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Finance (No. 4) BillPage 610

those arrangements have effect, and do so in spite of anything in
any enactment or instrument.

(2) “International tax enforcement arrangements” means
arrangements which relate to one or both of the following—

(a) 5the exchange of information foreseeably relevant to the
administration, enforcement or recovery of the bank levy
or any equivalent foreign levy to which the double
taxation arrangements relate;

(b) the service of documents relating to the bank levy or any
10such equivalent foreign levy.

(3) An order under this paragraph revoking an earlier order may
contain transitional provisions that appear to the Treasury to be
necessary or expedient.

(4) Subsections (4) and (5) of section 173 of FA 2006 (international tax
15enforcement arrangements: disclosure of information) apply to
arrangements which have effect under this paragraph as they
apply to arrangements which have effect under that section.

(5) Orders under this paragraph are to be made by statutory
instrument.

(6) 20A statutory instrument containing an order under this paragraph
is subject to annulment in pursuance of a resolution of the House
of Commons.

(3) Accordingly, the italic heading before paragraph 68 is omitted.

Transitional provision

(1) 25This paragraph applies where—

(a) an amount of the bank levy is treated as if it were an amount of
corporation tax chargeable on an entity (“E”) for an accounting
period of E,

(b) the chargeable period in respect of which the amount of the bank
30levy is charged falls (or partly falls) on or after 1 January 2012, and

(c) under the Instalment Payment Regulations, one or more instalment
payments, in respect of the total liability of E for the accounting
period, were treated as becoming due and payable before the
commencement date (“pre-commencement instalment payments”).

(2) 35Paragraphs 2 to 10 are to be ignored for the purpose of determining the
amount of any pre-commencement instalment payment.

(3) If there is at least one instalment payment, in respect of the total liability of
E for the accounting period, which under the Instalment Payment
Regulations is treated as becoming due and payable on or after the
40commencement date (“post-commencement instalment payments”), the
amount of that instalment payment, or the first of them, is to be increased by
the adjustment amount.

(4) If there are no post-commencement instalment payments, a further
instalment payment, in respect of the total liability of E for the accounting
45period, of an amount equal to the adjustment amount is to be treated as

Finance (No. 4) BillPage 611

becoming due and payable at the end of the period of 30 days beginning
with the commencement date.

(5) “The adjustment amount” is the difference between—

(a) the aggregate amount of the pre-commencement instalments
5determined in accordance with sub-paragraph (2), and

(b) the aggregate amount of those instalment payments determined
ignoring sub-paragraph (2) (and so taking account of paragraphs 2 to
10).

(6) In the Instalment Payment Regulations—

(a) 10in regulations 6(1)(a), 7(2), 8(1)(a) and (2)(a), 9(5), 10(1), 11(1) and 13,
references to regulation 4A, 4B, 4C, 4D, 5, 5A or 5B of those
Regulations are to be read as including a reference to sub-paragraphs
(1) to (5) (and in regulation 7(2) “the regulation in question”, and in
regulation 8(2) “that regulation”, are to be read accordingly), and

(b) 15in regulation 9(3), the reference to those Regulations is to be read as
including a reference to sub-paragraphs (1) to (5).

(7) In section 59D of TMA 1970 (general rule as to when corporation tax is due
and payable), in subsection (5), the reference to section 59E is to be read as
including a reference to this paragraph.

(8) 20In this paragraph—

and references to the total liability of E for an accounting period are to be
construed in accordance with regulation 2(3) of the Instalment Payment
Regulations.

Section 212

SCHEDULE 34 30Stamp duty land tax: higher rate for certain transactions

Introductory

1 Part 4 of FA 2003 (stamp duty land tax) is amended in accordance with
paragraphs 2 to 9.

Higher rate of tax: main provisions

(1) 35Section 55 (amount of tax chargeable: general) is amended as follows.

(2) In subsection (1), after “chargeable transaction” insert “to which this section
applies”.

(3) After that subsection insert—

(1A) This section applies to any chargeable transaction other than a
40transaction to which paragraph 3 of Schedule 4A or step 4 of section
74(1A) (higher rate for certain transactions) applies.

Finance (No. 4) BillPage 612

(4) In subsection (2), for “That percentage” substitute “The percentage
mentioned in subsection (1)”.

