|
| |
|
(c) | a person connected with a person falling within |
| |
| |
| B is the total amount of any other consideration in money or |
| |
money’s worth given as consideration under the original contract |
| |
(directly or indirectly) by— |
| 5 |
(a) | the purchaser (under the notional land transaction or, |
| |
as the case requires, the additional land transaction), |
| |
| |
(b) | a person connected with the purchaser; |
| |
| C is the amount of any consideration in money or money’s worth |
| 10 |
given for the preceding assignment of rights by— |
| |
(a) | the purchaser (under the additional land transaction), |
| |
| |
(b) | a person connected with the purchaser. |
| |
(6) | In the definition of amount C, “the preceding assignment of |
| 15 |
rights” means the assignment of rights as a result of which the |
| |
purchaser became entitled to call for a conveyance of (what |
| |
became) the subject-matter of the assignment of rights associated |
| |
with the additional land transaction. |
| |
(7) | In sub-paragraph (2) “related assignment of rights” means a |
| 20 |
transaction that is an assignment of rights in relation to the |
| |
original contract and has some subject-matter in common with the |
| |
implemented assignment of rights. |
| |
Paragraph 5: effect of rescission etc following substantial performance |
| |
6 (1) | This paragraph applies where paragraph 5(1) (transferor treated |
| 25 |
as making separate acquisition) applies by virtue of the substantial |
| |
performance by the transferee of the original contract. |
| |
(2) | If the original contract is (to any extent) subsequently rescinded or |
| |
annulled, or is for any other reason not carried into effect, the tax |
| |
paid by virtue of paragraph 5(1), and any tax paid by virtue of |
| 30 |
paragraph 5(2), must (to that extent) be repaid by HMRC. |
| |
(3) | Repayment under sub-paragraph (2) must be claimed by |
| |
amendment of the land transaction return made in respect of the |
| |
notional or additional land transaction. |
| |
Assignment of rights relating to part only of subject-matter of original contract |
| 35 |
7 | Where the transferee under the assignment of rights referred to in |
| |
paragraph 4(1) is entitled to call for the conveyance of part, but not |
| |
the whole, of the subject-matter of the original contract— |
| |
(a) | paragraph 4 applies as if the original contract, so far as |
| |
relating to that part of its subject-matter, were a separate |
| 40 |
| |
(b) | the references in paragraph 5 to the original contract are to |
| |
| |
Assignment of rights: references to “the vendor” |
| |
8 (1) | This paragraph applies where— |
| 45 |
|
| |
|
| |
|
(a) | the pre-completion transaction is an assignment of rights, |
| |
| |
(b) | either the subject-matter of the original contract is |
| |
conveyed to the transferee or the original contract is |
| |
substantially performed by the transferee. |
| 5 |
(2) | This paragraph does not apply if the original contract is itself a |
| |
| |
| See paragraphs 10 and 11 for the treatment of such cases. |
| |
(3) | In relation to a relevant land transaction, the general rule is that |
| |
references in this Part of this Act to the vendor are to be read as |
| 10 |
references to the vendor under the original contract (but see sub- |
| |
| |
(4) | In cases where the original contract was substantially performed |
| |
before the transferee became entitled to call for a conveyance of |
| |
the whole or part of the subject-matter of the original contract, |
| 15 |
references in this Part of this Act to the vendor are to be read as |
| |
references to the person who was the purchaser under the original |
| |
contract when it was substantially performed. |
| |
(5) | In relation to a relevant land transaction, references to the vendor |
| |
in the specified provisions (see sub-paragraph (6)) are to be read |
| 20 |
| |
(a) | the vendor under the original contract, and |
| |
(b) | the transferor under any relevant assignment of rights. |
| |
(6) | The specified provisions are— |
| |
(a) | section 61(1)(a) (compliance with planning obligations: |
| 25 |
conditions for exemption); |
| |
(b) | section 66(1) and (2) (transfers involving public bodies); |
| |
(c) | paragraph 8(1)(a) of Schedule 4 (debt as consideration); |
| |
(d) | paragraph 10(2)(c) of Schedule 4 (carrying out of works); |
| |
(e) | paragraph 16 of Schedule 4 (indemnity given by vendor). |
| 30 |
(7) | The following are “relevant land transactions”— |
| |
(a) | the land transaction effected by the conveyance mentioned |
| |
in sub-paragraph (1)(b) or treated as effected by the |
