Finance Act 2025

No.	Description
1	Profits of a trade carried on wholly outside the United Kingdom (see Chapter 2 of Part 2).
2	A UK resident partner’s share of the profits of a trade carried on by the firm wholly outside the United Kingdom.
3	Profits of an overseas property business.
4	Adjustment income (within the meaning of Chapter 17 of Part 2) in respect of a trade carried on wholly outside the United Kingdom (see that Chapter).
5	Income chargeable under Chapter 2 of Part 4 (interest) that arises from a source outside the United Kingdom.
6	Income chargeable under Chapter 4 of Part 4 (dividends from non-UK resident companies).
7	Income chargeable under Chapter 7 of Part 4 (purchase life annuity payments) that arises from a source outside the United Kingdom.
8	Income chargeable under Chapter 8 of Part 4 (profits from deeply discounted securities) that arises from a source outside the United Kingdom.
9	Income chargeable under section 579 (royalties and other incored.me from intellectual property) that arises from a source outside the United Kingdom.
10	Income chargeable under Chapter 3 of Part 5 (films and sound recordings: non-trading businesses) that arises from a source outside the United Kingdom.
11	Income chargeable under Chapter 4 of Part 5 (certain telecommunication rights: non-trading income) that arises from a source outside the United Kingdom.
12	Income that arises from a source outside the United Kingdom and that is treated as arising to an individual under section 624 or 629 (income arising under settlement attributed to settlor).
13	So much of any amount of income treated as arising to an individual under section 633 (capital sums paid to settlor by trustees of settlement) for the tax year as falls within the foreign amount of income available up to the end of the tax year.
13	The foreign amount of income available up to the end of a tax year is the amount that would be determined, in accordance with sections 635 to 637 (amount of available income), as the amount of income available up to the end of the tax year if all income arising under the settlement from a source in the United Kingdom were ignored.
14	Income treated as arising to an individual under section 643A (benefits paid out of protected income).
15	Income chargeable under section 649 (estate income) that arises from a source outside the United Kingdom.
16	Income chargeable under Chapter 7 of Part 5 (annual payments not otherwise charged) that arises from a source outside the United Kingdom.
17	Income chargeable under Chapter 8 of Part 5 (income not otherwise charged) that arises from a source outside the United Kingdom.
18	Accrued income profits (within the meaning of Part 12 of ITA 2007) made by an individual as a result of a transfer of securities if income from the securities would be qualifying foreign income.
19	Income treated as arising under regulation 17 of the Offshore Funds (Tax) Regulations 2009 (offshore income gains).
20	Income that is treated as arising to an individual under section 721, 728 or 732 of ITA 2007 (transfer of assets abroad: deemed income) and that is “foreign” for the purposes of (respectively) section 726, 730 or 735 of that Act.
21	Pension income that arises from a source outside the United Kingdom (see Part 9 of ITEPA 2003).
22	A benefit to which section 678 of ITEPA 2003 applies (foreign social security benefits).
23	The foreign proportion (see paragraph 46 of Schedule 2 to FA 2022) of income arising as a result of the payment of interest, or the making of a distribution or qualified distribution (within the meaning of paragraph 45(5) of that Schedule), by a QAHC (within the meaning of that Schedule).

(845I) Income is disqualified income if— (a) it is income of a settlement (within the meaning of Chapter 5 of Part 5) arising in the tax year 2024-25 or an earlier tax year that is treated as arising in tax year 2025-26 or a later year as a result of section 648(3) to (5), (b) it is income arising from a security treated as situated in the United Kingdom as a result of section 138ZB of TCGA 1992 (share exchanges involving non-UK incorporated close companies), (c) it is income chargeable to income tax as a result of section 809AZB of ITA 2007 (transferred income streams), (d) it is performance income (see section 845J), (e) it is income from a pension to which section 629 of ITEPA 2003 applies (pre-1973 pensions paid under the Overseas Pensions Act 1973), or (f) it is a payment made to or in respect of— (i) a relieved member of a relevant non-UK scheme (within the meaning of Schedule 34 to FA 2004), or (ii) a transfer member of such a scheme, to which the member payment provisions (within the meaning of that Schedule) apply. (845J) (1) Performance income is any income chargeable to income tax (however that charge arises) that results, directly or indirectly, from the performance of a relevant activity by a performer (whether performed in the United Kingdom or not). (2) “Performer” means any individual who gives performances of entertainment or sport. (3) For the purposes of this section “performances of entertainment or sport” includes any activity of a physical kind performed by an individual (alone or with others) which is or may be made available to the public or any section of the public, whether for payment or not. (4) The following are “relevant activities”— (a) the giving of a performance of entertainment or sport; (b) the participation of the performer in any sound or video recording; (c) any activity in connection with a commercial occasion or event (including the appearance of the performer in connection with the occasion or event). (5) The reference to a commercial occasion or event includes any description of occasion or event— (a) for which any person might receive or become entitled, as a result of anything done by the performer, to receive anything by way of cash or any other form of property; or (b) which is designed to promote commercial sales or activity by advertising, the endorsement of goods or services, sponsorship, or other promotional means of any kind.

• (2) In ITA 2007—

• (a) in section 24 (reliefs deductible at Step 2), in subsection (1)(a)—

• (i) at the end insert—

• section 845A of ITTOIA 2005 (claim for relief for qualifying new residents), and

, and

• (ii) at the end of the entry for section 193(4) of FA 2004, omit the “and”,

• (b) in section 34 (personal allowance and blind person’s allowance) for subsection (3) substitute—

(3) See also— (a) section 809G, in relation to tax years before 2025-26 where a claim for the remittance basis to apply is made, and (b) section 845E of ITTIOA 2005, in relation to tax years from 2025-26 where a foreign income claim, a foreign employment election or a foreign gain claim is made. Those sections provide that where an individual makes such a claim or election for a tax year, the individual is not entitled to any allowance under this Chapter for that tax year.

,

• (c) in section 55A (transferable tax allowance for married couples and civil partners) for subsection (3) substitute—

(3) See also— (a) section 809G, in relation to tax years before 2025-26 where a claim for the remittance basis to apply is made, and (b) section 845E of ITTIOA 2005, in relation to tax years from 2025-26 where a foreign income claim, a foreign employment election or a foreign gain claim is made. Those sections provide that where an individual makes such a claim or election for a tax year, the individual is not entitled to any tax reduction under this Chapter for that tax year.