(5) In subsection (5), for “74” substitute “74(2) and (3)”.

(6) In subsection (7), after “this section” insert “, step 4 of section 74(1A) or
5paragraph 3 of Schedule 4A”.

3 After section 55 insert—

55A Amount of tax chargeable: higher rate for certain transactions

Schedule 4A provides for the calculation of the tax chargeable in
respect of certain transactions involving higher threshold interests in
10dwellings.

4 After Schedule 4 insert—

Schedule 4A Stamp duty land tax: higher rate for certain transactions

Meaning of “higher threshold interest”

(1) In this paragraph “interest in a single dwelling” means so much of
15the subject-matter of a chargeable transaction as consists of a
chargeable interest in or over a single dwelling (together with
appurtenant rights).

(2) An interest in a single dwelling is a higher threshold interest for
the purposes of this Schedule if chargeable consideration of more
20than £2,000,000 is attributable to that interest.

Transactions involving a higher threshold interest

(1) Sub-paragraphs (2) to (8) apply to a chargeable transaction whose
subject-matter consists of or includes a higher threshold interest.

(2) If the main subject-matter of the transaction consists entirely of
25higher threshold interests, the transaction is a high-value
residential transaction for the purposes of paragraph 3.

(3) If the main subject-matter of the transaction includes a chargeable
interest other than a higher threshold interest, the transaction
(“the primary transaction”) is to be treated for the relevant
30purposes as two separate chargeable transactions as follows—

(a) a transaction whose subject-matter is all the higher
threshold interests, together with any appurtenant rights;

(b) a transaction whose subject-matter is the remainder of the
subject-matter of the primary transaction.

(4) 35For those purposes, the chargeable consideration for a transaction
treated as occurring under sub-paragraph (3) is so much of the
chargeable consideration for the primary transaction as is
attributable to that transaction.

(5) The transaction mentioned in sub-paragraph (3)(a) is a high-value
40residential transaction for the purposes of paragraph 3.

Finance (No. 4) BillPage 613

(6) “Relevant purposes” means the purposes of—

(a) paragraphs 3 and 5 of this Schedule,

(b) section 55 (amount of tax chargeable: general),

(c) Schedule 5 (amount of tax chargeable: rent),

(d) 5Schedule 6B (transfers involving multiple dwellings), and

(e) any other provision of this Part, so far as it is necessary
because of any of paragraphs (a) to (d) to treat the purposes
in question as relevant purposes.

(7) If a transaction treated under sub-paragraph (3) as two separate
10transactions is notifiable, each of the separate transactions (but not
the primary transaction) is also treated as a separate, and
notifiable, transaction for the purposes of section 76 (duty to
deliver land transaction return).

(8) The provisions relating to land transaction returns are to be read
15with any adjustments that may be necessary as a result of sub-
paragraph (7).

(9) The reference in sub-paragraph (1) to a chargeable transaction
does not include a transaction to which section 74 (exercise of
collective rights by tenants of flats) or section 75 (crofting
20community right to buy) applies.

Amount of tax chargeable: higher rate for certain transactions

(1) Where this paragraph applies to a chargeable transaction—

(a) the amount of tax chargeable in respect of the transaction
is 15% of the chargeable consideration for the transaction,
25and

(b) the transaction is not taken to be linked to any other
transaction for the purposes of section 55(4).

(2) This paragraph applies to a chargeable transaction if—

(a) the transaction is a high-value residential transaction, and

(b) 30the condition in sub-paragraph (3) is met.

(3) The condition is that—

(a) the purchaser is a company,

(b) the acquisition is made by or on behalf of the members of
a partnership one or more of whose members is a
35company, or

(c) the acquisition is made for the purposes of a collective
investment scheme.

(4) References in sub-paragraph (3) to a company do not include a
company acting in its capacity as trustee of a settlement.

(5) 40If there are two or more purchasers acting jointly, the condition in
sub-paragraph (3) is treated as met if it is met in relation to at least
one of those purchasers.

(6) In relation to a transfer of an interest in a partnership that is a
chargeable transaction by virtue of paragraph 17(2) of Schedule
4515, sub-paragraph (3) has effect as if the following were

Finance (No. 4) BillPage 614

substituted for paragraph (b) of that sub-paragraph—

(b) the purchasers (see paragraph 17(3) of Schedule 15)
include a company, or.

