annual tax on enveloped dwellings return” are to be read in accordance with section 159(4);

references to the “daily amount” for a day are to be read in accordance with section 105(2);

references to “delivery”, in relation to an annual tax on enveloped dwellings return, are to be read in accordance with paragraph 2 of Schedule 33;

references to the “effective date” of an acquisition are to be read in accordance with section 121(4);

references to the “effective date” of a disposal are to be read in accordance with section 121(5);

references to a “major interest” in land are to be read in accordance with section 117 of FA 2003;

references to the “management company”, in relation to an EEA UCITS, are to be read in accordance with Article 2.1(b) of the Directive 2009/65/EC of the European Parliament and of the Council of 13 July 2009 on the coordination of laws, regulations and administrative provisions relating to undertakings for collective investment in transferable securities;

references to a “return of the adjusted chargeable amount” are to be read in accordance with section 160(6);

references to meeting the “ownership condition” are to be read in accordance with section 94(4) to (6);

references to being “within the charge” with respect to a single-dwelling interest are to be read in accordance with section 170.

PART 4 — Excise duties and other taxes

Inheritance tax

Open- ended investment companies and authorised unit trusts

175

(1) In section 65 of IHTA 1984 (settlements without interests in possession etc: charge when property ceases to be relevant property etc), after subsection (7) insert—

(7A) Tax shall not be charged under this section by reason only that property comprised in a settlement becomes excluded property by virtue of section 48(3A)(a) (holding in an authorised unit trust or a share in an open-ended investment company is excluded property unless settlor domiciled in UK when settlement made).

(2) The amendment made by this section is treated as having come into force on 16 October 2002.

Treatment of liabilities for inheritance tax purposes

176

Schedule 36 makes provision in relation to the treatment of liabilities for the purposes of inheritance tax.

Election to be treated as domiciled in United Kingdom

177

(1) IHTA 1984 is amended as follows.

(2) In section 267 (persons treated as domiciled in United Kingdom), at the end insert—

(5) In determining for the purposes of this section whether a person is, or at any time was, domiciled in the United Kingdom, sections 267ZA and 267ZB are to be ignored.

(3) After that section insert—

(267ZA) (1) A person may, if condition A or B is met, elect to be treated for the purposes of this Act as domiciled in the United Kingdom (and not elsewhere). (2) A person's personal representatives may, if condition B is met, elect for the person to be treated for the purposes of this Act as domiciled in the United Kingdom (and not elsewhere). (3) Condition A is that, at any time on or after 6 April 2013 and during the period of 7 years ending with the date on which the election is made, the person had a spouse or civil partner who was domiciled in the United Kingdom. (4) Condition B is that a person (“the deceased”) dies and, at any time on or after 6 April 2013 and within the period of 7 years ending with the date of death, the deceased was— (a) domiciled in the United Kingdom, and (b) the spouse or civil partner of the person who would, by virtue of the election, be treated as domiciled in the United Kingdom. (5) An election under this section does not affect a person's domicile for the purposes of section 6(2) or (3) or 48(4). (6) An election under this section is to be ignored— (a) in interpreting any such provision as is mentioned in section 158(6), and (b) in determining the effect of any qualifying double taxation relief arrangements in relation to a transfer of value by the person making the election. (7) For the purposes of subsection (6)(b) a qualifying double taxation relief arrangement is an arrangement which is specified in an Order in Council made under section 158 before the coming into force of this section (other than by way of amendment by an Order made on or after the coming into force of this section). (8) In determining for the purposes of this section whether a person making an election under this section is or was domiciled in the United Kingdom, section 267 is to be ignored. (267ZB) (1) For the purposes of this section— (a) references to a lifetime election are to an election made by virtue of section 267ZA(3), and (b) references to a death election are to an election made by virtue of section 267ZA(4). (2) A lifetime or death election is to be made by notice in writing to HMRC. (3) A lifetime or death election is treated as having taken effect on a date specified, in accordance with subsection (4), in the notice. (4) The date specified in a notice under subsection (3) must— (a) be 6 April 2013 or a later date, (b) be within the period of 7 years ending with— (i) in the case of a lifetime election, the date on which the election is made, or (ii) in the case of a death election, the date of the deceased's death, and (c) meet the condition in subsection (5). (5) The condition in this subsection is met by a date if, on the date— (a) in the case of a lifetime election— (i) the person making the election was married to, or in a civil partnership with, the spouse or civil partner, and (ii) the spouse or civil partner was domiciled in the United Kingdom, or (b) in the case of a death election— (i) the person who is, by virtue of the election, to be treated as domiciled in the United Kingdom was married to, or in a civil partnership with, the deceased, and (ii) the deceased was domiciled in the United Kingdom. (6) A death election may only be made within 2 years of the death of the deceased or such longer period as an officer of Revenue and Customs may in the particular case allow. (7) Subsection (8) applies if— (a) a lifetime or death election is made, (b) a disposition is made, or another event occurs, during the period beginning with the time when the election is treated by virtue of subsection (3) as having taken effect and ending at the time when the election is made, and (c) the effect of the election being treated as having taken effect at that time is that the disposition or event gives rise to a transfer of value. (8) This Act applies with the following modifications in relation to the transfer of value— (a) subsections (1) and (6)(c) of section 216 have effect as if the period specified in subsection (6)(c) of that section were the period of 12 months from the end of the month in which the election is made, and (b) sections 226 and 233 have effect as if the transfer were made at the time when the election is made. (9) A lifetime or death election cannot be revoked. (10) If a person who made an election under section 267ZA(1) is not resident in the United Kingdom for the purposes of income tax for a period of four successive tax years beginning at any time after the election is made, the election ceases to have effect at the end of that period.