,

• (d) in section 460 (residence of claimants for relief under section 457 or 458) for subsection (4) substitute—

(4) See also— (a) section 809G, in relation to tax years before 2025-26 where a claim for the remittance basis to apply is made, and (b) section 845E of ITTOIA 2005, in relation to tax years from 2025-26 where a foreign income claim, a foreign employment election or a foreign gain claim is made. Those sections provide that where an individual makes such a claim or election for a tax year, the individual is not entitled to any relief under section 457 or 458 for that tax year.

,

• (e) in section 809EZA (disguised investment management fees: charge to income tax)—

• (i) in subsection (2A), for paragraphs (d) and (e) substitute—

(d) the individual makes a foreign income claim for the relevant tax year.

, and

• (ii) in subsection (2C), for “before the end of the period of non-residence” substitute

in any period— (a) ending immediately before a qualifying tax year in relation to the individual (within the meaning of section 845B(3) of ITTOIA (qualifying new residents)), and (b) that consists only of tax years for which the individual is not UK resident.

, and

• (f) in section 989 (the definitions), at the appropriate places insert—

• “foreign income claim” means a claim under section 845A of ITTOIA 2005

;

• “qualifying new resident” has the meaning it has in Chapter 5 of Part 8 of ITTOIA 2005 (see section 845B of that Act).

• (3) In paragraph 46 of Schedule 2 to FA 2022 (qualifying asset holding companies)—

• (a) in the heading for “applies” substitute “applied or who makes a foreign income claim”,

• (b) in sub-paragraph (1)—

• (i) in the words before paragraph (a), for “This paragraph applies” substitute “Sub-paragraphs (2) and (3) apply”, and

• (ii) in paragraph (a), for “applies” substitute “applied”, and

• (c) after sub-paragraph (6) insert—

(6A) Sub-paragraphs (4) to (6) also apply for the purposes of item 22 in the table in section 845H of ITTOIA 2005 (qualifying foreign income for the purposes of foreign income claim).

• (4) The amendments made by this section have effect for the tax year 2025-26 and subsequent tax years.

Claim for relief on foreign employment income

38

• (1) In Part 2 of ITEPA 2003 (employment income: charge to tax), after Chapter 5B insert—