(7) In relation to an event that is a chargeable transaction by virtue of
5paragraph 17A(4) of that Schedule, sub-paragraph (3) has effect as
if the following were substituted for paragraph (b) of that sub-
paragraph—

(b) the purchasers (see paragraph 17A(5) of Schedule 15)
include a company, or.

(8) 10For the purposes of sub-paragraph (3), paragraph 3 of Schedule 16
(bare trustees) applies as if sub-paragraphs (2) and (3) of that
paragraph were omitted.

(9) In the case of a transaction for which the whole or part of the
chargeable consideration is rent, this paragraph has effect subject
15to section 56 and Schedule 5 (amount of tax chargeable: rent).

(10) The Treasury may by order amend this paragraph for the purpose
of limiting the circumstances in which the condition in sub-
paragraph (3) is to be treated as met.

Acquisitions of interests in the same dwelling through different transactions

(1) 20Sub-paragraphs (2) and (3) apply if—

(a) the subject-matter of a chargeable transaction includes a
chargeable interest in or over a dwelling,

(b) one or more land transactions, the subject-matter of each of
which includes a chargeable interest in or over the
25dwelling, are linked to that chargeable transaction, and

(c) the total consideration attributable to the interests
mentioned in paragraphs (a) and (b) (and to any
appurtenant rights, but disregarding any rent) is more
than £2,000,000.

(2) 30Each of those chargeable interests is treated as a higher threshold
interest for the purposes of this Schedule.

(3) If the condition in paragraph 3(3) is met in the case of the
transaction mentioned in sub-paragraph (1)(a), it is also treated as
met in the case of each transaction mentioned in sub-paragraph
35(1)(b) that is a chargeable transaction.

(4) The transactions referred to in this paragraph do not include any
transaction to which section 74 (exercise of collective rights by
tenants of flats) or section 75 (crofting community right to buy)
applies.

40Property developers

(1) A company is treated as not being a company for the purposes of
paragraph 3(3)(a) if—

(a) the company acquires the subject-matter of the chargeable
transaction in the course of a bona fide property

Finance (No. 4) BillPage 615

development business and for the sole purpose of
developing and reselling the land, and

(b) the company has carried on that business for at least two
years before the effective date of the transaction.

(2) 5Where the subject-matter of a chargeable transaction is acquired
by or on behalf of the members of a partnership, those members
are taken not to include a company for the purposes of paragraph
3(3)(b) if—

(a) that subject-matter is acquired in the course of a bona fide
10property development business and for the sole purpose of
developing and reselling the land, and

(b) the partnership has carried on that business for at least two
years before the effective date of the transaction.

(3) In relation to a transfer of an interest in a partnership that is a
15chargeable transaction by virtue of paragraph 17(2) of Schedule 15
(“the partnership transfer”) the purchasers are treated as not
including a company for the purposes of paragraph 3(3)(b) (as
modified by paragraph 3(6)) if—

(a) the acquisition effected by the land transfer referred to in
20paragraph 17(1)(a) of that Schedule was made in the course
of a bona fide property development business, and for the
sole purpose of developing and reselling the land, and

(b) the partnership is continuing to carry on that business at
the effective date of the partnership transfer, and has
25carried it on for at least two years before that date.

(4) In relation to an event that is a chargeable transaction by virtue of
paragraph 17A(4) of Schedule 15 (“the qualifying event”) the
purchasers are treated as not including a company for the
purposes of paragraph 3(3)(b) (as modified by paragraph 3(7)) if—

(a) 30the acquisition effected by the land transfer referred to in
paragraph 17A(1)(a) of that Schedule was made in the
course of a bona fide property development business, and
for the sole purpose of developing and reselling the land,
and

(b) 35the partnership is continuing to carry on that business at
the effective date of the qualifying event, and has carried it
on for at least two years before that date.

(5) A property development business is a business that consists of or
includes buying, and redeveloping for resale, residential property.

(6) 40For the purposes of sub-paragraph (1)(b) a property development
business is treated as having been carried on by the company at
any time when it was carried on by a company which is a member
of the same group as the company.

(7) Companies are members of the same group for the purposes of
45this paragraph if they are members of the same group for the
purposes of group relief (see paragraph 1 of Schedule 7).

