(9) In this section—

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

(b) “contract” includes any agreement;

(c) 5“conveyance” includes any instrument;

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

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

121 10Contract and conveyance: the vendor

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

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

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

(2) V is not regarded as disposing of a chargeable interest by reason of entering
15into the contract.

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

(4) Accordingly, where subsection (3) applies and the contract is subsequently
20completed by a conveyance, that completion is not treated for the purposes of
section 99 as effecting the disposal of a chargeable interest.

(5) Where subsection (3) applies and—

(a) the contract is afterwards rescinded or annulled, or

(b) performance of the contract is for any other reason terminated before
25the contract has been carried fully into effect,

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

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

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

(b) 30(as the case requires) the time when performance of the contract ceases.

(7) Where subsection (3) applies and the contract is afterwards varied (or partially
rescinded) so that the chargeable interest to be disposed of under the contract
is not the same as the chargeable interest to which the contract originally
related, this Part (including subsection (3)) has effect as if the variation of the
35contract effected—

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

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

(8) If the parties to the contract proceed as if they had varied the contract in the
40way mentioned in subsection (7) (without actually doing so), subsection (7)
applies as if they had actually made the corresponding variation in the terms
of the contract.

(9) In this section—

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

(b) “contract” includes any agreement;

(c) 5“conveyance” includes any instrument;

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

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

10New dwellings, conversions, demolition etc

122 New dwellings

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

(a) 15the completion day;

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

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

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

(b) 20does not include a case to which section 123 (dwellings produced from
other dwellings) or section 126 (demolition and replacement: new
dwellings) applies.

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

(a) 25Part 1 of the Local Government Finance Act 1992 (council tax: England
and Wales) (see section 17 of that Act), or

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

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

(4) 30In this section “building” includes a part of a building.

123 Dwellings produced from other dwellings

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

(2) 35Any question as to whether or not a person has a single-dwelling interest at
any time either in the old dwelling (or dwellings) or in a new dwelling is
determined on the assumption that the old dwelling (or dwellings) cease to
exist, and any new dwelling come into existence, only when the conversion is
completed.

(3) 40The day after the conversion is completed is a valuation date in the case of any
single-dwelling interest in a new dwelling.

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

day on which all the new dwellings are treated as having come into existence)
for the purposes of—

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

(b) 5Part 2 of that Act (council tax: Scotland) (see section 83 of that Act), or

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

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

124 Demolition of a dwelling

(1) 10This section and sections 125 to 127 apply where a building that is a dwelling
(“the old dwelling”) is demolished after 1 April 2013.

(2) Except so far as express provision to the contrary is made in sections 125 to 127,
any question as to whether a person has a single-dwelling interest in the
dwelling, and any question as to the taxable value of such an interest, is
15determined as if the dwelling had not been demolished.

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

(a) the demolition has begun, and

(b) 20as a result, the building is no longer suitable for use as a dwelling.

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

125 Demolition without replacement

(1) Subsection (2) applies if a person entitled to a single-dwelling interest in the old
dwelling notifies an officer of Revenue and Customs that to the best of the
25person’s knowledge there is no proposal to construct any dwelling or
dwellings on the site of the old dwelling.

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

(3) 30That day is the first day on which—

(a) the demolition has begun, and

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

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

(a) 35in an annual tax on enveloped dwellings return, or

(b) by amending such a return.

(5) In this section—

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

(b) “the site of the old dwelling” means the land on which the dwelling
40stood and that counted as part of the dwelling;

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

126 Demolition and replacement: new dwellings

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

(2) Any question as to whether or not a person has a single-dwelling interest at
5any time either in the old dwelling or in a new dwelling is determined on the
assumption that the old dwelling ceases to exist, and the new dwellings come
into existence, only when the rebuilding is completed.

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

(4) 10In subsection (1)—

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

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

(5) 15References to when the rebuilding is completed are to the end of whichever of
the following days is earlier—

(a) the completion day;

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

(6) 20The reference in subsection (5) to the “completion day” is to the day on which
the new dwelling is treated as having come into existence (or the first day on
which all the new dwellings are treated as having come into existence) for the
purposes of—

(a) Part 1 of the Local Government Finance Act 1992 (council tax: England
25and Wales) (see section 17 of that Act), or

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

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

127 Demolition and replacement: other cases

(1) 30This section applies if—

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

(b) section 126 does not apply.