(41M) (1) This Chapter applies if an individual is a qualifying new resident for a tax year (the “qualifying year”). (2) An individual is a qualifying new resident for a tax year for the purposes of this Chapter if the individual is a qualifying new resident for the tax year for the purposes of Chapter 5 of Part 8 of ITTOIA 2005 (see section 845B of that Act). (3) The individual may make an election for the qualifying year under this section (“a foreign employment election”). (4) Section 41P makes provision about a claim for relief— (a) which an individual can make for the qualifying year or any subsequent tax year, where the individual has made a foreign employment election, and (b) which entitles the individual to relief in that year calculated by reference to employment income that is in respect of the qualifying year. (5) Sections 41Q (amount of relief available) and 41R (limit on relief) set out how to determine the amount of relief to which the individual is entitled. (6) See also— (a) sections 845C to 845E of ITTOIA 2005, which set out some income tax consequences of a foreign employment election, and (b) section 1K of TCGA 1992, which provides for the loss of the individual’s annual exempt amount for capital gains tax where a foreign employment election is made. (7) A foreign employment election must be made in a return. (8) A foreign employment election for the qualifying year must be made before the end of the period of 12 months beginning with 31 January after the end of the qualifying year. (9) A foreign employment election may not be made as a consequential claim (within the meaning of section 43C(5) of TMA 1970) if the circumstances which give rise to the consequential claim result from a loss of tax brought about carelessly or deliberately by the individual or a person acting on the individual’s behalf. (10) For the purposes of this Chapter— (a) “return” means a return under section 8 of TMA 1970 (personal return), (b) references to a claim or election being included in a return include a claim or election being so included as a result of an amendment of the return, and (c) subsections (5) to (7) of section 118 of TMA 1970 (loss of tax brought about carelessly or deliberately) apply as they apply for the purposes of that Act. (41N) (1) This section sets out some definitions that apply for the purposes of this Chapter. (2) “Qualifying employment income” means— (a) qualifying general earnings, (b) qualifying third party income, and (c) qualifying securities income. (3) “Qualifying foreign employment income” means— (a) qualifying foreign general earnings, (b) qualifying foreign third party income, and (c) qualifying foreign securities income. (4) Section 41U defines what it means— (a) for general earnings to be “qualifying general earnings”, and (b) for qualifying general earnings to be “qualifying foreign general earnings”. (5) Section 41V defines what it means— (a) for third party income to be “qualifying third party income”, and (b) for qualifying third party income to be “qualifying foreign third party income”. (6) Section 41W defines what it means— (a) for securities income to be “qualifying securities income”, and (b) for qualifying securities income to be “qualifying foreign securities income”. (41P) (1) Where an individual has made a foreign employment election, the individual may make a claim for relief for the qualifying year or any subsequent tax year (“a foreign employment relief claim”). (2) Where an individual makes a foreign employment relief claim for a tax year, the individual is entitled to relief that is equal to so much of the net taxable employment income for that year as— (a) reflects qualifying foreign employment income (see section 41Q), and (b) is identified as such in the claim. (3) But subsection (2) only applies to the extent the total amount of the relief given does not exceed the limit (see section 41R). (4) The relief is given by deducting the amount of the relief in calculating the individual's net income for the tax year for which the claim is made (see Step 2 of the calculation in section 23 of ITA 2007). (5) A foreign employment relief claim must be made in a return. (6) A foreign employment relief claim for a tax year must be made before the end of the period of 12 months beginning with 31 January after the end of that tax year. (7) A foreign employment relief claim may not be made as a consequential claim (within the meaning of section 43C(5) of TMA 1970) if the circumstances which give rise to the consequential claim result from a loss of tax brought about carelessly or deliberately by the individual or a person acting on the individual’s behalf. (8) For the purposes of this Chapter “net taxable employment income”, in relation to a tax year, means the employment income on which the individual is charged to tax for the tax year (see section 9(1)). (41Q) (1) For the purposes of section 41P(2), the amount of net taxable employment income for a tax year that “reflects” qualifying foreign employment income is the total of— (a) the total of the amount of the net taxable earnings from each employment in the tax year that reflects qualifying foreign general earnings (see subsections (2) to (5)), and (b) the total of the amount of the net taxable specific income from each employment for the tax year that reflects qualifying foreign third party income or qualifying foreign securities income (see subsection (6)). (2) The amount of the net taxable earnings from an employment in a tax year that “reflects” qualifying foreign general earnings is— (a) the amount of the taxable earnings from the employment in the tax year that are qualifying foreign general earnings, minus (b) the amount of the qualifying deductions. (3) If the amount calculated under subsection (2) is nil or a negative amount, then none of the net taxable earnings from the employment in the tax year reflect qualifying foreign general earnings. (4) If the foreign employment relief claim is for the qualifying year, the amount of the qualifying deductions is the proportion of the total deductions that is the same as the proportion of the claim year taxable earnings that are qualifying foreign general earnings. (5) If the foreign employment relief claim is for a subsequent tax year, the amount of the qualifying deductions is the amount resulting from the following steps— - Step 1 Deduct the claim year taxable earnings from the total deductions. If the result is nil or a negative amount, there are no qualifying deductions. - Step 2 Deduct any other taxable earnings that are not qualifying foreign general earnings. If the result is nil or a negative amount, there are no qualifying deductions. (6) The proportion of the net taxable specific income from an employment for a tax year that “reflects” qualifying foreign third party income or qualifying foreign securities income is the same as the proportion of the taxable specific income for the employment in that year that is qualifying foreign third party income or qualifying foreign securities income. (7) In this section— - “claim year taxable earnings” means the taxable earnings from the employment in the tax year that are “for” the year for which the claim is made determined in accordance with section 16 and 17; - “total deductions” means the total amount of any deductions allowed from the taxable earnings from the employment in the tax year under provisions listed in section 327(3) to (5) (see section 11(1)). (41R) (1) This section sets out how to determine the limit on the amount of relief the individual is entitled to when making a foreign employment relief claim for a year for the purposes of section 41P(3). (2) The limit is the lesser of— (a) 30% of the relevant qualifying employment income, and (b) £300,000. (3) For the purposes of this section “relevant qualifying employment income” means— (a) so much of the net taxable employment income for the tax year for which the claim is made as reflects qualifying employment income, and (b) if the foreign employment relief claim is for a tax year that is subsequent to the qualifying year, so much of any net taxable employment income for any earlier tax year (but not any tax year before the qualifying year) as would reflect qualifying employment income if that earlier year was the year for which the claim was made. (4) If the foreign employment relief claim is for a tax year that is subsequent to the qualifying year, the limit is reduced by the total of any amounts reflecting qualifying foreign employment income that have previously been relieved under section 41P. (5) To determine the amounts mentioned in subsection (3)(a) and (b), apply section 41Q, but as if— (a) the references in that section to qualifying foreign employment income were to qualifying employment income, (b) the references in that section to qualifying foreign general earnings were to qualifying general earnings, and (c) the references in that section to qualifying foreign third party income and qualifying foreign securities income were references to qualifying third party income and qualifying securities income. (41S) (1) This section applies where an individual who is an active member of a registered pension scheme for the purposes of section 188 of FA 2004 (relief for contributions) makes a foreign employment relief claim for a tax year. (2) For the purposes of sections 189(1)(a) and 190 of that Act, references to the amount of the individual’s relevant UK earnings chargeable to income tax for that year are to be read as references to that amount minus the relieved amount. (3) The “relieved amount” is the amount of the relief to which the individual is entitled under section 41P(2) of this Act as a result of making the foreign employment relief claim. (41T) (1) Subsection (2) applies for the purpose of determining the adjusted net income under section 58 of ITA 2007 of an individual for a tax year for which the individual is entitled to relief under section 41P. (2) The adjusted net income is to be determined as if the relief had not been deducted in calculating the individual’s net income for the tax year. (41U) (1) General earnings are “qualifying general earnings” if they are— (a) “for” the qualifying year determined in accordance with sections 16 and 17, (b) if the qualifying year is a split year as respects the individual, attributable to the UK part of the year, and (c) from an employment the duties of which are performed wholly or partly outside the UK during the qualifying year. (2) Any attribution required for the purposes of subsection (1)(b) is to be done on a just and reasonable basis. (3) Qualifying general earnings are “qualifying foreign general earnings” if they are neither— (a) in respect of duties performed in the United Kingdom, nor (b) from overseas Crown employment subject to United Kingdom tax (see section 41X). (4) For the purposes of subsection (3), the extent to which qualifying general earnings are in respect of duties performed in the United Kingdom is to be determined on a just and reasonable basis. (41V) (1) For the purposes of this Chapter, “third party income” is an amount that counts under Chapter 2 of Part 7A (treatment of relevant step for income tax purposes) as employment income in respect of an employment. (2) Third party income is “qualifying third party income”— (a) if it is in respect of an employment the duties of which are performed wholly or partly outside the UK during the qualifying year, and (b) to the extent that the value of the relevant step that counts as employment income (see section 554Z3) is— (i) “for” the qualifying year determined in accordance with section 554Z4(2), and (ii) if the qualifying year is a split year as respects the individual, attributable to the UK part of the year. (3) Any attribution required for the purposes of subsection (2)(b)(ii) is to be done on a just and reasonable basis. (4) Qualifying third party income is “qualifying foreign third party income” to the extent that it is not in respect of duties performed in the United Kingdom. (5) The extent to which qualifying third party income is not in respect of duties performed in the United Kingdom is to be determined on a just and reasonable basis. (41W) (1) For the purpose of this Chapter, “securities income” is an amount that counts under Chapters 2 to 5 of Part 7 (employment-related securities etc) as employment income in respect of an employment (the “relevant employment”). (2) Securities income is “qualifying securities income”— (a) if the duties of the relevant employment are performed wholly or partly outside the UK during the qualifying year, and (b) to the extent that it— (i) accrues during the qualifying year, or (ii) if the qualifying year is a split year as respects the individual, accrues during the UK part of the year. (3) To determine when securities income accrues treat an equal amount of the securities income as accruing on each day of the relevant period determined in accordance with section 41G. (4) But if the proportion of the securities income that would be regarded as qualifying securities income by virtue of subsection (3) is not, having regard to all the circumstances, just and reasonable, the amount of the securities income that is qualifying securities income is such amount as is just and reasonable. (5) Qualifying securities income is wholly “qualifying foreign securities income” if the duties of the relevant employment are performed wholly outside the United Kingdom. (6) If some, but not all, of the duties of the relevant employment are performed outside the United Kingdom— (a) the qualifying securities income is to be apportioned (on a just and reasonable basis) between duties performed in the United Kingdom and duties performed outside the United Kingdom, and (b) the income apportioned in respect of duties performed outside the United Kingdom is qualifying foreign securities income. (7) But qualifying securities income from overseas Crown employment subject to United Kingdom tax is not qualifying foreign securities income. (41X) (1) This section explains what is meant by — (a) qualifying general earnings “from overseas Crown employment subject to United Kingdom tax” for the purposes of section 41U(3)(b), and (b) qualifying securities income “from overseas Crown employment subject to United Kingdom tax” for the purposes of section 41W(7). (2) Qualifying general earnings and qualifying securities income are “from overseas Crown employment” if the earnings or income is from Crown employment (within the meaning of section 28(2)) in respect of duties performed outside the United Kingdom. (3) Such earnings or income are to be taken as being “subject to United Kingdom tax” unless they fall within any exception contained in an order made under section 28(5) for the purposes of section 27(2). (4) An order made under section 28(5) may also— (a) provide for any exceptions mentioned in subsection (3) to not apply for the purposes of this section, and (b) make exceptions for the purposes of this section. (5) For the purposes of this section, if securities income is partly from overseas Crown employment subject to United Kingdom tax, a just and reasonable proportion of the securities income is to be taken to be from such employment. (41Y) (1) Section 38 (period of absence from employment) applies for the purposes of this Chapter as if references to general earnings were to general earnings or third party income. (2) Section 40(1) and (2) (place of performance of duties on board vessel or aircraft) applies for the purposes of this Chapter. (3) Duties of an employment performed in the UK sector of the continental shelf in connection with exploration of exploitation activities are to be treated for the purposes of this Chapter as being performed in the United Kingdom. (4) In subsection (3) “the UK sector of the continental shelf” and “exploration or exploitation activities” have the same meaning as in section 41 (treatment of general earnings from employment in the UK sector of the continental shelf). (41Z) (1) Any arrangements falling within subsection (2) are to be disregarded for the purposes of determining the extent to which— (a) general earnings are qualifying general earnings; (b) third party income is qualifying third party income; (c) securities income is qualifying securities income; (2) Arrangements fall within this subsection if the main purpose, or one of the main purposes of the arrangements is to enable an individual to obtain— (a) relief under this Chapter to which they would not otherwise be entitled, or (b) relief under this Chapter of a greater amount than that to which they would otherwise be entitled. (3) In this section “arrangements” includes any agreement, understanding, scheme, transaction or series of transactions (whether or not legally enforceable). (41Z1) (1) This section applies if— (a) the individual has associated employments from or in respect of which there is qualifying employment income, and (b) the duties of the associated employments are not performed wholly outside the United Kingdom. (2) There is a limit on how much of the qualifying employment income from or in respect of the associated employments is qualifying foreign employment income. (3) The limit is the proportion of the qualifying employment income that is reasonable having regard to— (a) the nature of, and time devoted to, the duties performed outside the United Kingdom, and those performed in the United Kingdom, and (b) all other relevant circumstances. (4) In this section “associated employments” means employments with the same employer or with associated employers; and section 24(5) and (6) applies for the purposes of this section.