Finance (No. 4) BillPage 616

Partnerships: application of paragraph 2 to certain transactions

(1) Sub-paragraphs (2) and (3) apply where the subject-matter of a
transaction to which Part 3 of Schedule 15 applies consists of or
includes a higher threshold interest.

(2) 5The transaction is not to be treated as a high-value residential
transaction by virtue of paragraph 2(2) unless the chargeable
consideration for the transaction is more than £2,000,000.

(3) Paragraph 2(3) to (8) does not apply to the transaction if—

(a) the subject-matter of the transaction includes a chargeable
10interest other than a higher threshold interest, and

(b) the result of applying paragraph 2(3) and (4) would be that
chargeable consideration of £2,000,000 or less would be
attributable to the separate transaction mentioned in
paragraph 2(3)(a).

(4) 15For the purposes of sub-paragraph (1) and paragraph 2, the
subject-matter (and the main subject-matter) of a transfer of an
interest in a partnership that is a chargeable transaction by virtue
of sub-paragraph (2) of paragraph 14 of Schedule 15 is—

(a) if the transfer is a Type A transfer, the relevant partnership
20property as defined in sub-paragraph (5) of that
paragraph, or

(b) if the transfer is a Type B transfer, the relevant partnership
property as defined in sub-paragraph (5A) of that
paragraph.

(5) 25For the purposes of sub-paragraph (1) and paragraph 2, the
subject-matter (and the main subject-matter) of a transfer of an
interest in a partnership that is a chargeable transaction by virtue
of sub-paragraph (2) of paragraph 17 of Schedule 15 is the subject-
matter of the land transfer referred to in sub-paragraph (1)(a) of
30that paragraph.

(6) For the purposes of sub-paragraph (1) and paragraph 2, the
subject-matter (and the main subject-matter) of a chargeable
transaction that is treated as occurring by virtue of sub-paragraph
(4) of paragraph 17A of Schedule 15 is the subject-matter of the
35land transfer referred to in sub-paragraph (1)(a) of that paragraph.

Meaning of “dwelling”

(1) This paragraph sets out rules for determining what counts as a
dwelling for the purposes of this Schedule.

(2) A building or part of a building counts as a dwelling if—

(a) 40it is used or suitable for use as a single dwelling, or

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

(3) Land that is, or is to be, occupied or enjoyed with a dwelling as a
garden or grounds (including any building or structure on such
45land) is taken to be part of that dwelling.

Finance (No. 4) BillPage 617

(4) Land that subsists, or is to subsist, for the benefit of a dwelling is
taken to be part of the dwelling.

(5) The subject-matter of a transaction is also taken to include an
interest in a dwelling if—

(a) 5substantial performance of a contract constitutes the
effective date of that transaction by virtue of a relevant
deeming provision,

(b) the main subject-matter of the transaction consists of or
includes an interest in a building, or a part of a building,
10that is to be constructed or adapted under the contract for
use as a single dwelling, and

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

(6) 15In sub-paragraph (5) “contract”, “relevant deeming provision”
and “substantially performed” have the same meaning as in
paragraph 7(5) of Schedule 6B.

(7) A building or part of a building used for a purpose specified in
section 116(2) or (3) is not used as a dwelling for the purposes of
20sub-paragraph (2) or (5).

(8) Where a building or part of a building is used for a purpose
mentioned in sub-paragraph (7), no account is to be taken for the
purposes of sub-paragraph (2) of its suitability for any other use.

(1) The Treasury may by order amend paragraph 7 so as to specify
25cases where use of a building is to be use of a building as a
dwelling for the purposes of sub-paragraph (2) or (5) of that
paragraph.

(2) The reference in section 116(8)(a) (power to amend section 116(2)
and (3)) to “the purposes of subsection (1)” includes a reference to
30the purposes of paragraph 7(2) and (5).

Interpretation

9 In this Schedule—

Higher rate of tax: exercise of collective rights by tenants of flats

(1) 45Section 74 (exercise of collective rights by tenants of flats) is amended as
follows.

Finance (No. 4) BillPage 618

(2) After subsection (1) insert—

(1A) The rate of tax is determined as follows.

(NONE) Step 1

Determine the fraction of the relevant consideration produced by
5dividing the total amount of that consideration by the number of
qualifying flats contained in the premises.