| |
substantial performance mentioned in that provision; |
| |
(b) | the notional land transaction mentioned in paragraph |
| 35 |
5(1)(b) and any additional land transaction under |
| |
| |
(8) | In determining under section 108(1) whether or not a relevant land |
| |
transaction such as is mentioned in sub-paragraph (7)(a) is linked |
| |
to another transaction, it may be assumed that any of the following |
| 40 |
is the vendor under the relevant land transaction— |
| |
(a) | the vendor (determined in accordance with sub-paragraph |
| |
| |
(b) | the transferor under any relevant assignment of rights. |
| |
(9) | The following are “relevant assignments of rights” in relation to a |
| 45 |
relevant land transaction— |
| |
|
| |
|
| |
|
(a) | the assignment of rights mentioned in sub-paragraph |
| |
| |
(b) | any other transaction that is an assignment of rights in |
| |
relation to the original contract and has some subject- |
| |
matter in common with the assignment of rights |
| 5 |
mentioned in paragraph (a). |
| |
Free-standing transfers: consideration and substantial performance |
| |
9 (1) | This paragraph applies where the pre-completion transaction is a |
| |
| |
(2) | If the transferee acquires the subject-matter of the free-standing |
| 10 |
transfer, the consideration for the transaction effecting that |
| |
acquisition is taken to include the consideration given for the free- |
| |
standing transfer (if that would not otherwise be the case). |
| |
(3) | References in sub-paragraph (2) to an acquisition include an |
| |
acquisition deemed to take place under section 44(4) (and the |
| 15 |
reference to the transaction effecting that acquisition is read |
| |
| |
(4) | An action taken by the transferee (or an assignee of the transferee) |
| |
that would, if taken by the original purchaser, constitute (for the |
| |
purposes of section 44(5)) the taking of possession of the whole or |
| 20 |
substantially the whole of the subject-matter of the original |
| |
contract is treated as effecting the substantial performance of the |
| |
| |
(5) | If a transaction that is a free-standing transfer in relation to a |
| |
contract is also a free-standing transfer in relation to another |
| 25 |
contract (in particular, where there have been successive free- |
| |
standing transfers), each of those contracts may be regarded as |
| |
“the original contract” for the purposes of separate applications of |
| |
| |
(6) | In sub-paragraph (4)— |
| 30 |
(a) | the reference to the transferee includes a person connected |
| |
| |
(b) | the reference to an assignee of the transferee includes a |
| |
person connected with such a person. |
| |
(7) | References in this paragraph to an assignee of the transferee are to |
| 35 |
a person who, as a result of a transaction that is an assignment of |
| |
rights in relation to the free-standing transfer, is entitled to call for |
| |
a conveyance of the whole or part of the subject-matter of the free- |
| |
| |
Meaning of “the vendor”: cases involving free-standing transfers |
| 40 |
10 (1) | This paragraph applies where— |
| |
(a) | a land transaction is effected, or treated as effected, by an |
| |
acquisition falling within paragraph 9(2) (read with |
| |
| |
(b) | paragraph 8(1) (meaning of “vendor” where the transferee |
| 45 |
is the assignee under an assignment of rights) would apply |
| |
|
| |
|
| |
|
but for paragraph 8(2) (exclusion of cases where the |
| |
original contract is itself a free-standing transfer). |
| |
(2) | In this paragraph “the relevant land transaction” means the land |
| |
| |
(a) | mentioned in sub-paragraph (1)(a), or |
| 5 |
(b) | in a case falling within sub-paragraph (1)(b), effected by |
| |
the conveyance to the transferee of the subject-matter of |
| |
the original contract or the substantial performance by the |
| |
transferee of the original contract. |
| |
(3) | References in this paragraph to “the specified transaction” are to— |
| 10 |
(a) | the free-standing transfer mentioned in paragraph 9(2), or |
| |
(b) | the original contract the subject-matter of which is |
| |
conveyed to the transferee or which is substantially |
| |
performed by the transferee. |
| |
(4) | The general rule is that in relation to the relevant land transaction |
| 15 |
references in this Part of this Act to “the vendor” are to be read as |
| |
references to the vendor or (as the case may be) transferor under |
| |
the first appropriate transaction (but see sub-paragraph (5)). |
| |
(5) | In relation to the relevant land transaction, references to the |
| |