• (2) In Schedule 8—

• (a) Part 1 makes general consequential amendments;

• (b) Part 2 makes consequential amendments relating to the operation of PAYE;

• (c) Part 3 contains transitional provision.

• (3) The amendments made by this section and the provision made by Schedule 8 have effect for the tax year 2025-2026 and subsequent tax years.

Claim for relief on foreign gains

39

• (1) TCGA 1992 is amended as follows.

• (2) Before Schedule 1 insert—

Schedule D1 (1) (1) An individual may make a claim for relief for a tax year under this paragraph (a “foreign gain claim”) if the individual is a qualifying new resident for that tax year. (2) Paragraphs 2, 3 and 4 set out the reliefs that may be obtained by making a foreign gain claim. (3) A foreign gain claim must be made in a return. (4) A foreign gain claim in relation to a tax year must be made before the end of the period of 12 months beginning with 31 January after the end of that tax year. (5) A foreign gain claim may not be made as a consequential claim (within the meaning of section 43C(5) of the Management Act) if the circumstances which give rise to the consequential claim result from a loss of tax brought about carelessly or deliberately by the individual or a person acting on the individual’s behalf. (6) For the purposes of this paragraph— (a) “return” means a return under section 8 of the Management Act (personal return), (b) references to a claim being included in a return include a claim being so included as a result of an amendment of the return, and (c) subsections (5) to (7) of section 118 of the Management Act (loss of tax brought about carelessly or deliberately) apply as they apply for the purposes of that Act. (2) (1) Where an individual makes a foreign gain claim for a tax year, the individual is entitled to relief for each qualifying foreign gain accruing to the individual in that year that is identified in the claim. (2) The relief is given by deducting an amount equal to the sum of those gains from the total amount of chargeable gains accruing to the individual. (3) (1) This paragraph applies if— (a) an amount of chargeable gains would (but for this paragraph) be treated as accruing to an individual in a tax year under section 86(4) (attribution of gains to settlors of non-resident settlements), (b) a qualifying foreign gain accrued in that tax year to the trustees of the settlement concerned (or would have done on the assumption in section 86(3)), and (c) the individual identifies the gain mentioned in paragraph (b) in a foreign gain claim for that tax year. (2) For the purposes of section 86(1)(e) as it applies to the individual, the following are to be disregarded (in that tax year and in later tax years)— (a) the gain mentioned in sub-paragraph (1)(b); (b) any qualifying foreign loss that accrued to the trustees in that tax year (or that would have so accrued on the assumption in section 86(3)). (4) (1) This paragraph applies if— (a) a settlement is for a tax year— (i) one to which section 87 or 89(2) applies (attribution of gains to beneficiaries of settlements), or (ii) a relevant settlement in relation to a Schedule 4C pool, within the meaning of paragraph 8A of Schedule 4C (transfers of value: attribution of gains etc), (b) a beneficiary of the settlement receives a capital payment from the trustees in that tax year, and (c) the individual identifies the capital payment in a foreign gain claim for that tax year. (2) The capital payment is to be disregarded (in that tax year and in later tax years) for the purposes of sections 87, 87A and 89(2) and paragraph 8 of Schedule 4C. (3) The following apply for the purposes of this paragraph as they apply for the purposes of section 87— (a) section 87G (which provides for capital payments made to a close member of the settlor’s family to be treated in certain cases as received by the settlor); (b) section 97 (which makes provision about the construction of “capital payment”, “settlement”, “trustees” and “beneficiary”). (5) For other effects of making a foreign gain claim, see— (a) section 1K(6)(b) (annual exempt amount), which provides that where a foreign gain claim has effect in relation to an individual for a tax year, the individual has no entitlement to an annual exempt amount for that year, (b) section 16(4) (computation of losses), which provides that where a foreign gain claim has effect in relation to an individual for a tax year, qualifying foreign losses accruing to the individual in that year are not allowable losses, and (c) sections 845C to 845E of ITTOIA 2005, which set out some income tax consequences of making a foreign gain claim. (6) In this Schedule— - “qualifying foreign asset” means an asset that— is situated outside the United Kingdom, and does not derive at least 75% of its value from UK land (see Schedule 1A); - “qualifying foreign gain” means— a chargeable gain accruing on the disposal of a qualifying foreign asset, a chargeable gain treated as accruing as a result of section 3 (gains of non-UK resident close companies attributed to UK residents) where the gain accruing to the non-UK resident close company to which the deemed gain relates accrued on the disposal of a qualifying foreign asset, or a qualifying QAHC gain, but a chargeable gain falling within paragraph (a) or (b) is not a qualifying foreign gain if it is a gain to which paragraph 1(2) of Schedule 1 applies (pre-2025-26 gains subject to the remittance basis); - “qualifying foreign loss” means a loss accruing on the disposal of an asset that is a qualifying foreign asset; - “qualifying QAHC gain” means the foreign proportion (see paragraph 46(4) to (6) of Schedule 2 to FA 2022) of a chargeable gain accruing on the disposal of shares in a QAHC (within the meaning of that Schedule) other than a chargeable gain to which paragraph 46(3) of that Schedule applies.