(NONE) Step 2

If the amount produced by step 1 is £2,000,000 or less, determine the
rate of tax and the tax chargeable in accordance with subsections (2)
10and (3).

(NONE) Step 3

If the amount produced by step 1 is more than £2,000,000 and the
condition in paragraph 3(3) of Schedule 4A is not met with respect to
the transaction, determine the rate of tax and the tax chargeable in
15accordance with subsections (2) and (3).

(NONE) Step 4

If the amount produced by step 1 is more than £2,000,000 and the
condition in paragraph 3(3) of Schedule 4A is met with respect to the
transaction, subsections (2) and (3) do not apply, and the amount of
20tax chargeable in respect of the transaction is 15% of the chargeable
consideration for the transaction.

(3) For subsection (2) substitute—

(2) The rate of tax is determined under section 55 by reference to the
fraction of the relevant consideration calculated under step 1 of
25subsection (1A).

Minor and consequential amendments

(1) Section 109 (general power to vary Part 4 of FA 2003 by regulations) is
amended as follows.

(2) After subsection (2) insert—

(2A) 30The power under subsection (2)(b) includes power to alter the
conditions for the application to a chargeable transaction of
paragraph 3 of Schedule 4A (higher rate for certain transactions),
other than the condition that the transaction must be a high-value
residential transaction.

(3) 35In subsection (3)—

(a) for “subsection (2)(b),” substitute “subsections (2)(b) and (2A),”,

(b) omit the “or” at the end of paragraph (a), and

(c) after that paragraph insert—

(aa) section 74(1A) (exercise of collective rights by tenants
40of flats),

(ab) Schedule 4A (amount of tax chargeable: high-value
interests in dwellings), or.

(1) Schedule 5 (amount of tax chargeable: rent) is amended as follows.

(2) In paragraph 9—

Finance (No. 4) BillPage 619

(a) in sub-paragraph (4)—

(i) after “section 55” insert “or 74(1A)”, and

(ii) after “Schedule” (in the second place it occurs) insert “4A or”,
and

(b) 5in sub-paragraph (5)—

(i) for “that section” substitute “section 55”, and

(ii) after “Schedule” (in the second place it occurs) insert “6B”.

(3) In paragraph 9A(1), for “where there is chargeable consideration other than
rent.” substitute where—

(a) 10there is chargeable consideration other than rent, and

(b) section 55 (amount of tax chargeable: general) applies to
the transaction (whether as a result of paragraph 2 of
Schedule 4A or otherwise).

8 In paragraph 2(4) of Schedule 6B (transfers involving multiple dwellings)—

(a) 15omit the “or” at the end of paragraph (a), and

(b) after that paragraph insert—

(aa) paragraph 3 of Schedule 4A applies to it, or.

(1) Schedule 15 (partnerships) is amended as follows.

(2) In paragraphs 11(2C) and 19(2C), in the substituted sub-paragraph (4)—

(a) 20after “section 55” insert “or 74(1A)”, and

(b) after “Schedule” (in the second place it occurs) insert “4A or”.

(3) In paragraph 30(2)—

(a) for “either or both” substitute “one or more”, and

(b) after paragraph (a) insert—

(aa) 25paragraph 3 of Schedule 4A applies to the
transaction;.

Application of amendments

(1) Except as mentioned in sub-paragraph (2), the amendments made by this
Schedule have effect in relation to any land transaction of which the effective
30date is on or after 21 March 2012.

(2) Those amendments do not have effect in relation to any transaction that is—

(a) effected in pursuance of a contract entered into and substantially
performed before 21 March 2012,

(b) effected in pursuance of a contract entered into before that date and
35not excluded by sub-paragraph (3), or

(c) excepted by sub-paragraph (4).

(3) A transaction effected in pursuance of a contract entered into before 21
March 2012 is excluded by this sub-paragraph if—

(a) there is any variation of the contract, or assignment (or assignation)
40of rights under the contract, on or after 21 March 2012,

(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 (or assignation), subsale
or other transaction relating to the whole or part of the subject-matter

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Contents page 510-519 520-529 530-539 540-549 550-559 560-569 570-579 580-589 590-599 600-609 610-619 620-629 630-639 640-649 650-659 660-666 Last page