Transfer to spouse or civil partner not domiciled in United Kingdom

178

(1) Section 18 of IHTA 1984 (transfers between spouses or civil partners) is amended as follows.

(2) In subsection (2) (transfer to spouse or civil partner not domiciled in United Kingdom), for “£55,000” substitute “ the exemption limit at the time of the transfer, ”.

(3) After subsection (2) insert—

(2A) For the purposes of subsection (2), the exemption limit is the amount shown in the second column of the first row of the Table in Schedule 1 (upper limit of portion of value charged at rate of nil per cent).

(4) The amendments made by this section have effect in relation to transfers of value made on or after 6 April 2013.

Fuel

Fuel duties: rates of duty and rebates from 1 April 2013

179

(1) HODA 1979 is amended as follows.

(2) In section 6(1A) (main rates)—

(a) in paragraph (a) (unleaded petrol), for “£0.6097” substitute “ £0.5795 ”,

(b) in paragraph (aa) (aviation gasoline), for “£0.3966” substitute “ £0.3770 ”,

(c) in paragraph (b) (light oil other than unleaded petrol or aviation gasoline), for “£0.7069” substitute “ £0.6767 ”, and

(d) in paragraph (c) (heavy oil), for “£0.6097” substitute “ £0.5795 ”.

(3) In section 8(3) (road fuel gas)—

(a) in paragraph (a) (natural road fuel gas), for “£0.2907” substitute “ £0.2470 ”, and

(b) in paragraph (b) (other road fuel gas), for “£0.3734” substitute “ £0.3161 ”.

(4) In section 11(1) (rebate on heavy oil)—

(a) in paragraph (a) (fuel oil), for “£0.1126” substitute “ £0.1070 ”, and

(b) in paragraph (b) (gas oil), for “£0.1172” substitute “ £0.1114 ”.

(5) In section 14(1) (rebate on light oil for use as furnace fuel), for “£0.1126” substitute “ £0.1070 ”.

(6) In section 14A(2) (rebate on certain biodiesel), for “£0.1172” substitute “ £0.1114 ”.

(7) The following instruments are revoked—

(a) Excise Duties (Surcharges or Rebates) (Hydrocarbon Oils etc) Order 2012 (S.I. 2012/3055), and

(b) Excise Duties (Road Fuel Gas) (Reliefs) Regulations 2012 (S.I. 2012/3056).

(8) The amendments and revocations made by this section are treated as having come into force on 1 April 2013.

Alcohol

Rates of alcoholic liquor duties

180

(1) ALDA 1979 is amended as follows.

(2) In section 5 (rate of duty on spirits), for “£26.81” substitute “ £28.22 ”.

(3) In section 36(1AA) (rates of general beer duty)—

(a) in paragraph (za) (rate of duty on lower strength beer), for “£9.76” substitute “ £9.17 ”, and

(b) in paragraph (a) (standard rate of duty on beer), for “£19.51” substitute “ £19.12 ”.

(4) In section 37(4) (rate of high strength beer duty), for “£4.88” substitute “ £5.09 ”.

(5) In section 62(1A) (rates of duty on cider)—

(a) in paragraph (a) (rate of duty per hectolitre on sparkling cider of a strength exceeding 5.5 per cent), for “£245.32” substitute “ £258.23 ”,

(b) in paragraph (b) (rate of duty per hectolitre on cider of a strength exceeding 7.5 per cent which is not sparkling cider), for “£56.55” substitute “ £59.52 ”, and

(6) For the table in Schedule 1 substitute—

Table of rates of duty on wine and made-wine

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