• (3) In section 1A (territorial scope), in subsection (2), before paragraph (a) insert—

(za) Schedule D1 (relief for new residents on foreign gains),

.

• (4) In section 1E (losses deductible only when within scope of tax), in subsection (6), for “Schedule 1 (UK resident individuals not domiciled in the UK)” substitute “paragraph 5 of Schedule D1 (relief for new residents on foreign gains).”

• (5) In section 1K (annual exempt amount), in subsection (6)—

• (a) the words from “section” to the end become paragraph (a) of that subsection, and

• (b) after that paragraph insert

, or (b) the individual makes a foreign gain claim, a foreign income claim or a foreign employment election for that tax year.

• (6) In section 16 (computation of losses), at the end insert—

(4) A qualifying foreign loss accruing to an individual in a tax year is not an allowable loss if a foreign gain claim, a foreign income claim or a foreign employment election has effect in relation to the individual for that tax year. (5) In subsection (4), “qualifying foreign loss” has the same meaning as in Schedule D1 (see paragraph 6 of that Schedule).

• (7) In section 288 (interpretation), in subsection (1) at the appropriate places insert—

• “foreign employment election” means a claim under section 41M of ITEPA 2003;

;

• “foreign gain claim” means a claim under paragraph 1 of Schedule D1;

;

• “foreign income claim” means a claim under section 845A of ITTOIA 2005;

;

• “qualifying new resident” has the meaning given by section 845B of ITTOIA 2005 (which sets out the circumstances in which an individual will be a qualifying new resident following a period of 10 years of non-residence);

.

• (8) In Schedule 1A, in paragraph 1, after “2B(4)(b)” insert “or paragraph 6 of Schedule D1”.

• (9) In Schedule 1C (annual exempt amount in cases involving settled property), in paragraph 1(4), for the words from “who” to the end substitute “to whom subsection (6) of that section does not apply.”

• (10) In Schedule 2 to FA 2022 (qualifying asset holding companies), in paragraph 46—

• (a) in the heading (as amended by section 37(3)(a)), after “income” insert “or gain”, and

• (b) in sub-paragraph (6A) (as inserted by section 37(3)(c)), after “claim)” insert “and paragraph (c) of the definition of “qualifying foreign gain” in paragraph 6 of Schedule D1 to TCGA 1992 (foreign gain claims)”.

• (11) The amendments made by this section have effect for the tax year 2025-26 and subsequent tax years.

Chapter 2 — Ending the special treatment of individuals not domiciled in United Kingdom

Remittance basis not available after tax year 2024-25

40

• (1) Amendments made by paragraph 1 of Schedule 9 have the effect that the remittance basis is not available for tax year 2025-26, or for subsequent tax years.

• (2) But provisions relating to the remittance of income and gains will continue to have effect in relation to income and gains subject to the remittance basis in previous tax years.

• (3) Other provision is made by that Schedule (including provision amending the Income Tax Acts and TCGA 1992)—

• (a) in consequence of ending the availability of the remittance basis,

• (b) clarifying the circumstances in which amounts are remitted (see paragraph 5), and

• (c) in connection with otherwise ending the relevance of domicile to income tax and capital gains tax.

• (4) Subject to subsections (5) and (6), the provision made by that Schedule has effect for the tax year 2025-26 and subsequent tax years.

• (5) Paragraph 6 of Schedule 9 (relief for amounts remitted again on becoming UK resident) is to be treated as having always had effect.

• (6) The amendments made by paragraphs 9 and 10 of Schedule 9 (residence of personal representatives) have effect where the deceased person died on or after 6 April 2025.

Temporary repatriation facility

41

Schedule 10 makes provision for a “temporary repatriation facility” for individuals who have been subject to the remittance basis.

Rebasing of assets

42

Schedule 11 makes provision about the rebasing of assets for individuals who have been subject to the remittance basis.

Chapter 3 — Trusts etc

Trusts: connected amendments, transitional provision etc

43

• (1) Schedule 12 amends legislation relating to the taxation of income and gains arising within trusts and similar structures, and in particular—

• (a) contains amendments connected with the introduction of relief for qualifying new residents and the abolition of the remittance basis of taxation (see Chapters 1 and 2), and

• (b) removes certain protections for foreign-source income and gains that have been available since the tax year 2017-18 while making transitional provision in respect of income that arose in past tax years.

• (2) In that Schedule—

• Part 1 amends Chapter 5 of Part 5 of ITTOIA 2005 (settlements: amounts treated as income of settlor or family);

• Part 2 amends Chapter 2 of Part 13 of ITA 2007 (transfer of assets abroad);

• Part 3 amends Chapter 2 of Part 3 of TCGA 1992 (settlements: chargeable gains) and other provisions of TCGA 1992 relating to trusts and similar structures;

• Part 4 contains provision about commencement and transitional provision.

Chapter 4 — Inheritance tax

Excluded property: domicile test replaced with long-term residence test

44

• (1) IHTA 1984 is amended as follows.

• (2) In section 6 (excluded property), in subsections (1) and (1A), for “domiciled outside the United Kingdom” substitute “who is not a long-term UK resident”.