vendor in the specified provisions (see sub-paragraph (6)) are to |
| 20 |
| |
(a) | the vendor under the first appropriate transaction, and |
| |
(b) | each person who is the transferor in the case of a relevant |
| |
pre-completion transaction. |
| |
(6) | The specified provisions are— |
| 25 |
(a) | section 61(1)(a) (compliance with planning obligations: |
| |
conditions for exemption); |
| |
(b) | section 66(1) and (2) (transfers involving public bodies); |
| |
(c) | paragraph 8(1)(a) of Schedule 4 (debt as consideration); |
| |
(d) | paragraph 10(2)(c) of Schedule 4 (carrying out of works); |
| 30 |
(e) | paragraph 16 of Schedule 4 (indemnity given by vendor). |
| |
(7) | In determining under section 108(1) whether or not the relevant |
| |
land transaction is linked to another transaction it may be |
| |
assumed that any of the following is the vendor under the relevant |
| |
| 35 |
(a) | the vendor (determined under sub-paragraph (4)), or |
| |
(b) | the transferor under any relevant pre-completion |
| |
| |
(8) | The following are “relevant pre-completion transactions” in |
| |
relation to the relevant land transaction— |
| 40 |
(a) | the specified transaction; |
| |
(b) | any other transaction that is a pre-completion transaction |
| |
in relation to the original contract and has some subject- |
| |
matter in common with the specified transaction. |
| |
|
| |
|
| |
|
Paragraph 10: “the first appropriate transaction” and “the original contract” |
| |
11 (1) | Subject to the following provisions of this paragraph, “the first |
| |
appropriate transaction” means the original contract. |
| |
(2) | If the original contract is not performed at the same time as, and in |
| |
connection with the performance of, the specified transaction, “the |
| 5 |
first appropriate transaction” means a transaction that is a pre- |
| |
completion transaction in relation to the original contract and |
| |
meets the following conditions. |
| |
(3) | The conditions are that the pre-completion transaction— |
| |
(a) | is performed at the time when the specified transaction is |
| 10 |
performed and (if it is not itself the specified transaction) is |
| |
performed in connection with the performance of the |
| |
| |
(b) | is a transaction on which the entitlement of the transferee |
| |
to call for the conveyance of the subject-matter of the |
| 15 |
specified transaction depends, and |
| |
(c) | is not preceded by another pre-completion transaction |
| |
meeting the conditions in paragraphs (a) and (b). |
| |
(4) | For the purposes of this paragraph— |
| |
(a) | a contract for a land transaction is taken to be “performed” |
| 20 |
when it is substantially performed or completed |
| |
| |
(b) | a free-standing transfer other than a contract is taken to be |
| |
“performed” when the transferee under that free-standing |
| |
transfer (or an assignee of that transferee, as defined in |
| 25 |
paragraph 9(7)) acquires the subject-matter of that free- |
| |
| |
(5) | Where the specified transaction is a pre-completion transaction in |
| |
relation to each of two or more contracts such as are mentioned in |
| |
paragraph 1(1)(a) that together form a series of such contracts |
| 30 |
(each having some subject-matter in common with all the others), |
| |
references in paragraph 10 and this paragraph to “the original |
| |
contract” are to be read as references to the first contract in that |
| |
| |
(6) | In this paragraph “the specified transaction” has the meaning |
| 35 |
given by paragraph 10(3). |
| |
Minimum consideration rule |
| |
12 (1) | This paragraph applies where either of the following provisions |
| |
| |
(a) | paragraph 4(3) (assignment of rights: chargeable interest |
| 40 |
acquired or treated as acquired by transferee); |
| |
(b) | paragraph 9(2) (free-standing transfers: chargeable interest |
| |
acquired or treated as acquired by transferee). |
| |
(2) | If there is a relevant connection between parties, then for the |
| |
purposes of paragraph 1(1) of Schedule 4 the consideration given |
| 45 |
by the purchaser for the subject-matter of the land transaction |
| |
referred to in paragraph 4(4) or 9(2) is taken to be— |
| |
|
| |
|
| |
|
(a) | the amount that it would be apart from this sub- |
| |
| |
(b) | (if higher) the first minimum amount, or |
| |
(c) | (if higher than both those amounts) the second minimum |
| |
| 5 |
(3) | There is a “relevant connection between parties” if— |
| |
(a) | the persons who are the transferor and transferee in |
| |
relation to the pre-completion transaction mentioned in |
| |
paragraph 4(1) or 9(1) (“the implemented transaction”) are |
| |