(2) Any question as to whether a person has a single-dwelling interest in the old
35dwelling 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) 40“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.

128 Conversion of dwelling for non-residential use

(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
5as 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
10planning permission or development 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) 15“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) 20in relation to land in Northern Ireland, Article 2(2) of the Planning
(Northern Ireland) Order 1991 (S.I. 1991/1220 (N.I. 11)S.I. 1991/1220 (N.I. 11)).

(6) In this section “development consent” means development consent under the
Planning Act 2008.

129 Damage to a dwelling

(1) 25This 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 110) only if the
first and second conditions are met.

(3) 30The 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
35is 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) 40work done in that period to restore the building to suitability for use as
a dwelling does not count, for the purposes of section 110 or 111, 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) 5In 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
10subsection (4).

Reliefs

130 Effect of reliefs under sections 131 to 150

(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
15relievable 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) 20The provisions are—

• section 131 (property rental businesses);

• section 132 (rental property: preparation for sale etc);

• section 135 (dwellings opened to the public);

• section 136 (property developers);

• 25section 137 (property developers: exchange of dwellings);

• section 139 (property traders);

• section 141 (financial institutions);

• section 143 (occupation by certain employees or partners);

• section 146 (farmhouses);

• 30section 148 (charitable companies);

• section 150 (providers of social housing).

(4) See also section 103 (adjustment of amount chargeable and claim for relief).

131 Property rental businesses

(1) A day in a chargeable period is relievable in relation to a single-dwelling
35interest 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
40delay, 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 132 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
5business 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 (4) 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 (4) is determined without reference to
10whether 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
15as 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.

132 Rental property: preparation for sale, demolition etc

(1) A day (“day X”) on which a person (“P”) is entitled to a single-dwelling interest
20is 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 131 in relation to the interest and on which P,
25or 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
30be 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, and

• 35if 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—

• 40steps are being taken to secure that the dwelling will be converted into
  a different dwelling without undue delay, and

• it 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
5the 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 131, 135, 143 and 146.

(3) In this section—

• 10“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
  15justified by commercial considerations, or cannot be avoided.

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

(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
20is being exploited as mentioned in section 131(1)(a), or steps are being
taken to secure that the interest will be so exploited, as mentioned in
section 131(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
25chargeable periods, that meets the continuity of ownership condition and
would (in the absence of this subsection) be relievable by virtue of section
131(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) 30A 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) 35Subsection (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 131(1)(b) or 132 if a relevant person is entitled
40to 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
45partnership 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 131(1)(a) falls between that earlier day and the
day of non-qualifying occupation.

(8) For the purposes of this section—

(a) 5“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
131(1)(a);

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

134 10Meaning of “non-qualifying individual” and “qualifying individual”

(1) In sections 131 and 133 “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) 15an 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) 20an 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
25civil 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
30investment scheme or is connected with a major participant in a
relevant collective investment scheme.

(2) In section 133 “qualifying individual”, in relation to a single-dwelling interest,
means an individual other than a non-qualifying individual.

(3) In subsection (1)(c) “qualifying member”, in relation to a partnership, means an
35member 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.

(4) In subsection (1)(i) “relevant collective investment scheme”, in relation to a
single-dwelling interest, means a collective investment scheme that meets the
40ownership condition with respect to the interest.

(5) 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
45scheme 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.

(6) The reference in subsection (5)(a) to profits or income arising from the scheme
5is to profits or income arising from the acquisition, holding, management or
disposal of the property subject to the scheme.

(7) For the purpose of subsection (1), section 1122 of CTA 2010 (as applied by
section 170) has effect as if subsections (7) and (8) of that section (application of
rules about connected persons to partnerships) were omitted.

(8) 10In 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).

(9) In subsection (1)(d) “trustee” is to be read in accordance with section 1123(3) of
15CTA 2010 (“connected persons”: supplementary).

135 Dwellings opened to the public

(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
20in 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
25exploited 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
30basis 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) 35The 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.

136 Property developers

(1) A day in a chargeable period is relievable in relation to a single-dwelling
40interest 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.