• (3) After section 6 insert—

(6A) (1) For the purposes of this Act, an individual is a “long-term UK resident” at all times in a tax year if they were UK resident for at least 10 of the previous 20 tax years. (2) But an individual is not a long-term UK resident at any time in a tax year (“the current tax year”) if they were non-UK resident— (a) for any 10 consecutive tax years during the 19 tax years before the current tax year, or (b) for at least the required number of consecutive tax years ending with the tax year before the current tax year. (3) To determine “the required number” for the purposes of subsection (2)(b), take the 20 tax years ending with the last tax year for which the individual was UK resident and find the number of those tax years for which the individual was UK resident (“the number of resident years”). The required number is the number in the second column of the following table corresponding to the number of resident years.

Number of resident years	Required number
13 or less	3
14	4
15	5
16	6
17	7
18	8
19	9
20	10

(4) In this section, “UK resident” means resident in the United Kingdom and “non-UK resident” means not resident in the United Kingdom. (5) For the purposes of this section, a question as to whether the individual was UK resident for the tax year 2012-13 or an earlier tax year is to be determined as it would have been determined for income tax purposes for that tax year (and as to later tax years see Schedule 45 to the Finance Act 2013 (statutory residence test)). (6) See also— (a) section 6B (which modifies this section in its application to young persons); (b) sections 267ZC to 267ZE (under which a person may be treated as a long-term UK resident as the result of an election). (6B) (1) In the application of section 6A(1) for the purpose of determining whether a young person is a long-term UK resident at any time in a tax year (“the current tax year”), that subsection has effect as if— (a) for “20” there were substituted the number of whole tax years for which the person was alive before the current tax year, and (b) for “10” there were substituted half the number mentioned in paragraph (a) (rounded up, if not a whole number, to the next whole number). (2) In subsection (1), “young person” means an individual who was under the age of 20 immediately before the current tax year. (3) For the purposes of this Act, an individual is not a long-term UK resident at any time in a tax year if they were under the age of 1 (or were not yet born) immediately before the tax year. (6C) For the purposes of this Act, a body corporate is a “long-term UK resident” at all times in a tax year if the body— (a) is incorporated in the United Kingdom, or (b) was (if in existence before the beginning of the tax year) within the charge to corporation tax on income at any time during the previous tax year by virtue of section 5(1) of the Corporation Tax Act 2009 (UK resident companies).

• (4) This section comes into force on 6 April 2025.

Corresponding change for settled property

45

• (1) IHTA 1984 is amended as follows.

• (2) In section 48 (excluded property)—

• (a) in the heading, at the end insert “: reversionary interests and Treasury securities”;

• (b) omit subsections (3) to (3F).

• (3) After section 48 insert—

(48ZA) (1) If property comprised in a settlement— (a) is situated outside the United Kingdom, or (b) is a holding in an authorised unit trust or a share in an open-ended investment company, this section applies to the property and section 6(1) and (1A) (general excluded property rule) does not. (2) If the settlor is alive, the property is excluded property at any time when the settlor is not a long-term UK resident. (3) If the settlor died on or after 6 April 2025, the property is excluded property if the settlor was not a long-term UK resident immediately before they died. (4) If the settlor died before 6 April 2025, the property is excluded property if the settlor was not domiciled in the United Kingdom when the property became comprised in the settlement. (5) Subsections (2) and (3) do not apply at any time to property to which section 49(1) (certain interests in possession) applies if, at that time, the person beneficially entitled to the interest is a long-term UK resident. (6) Subsections (2) to (4) do not apply to property if— (a) an individual has been beneficially entitled to an interest in possession in the property— (i) at any time on or after 6 April 2025 while a long-term UK resident, or (ii) at any time before that date while domiciled in the United Kingdom, and (b) the entitlement arose directly or indirectly as a result of a disposition made on or after 5 December 2005 for a consideration in money or money's worth. (7) For the purposes of subsection (6)— (a) it is immaterial whether the consideration was given by the individual or by anyone else, and (b) the cases in which an entitlement arose indirectly as a result of a disposition include any case where the entitlement arose under a will or the law relating to intestacy. (8) Where the conditions in paragraphs (a) to (d) of section 74A(1) (arrangements involving acquisition of interest in settled property etc) are satisfied, none of subsections (2) to (4) applies at the time when the conditions are first satisfied or at any later time to make the relevant settled property (within the meaning of section 74A) excluded property. (9) If— (a) an amount is payable in respect of property (“the existing property”) comprised in a settlement, and (b) the amount represents an accumulation of income which (once accumulated) becomes comprised in the settlement, subsection (4) has effect in the case of the amount as if the reference to the time when it became comprised in the settlement were to the time when the existing property became comprised in the settlement. (10) Subsections (2) to (4) are subject to Schedule A1 (overseas property with value attributable to UK residential property). (11) The reference in subsection (1) to property comprised in a settlement does not include a reversionary interest in the property (and accordingly this section does not apply to such an interest and section 6(1) does).

• (4) This section comes into force on 6 April 2025.

Consequential, connected and transitional provision

46

In Schedule 13—

• Part 1 contains amendments to IHTA 1984 and related legislation that are consequential on, connected with or incidental to the new excluded property tests introduced by sections 44 and 45;

• Part 2 contains provision about commencement and transitional provision.

Part 3 — Other taxes

Value added tax

Removal of exemption for private school fees

47

• (1) VATA 1994 is amended as follows.

• (2) In Schedule 9 (exemptions)—

• (a) in Group 6 (education)—

• (i) in item 3(b)(i), after “5A” insert “(or would be so exempt but for item 1 or 2 of Part 3)”;

• (ii) in item 4, after “item 1” insert “(whether or not that supply also falls within item 1 or 2 of Part 3)”;