connected with each other, or are not acting at arm’s |
| 10 |
| |
(b) | sub-paragraph (4) applies. |
| |
(4) | This sub-paragraph applies if— |
| |
(a) | the implemented transaction is one in a chain of successive |
| |
transactions (all having at least part of their subject-matter |
| 15 |
in common) that are pre-completion transactions in |
| |
relation to the original contract, and |
| |
(b) | a person who is the transferor in relation to a pre- |
| |
completion transaction that precedes the implemented |
| |
transaction in the chain of transactions is connected with, |
| 20 |
or not acting at arm’s length in relation to, the transferee |
| |
under the implemented transaction. |
| |
(5) | Where the implemented transaction is a pre-completion |
| |
transaction in relation to— |
| |
(a) | a contract for a land transaction that is not itself a free- |
| 25 |
standing transfer in relation to any other contract, and |
| |
(b) | a contract, or two or more successive contracts, that are |
| |
themselves free-standing transfers in relation to the |
| |
contract mentioned in paragraph (a), |
| |
| references in this paragraph to “the original contract” are to the |
| 30 |
contract mentioned in paragraph (a) (and do not include any |
| |
contract mentioned in paragraph (b)). |
| |
| |
13 (1) | “The first minimum amount” means— |
| |
(a) | if the chargeable interest acquired (or treated as acquired) |
| 35 |
under the land transaction referred to in paragraph 4(4) or |
| |
9(2) is the whole subject-matter of the original contract, the |
| |
amount of any consideration (in money or money’s worth) |
| |
agreed to be given, under the terms of the original contract, |
| |
for the acquisition of that subject-matter, or |
| 40 |
(b) | if paragraph (a) does not apply, so much of the amount |
| |
mentioned in paragraph (a) as is referable, on a just and |
| |
reasonable apportionment, to the chargeable interest |
| |
mentioned in that paragraph. |
| |
| This is subject to sub-paragraph (2). |
| 45 |
(2) | If conditions A to C are met, “the first minimum amount” means |
| |
the amount of any consideration (in money or money’s worth) |
| |
agreed, under the terms of the transfer to the first T, to be given in |
| |
|
| |
|
| |
|
respect of the subject-matter of that transaction (including any |
| |
consideration relating to an obligation of the transferor under the |
| |
transfer to the first T). |
| |
(3) | The conditions mentioned in sub-paragraph (2) are as follows. |
| |
Condition A is that the pre-completion transaction referred to |
| 5 |
in paragraph 4(4) or 9(2) is one of a chain of successive |
| |
transactions (all having at least part of their subject-matter |
| |
in common) that are pre-completion transactions in |
| |
relation to the original contract. |
| |
Condition B is that a person (“T”) is the transferor under a |
| 10 |
pre-completion transaction that forms part of that chain |
| |
and T is connected with, or not acting at arm’s length in |
| |
| |
(a) | the transferee under that transaction, or |
| |
(b) | the transferee under a subsequent transaction in the |
| 15 |
| |
Condition C is that having regard to all the circumstances it |
| |
would not be reasonable to conclude that the obtaining of |
| |
a tax advantage (for any person) was the main purpose, or |
| |
one of main purposes, of T in entering into— |
| 20 |
(a) | any pre-completion transaction in the chain, or |
| |
(b) | any arrangements of which such a transaction forms |
| |
| |
(4) | Where conditions A to C are met, “the first T” means— |
| |
(a) | if condition B is met in relation to only one pre-completion |
| 25 |
| |
(b) | if condition B is met in relation to more than one pre- |
| |
completion transaction in the chain, the transferor in |
| |
relation to the first of the pre-completion transactions in |
| |
relation to which condition B is met. |
| 30 |
(5) | In this paragraph “the transfer to the first T” means— |
| |
(a) | the pre-completion transaction under which the first T is |
| |
| |
(b) | the original contract (if T is the original purchaser). |
| |
| 35 |
(a) | references to “the original contract” are to be read in |
| |
accordance with paragraph 12(5) (and references to the |
| |
original purchaser are to be read accordingly); |
| |
(b) | “tax advantage” has the same meaning as in paragraph 18. |
| |
The second minimum amount |
| 40 |
14 (1) | In paragraph 12 “the second minimum amount” means the total of |
| |
the net amounts of consideration given by the relevant parties. |
| |
(2) | The net amount of consideration given by any relevant party is— |
| |
| |
|
| |
|