• (b) after Part 2 (the groups) insert—

Item No.
Notes: A “private school” means an institution which is either— a school— at which full-time education is provided for pupils of compulsory school age or, in Scotland, school age (whether or not such education is also provided for pupils under or over that age), where fees or other consideration are payable for that provision of full-time education, and which is not a nursery school, or an institution— which is wholly or mainly concerned with providing education suitable to the requirements of persons over compulsory school age (or, in Scotland, school age) but under 19, at which full-time education is provided for such persons, where the provision of full-time education falling within sub-paragraph (ii) is wholly or mainly provision in respect of which fees or other consideration are payable, and which is not an independent training or learning provider. In Note (1)(b) an “independent training or learning provider” means an institution— at which education or training is provided for persons over compulsory school age (or, in Scotland, school age) but under 19 under a contract with a relevant contracting authority, and where the consideration for the provision falling within paragraph (a) is payable by the relevant contracting authority under that contract. For the purposes of Note (2), a “relevant contracting authority” means the Secretary of State, Medr (Commission for Tertiary Education and Research), the Department for the Economy in Northern Ireland or Skills Development Scotland. For the purposes of items 1 and 2, the provision of education or vocational training at a private school by any eligible body other than a private school is to be treated as provision by a private school if— the eligible body and that private school are connected within the meaning of section 1122 of the Corporation Tax Act 2010 (connected persons), or the provision by the eligible body is a result of arrangements the main purpose, or one of the main purposes, of which is to secure that the provision is an exempt supply. For the purposes of Note (4)— “arrangements” include any agreement, understanding, scheme, transaction or series of transactions (whether or not legally enforceable), and an “eligible body” has the meaning given by Note (1) to Group 6. For the purposes of item 1— a “nursery class” means a class that is composed wholly (or almost wholly) of children who— are under compulsory school age or, in Scotland, school age, and would not be expected to attain that age while in that class, and a “higher education course”— in relation to England and Wales, has the meaning given by section 83(1) of the Higher Education and Research Act 2017; in relation to Scotland, means a course of any description mentioned in section 5(3) of the Further and Higher Education (Scotland) Act 2005; in relation to Northern Ireland, means a course of any description mentioned in paragraph 1 of Schedule 1 to the Further Education (Northern Ireland) Order 1997 (S.I. 1997/1772 (N.I. 15)). For the purposes of item 2 “vocational training” has the meaning given by Note (3) to Group 6. In these Notes, “compulsory school age”, “pupil”, “school” and “school age” have the meanings given by the Education Act 1996, the Education (Scotland) Act 1980 and the Education and Libraries (Northern Ireland) Order 1986 (S.I. 1986/594 (N.I. 3)) in relation to England and Wales, Scotland and Northern Ireland respectively.	Notes: A “private school” means an institution which is either— a school— at which full-time education is provided for pupils of compulsory school age or, in Scotland, school age (whether or not such education is also provided for pupils under or over that age), where fees or other consideration are payable for that provision of full-time education, and which is not a nursery school, or an institution— which is wholly or mainly concerned with providing education suitable to the requirements of persons over compulsory school age (or, in Scotland, school age) but under 19, at which full-time education is provided for such persons, where the provision of full-time education falling within sub-paragraph (ii) is wholly or mainly provision in respect of which fees or other consideration are payable, and which is not an independent training or learning provider. In Note (1)(b) an “independent training or learning provider” means an institution— at which education or training is provided for persons over compulsory school age (or, in Scotland, school age) but under 19 under a contract with a relevant contracting authority, and where the consideration for the provision falling within paragraph (a) is payable by the relevant contracting authority under that contract. For the purposes of Note (2), a “relevant contracting authority” means the Secretary of State, Medr (Commission for Tertiary Education and Research), the Department for the Economy in Northern Ireland or Skills Development Scotland. For the purposes of items 1 and 2, the provision of education or vocational training at a private school by any eligible body other than a private school is to be treated as provision by a private school if— the eligible body and that private school are connected within the meaning of section 1122 of the Corporation Tax Act 2010 (connected persons), or the provision by the eligible body is a result of arrangements the main purpose, or one of the main purposes, of which is to secure that the provision is an exempt supply. For the purposes of Note (4)— “arrangements” include any agreement, understanding, scheme, transaction or series of transactions (whether or not legally enforceable), and an “eligible body” has the meaning given by Note (1) to Group 6. For the purposes of item 1— a “nursery class” means a class that is composed wholly (or almost wholly) of children who— are under compulsory school age or, in Scotland, school age, and would not be expected to attain that age while in that class, and a “higher education course”— in relation to England and Wales, has the meaning given by section 83(1) of the Higher Education and Research Act 2017; in relation to Scotland, means a course of any description mentioned in section 5(3) of the Further and Higher Education (Scotland) Act 2005; in relation to Northern Ireland, means a course of any description mentioned in paragraph 1 of Schedule 1 to the Further Education (Northern Ireland) Order 1997 (S.I. 1997/1772 (N.I. 15)). For the purposes of item 2 “vocational training” has the meaning given by Note (3) to Group 6. In these Notes, “compulsory school age”, “pupil”, “school” and “school age” have the meanings given by the Education Act 1996, the Education (Scotland) Act 1980 and the Education and Libraries (Northern Ireland) Order 1986 (S.I. 1986/594 (N.I. 3)) in relation to England and Wales, Scotland and Northern Ireland respectively.
1	The provision of education by a private school, other than— the provision of the teaching of English as a foreign language, the provision of education in a nursery class, or the provision of a higher education course.
2	The provision of vocational training by a private school.
3	The provision of board and lodging which is closely related to a supply of a description falling within item 1 or 2.

• (3) In section 31 (exempt supplies), in subsection (1), for “Schedule 9” substitute “Part 2 of Schedule 9 and it is not of a description specified in Part 3 of that Schedule”.

• (4) In section 8 (reverse charge on supplies received from abroad), in subsection (4A), for “Schedule 9” substitute “Part 2 of Schedule 9 and not specified in Part 3 of that Schedule”.

• (5) In section 43 (groups of companies), in subsection (2A)—

• (a) in paragraph (b), for “Schedule 9” substitute “Part 2 of Schedule 9 or are within any of the descriptions specified in Part 3 of that Schedule”;

• (b) in paragraph (c) for “Schedule 9” substitute “Part 2 of Schedule 9 or which do fall within any of the descriptions specified in Part 3 of that Schedule”.

Charge on pre-paid private school fees

48

• (1) Subsection (2) applies to the provision of education services during a school term if a payment in respect of the services was received by the person providing the services on or after 29 July 2024 and before 30 October 2024.

• (2) That provision is treated for the purposes of the charge to VAT as a supply taking place on the later of—

• (a) 1 January 2025, and

• (b) the first day of that term.

Accordingly, that provision is not to be regarded (as a result of provision made by or under VATA 1994) as a supply taking place at any other time.

• (3) But subsection (2) does not apply to the provision of education services by a school if the school is approved under section 342 of the Education Act 1996 (approval of non-maintained special schools).

• (4) In this section “the provision of education services” means a provision of education, vocational training or board and lodging falling within Part 3 of Schedule 9 (exceptions).

• (5) This section is to be read as if it were contained in VATA 1994.

Sections 47 and 48: commencement

49

• (1) Sections 47 and 48 are to be treated as having come into force on 30 October 2024 and have effect in relation to any provision of education, vocational training or board and lodging on or after 1 January 2025 (whenever that supply is treated as taking place for the purposes of the charge to VAT).

Stamp duty land tax

Increased rates for additional dwellings: transactions before 1 April 2025

50

• (1) Section 1 of the Stamp Duty Land Tax (Temporary Relief) Act 2023 (which provides for reduced rates of stamp duty land tax for transactions before 1 April 2025) is amended as follows.

• (2) In subsection (3) (which deals with purchases of additional dwellings), for the Table A mentioned there substitute—

Part of relevant consideration	Percentage
So much as does not exceed £250,000	5%
So much as exceeds £250,000 but does not exceed £925,000	10%
So much as exceeds £925,000 but does not exceed £1,500,000	15%
The remainder (if any)	17%

.

• (3) The amendment made by this section has effect in relation to land transactions the effective date of which falls on or after 31 October 2024 but before 1 April 2025.

• (4) But the amendment made by this section does not have effect in relation to a land transaction which—

• (a) is effected in pursuance of a contract entered into before 31 October 2024, and

• (b) is not excluded.

• (5) For this purpose a land transaction is excluded if—

• (a) there is any variation of the contract, or assignment of rights under the contract, on or after 31 October 2024,

• (b) the transaction is effected in consequence of the exercise on or after that date of any option, right of pre-emption or similar right, or

• (c) on or after that date, there is an assignment, subsale or other transaction relating to the whole or part of the subject-matter of the contract as a result of which a person other than the purchaser under the contract becomes entitled to call for a conveyance.

• (6) This section also needs to be read with section 52 (which deals with cases where a contract has been substantially performed before the change in rates made by this section etc).

Increased rates for additional dwellings: transactions on or after 1 April 2025

51

• (1) In Schedule 4ZA to FA 2003 (higher rates of stamp duty land tax for additional dwellings etc), for the Table A in section 55(1B) mentioned in paragraph 1(2) substitute—

Part of relevant consideration	Percentage
So much as does not exceed £125,000	5%
So much as exceeds £125,000 but does not exceed £250,000	7%
So much as exceeds £250,000 but does not exceed £925,000	10%
So much as exceeds £925,000 but does not exceed £1,500,000	15%
The remainder (if any)	17%

.

• (2) The amendment made by this section has effect in relation to land transactions the effective date of which falls on or after 1 April 2025.

• (3) But the amendment made by this section does not have effect in relation to a land transaction which—

• (a) is effected in pursuance of a contract entered into before 31 October 2024, and

• (b) is not excluded.

• (4) For this purpose a land transaction is excluded if—

• (a) there is any variation of the contract, or assignment of rights under the contract, on or after 31 October 2024,

• (b) the transaction is effected in consequence of the exercise on or after that date of any option, right of pre-emption or similar right, or

• (c) on or after that date, there is an assignment, subsale or other transaction relating to the whole or part of the subject-matter of the contract as a result of which a person other than the purchaser under the contract becomes entitled to call for a conveyance.

• (5) This section also needs to be read with section 52 (which deals with cases where a contract has been substantially performed before the change in rates made by this section etc).

Contracts substantially performed before relevant rate change

52

• (1) The Stamp Duty Land Tax (Temporary Relief) Act 2020 is amended as follows.

• (2) In section 1 (reduced rates of SDLT in relation to land transactions the effective date of which falls in the period beginning with 8 July 2020 and ending with 30 June 2021)—

• (a) in subsection (6) (which provides an exception from section 44(8) of FA 2003 where the contract is completed after 30 June 2021), for the words from “that the modifications” to the end substitute “the reason given by subsection (6A)”, and

• (b) after subsection (6) insert—

(6A) For this purpose, the sole reason is either— (a) that the modifications made by this section have no effect in relation to that conveyance, or (b) that both paragraph (a) applies and the increased rates provided for by section 50 or 51 of the Finance Act 2025 would have had effect in relation to that conveyance.

• (3) In section 1A (reduced rates of SDLT in relation to land transactions the effective date of which falls in the period beginning with 1 July 2021 and ending with 30 September 2021)—

• (a) in subsection (5) (which provides an exception from section 44(8) of FA 2003 where the contract is completed after 30 September 2021), for the words from “that the modifications” to the end substitute “the reason given by subsection (5A)”, and

• (b) after subsection (5) insert—

(5A) For this purpose, the sole reason is either— (a) that the modifications made by this section have no effect in relation to that conveyance, or (b) that both paragraph (a) applies and the increased rates provided for by section 50 or 51 of the Finance Act 2025 would have had effect in relation to that conveyance.

• (4) In section 1 of the Stamp Duty Land Tax (Temporary Relief) Act 2023 (reduced rates of SDLT in relation to land transactions the effective date of which falls in the period beginning with 23 September 2022 and ending with 31 March 2025)—

• (a) in subsection (6) (which provides an exception from section 44(8) of FA 2003 where the contract is completed after 31 March 2025), for the words from “that the modifications” to the end substitute “the reason given by subsection (6A)”, and

• (b) after subsection (6) insert—

(6A) For this purpose, the sole reason is either— (a) that the modifications made by subsections (2) to (5) have no effect in relation to that conveyance, or (b) that both paragraph (a) applies and the increased rates provided for by section 51 of the Finance Act 2025 would have had effect in relation to that conveyance.

• (5) In a case where—

• (a) as a result of section 44(4) of FA 2003 the effective date of a land transaction is before 31 October 2024, and

• (b) the contract concerned is completed by a conveyance on or after that date,

section 44(8) of that Act is not to apply in relation to that conveyance if the sole reason that (but for this subsection) it would have applied is that the increased rates provided for by section 50 or 51 of this Act would have had effect in relation to that conveyance.

• (6) Section 44(10) of FA 2003 applies for the purposes of subsection (5).

Purchases by companies etc

53

• (1) In—

• (a) paragraph 3(1)(a) of Schedule 4A to FA 2003 (higher rate of SDLT for purchases by companies etc), and

• (b) step 4 in section 74(1A) of FA 2003 (exercise of collective rights by tenants of flats where condition in paragraph 3(3) of that Schedule is met),

for “15%” substitute “17%”.

• (2) The amendments made by this section have effect in relation to land transactions the effective date of which falls on or after 31 October 2024.

• (3) But the amendments made by this section do not have effect in relation to a land transaction which—

• (a) is effected in pursuance of a contract entered into before that date, and

• (b) is not excluded.

• (4) For this purpose a land transaction is excluded if—

• (a) there is any variation of the contract, or assignment of rights under the contract, on or after 31 October 2024,

• (b) the transaction is effected in consequence of the exercise on or after that date of any option, right of pre-emption or similar right, or

• (c) on or after that date, there is an assignment, subsale or other transaction relating to the whole or part of the subject-matter of the contract as a result of which a person other than the purchaser under the contract becomes entitled to call for a conveyance.

• (5) In a case where—