Finance Bill

Session 2013 - 14
Internet Publications
Other Bills before Parliament

Finance Bill

Finance Bill
Schedule 38 — Stamp duty land tax: relief from 15% rate
454

(a)
the higher threshold interest (if still held by the purchaser),
is being exploited as a source of income in the course of a
qualifying trade, and
(b)
any chargeable interest derived from that interest that may
be held by the purchaser is being exploited as mentioned
5
in paragraph (a).
      (4)
The requirements in sub-paragraph (3) do not apply in relation to
times when, because of a change of circumstances that is
unforeseen and beyond the purchaser’s control, it is not
reasonable to expect the chargeable interest concerned to be
10
exploited in the manner specified.
      (5)
Sub-paragraph (6) applies if at some time in the control period the
higher threshold interest, or a chargeable interest derived from
it—
(a)
has not begun to be exploited as mentioned in sub-
15
paragraph (3), or
(b)
has ceased to be so exploited.
      (6)
The requirements in sub-paragraph (3) are treated as being met if
reasonable steps are being taken to ensure that the chargeable
interest in question begins to be exploited as mentioned in that
20
sub-paragraph, or that such exploitation of the interest is resumed.
5I    (1)
This paragraph applies where relief under paragraph 5C (financial
institutions acquiring dwellings in the course of lending) has been
allowed in respect of a higher threshold interest forming the
whole or part of the subject-matter of a chargeable transaction.
25
      (2)
The relief is withdrawn if any requirement in sub-paragraph (3) is
not met at any time in the period of three years beginning with the
effective date of the chargeable transaction (“the control period”)
(but see sub-paragraphs (4) and (5)).
      (3)
The requirements are that—
30
(a)
the purchaser continues to be a financial institution
carrying on a business that involves the lending of money,
and
(b)
the interest is held for the purpose of resale in the course of
the business.
35
      (4)
The requirements in sub-paragraph (3) apply only to times in the
control period when the purchaser holds—
(a)
the higher threshold interest, or
(b)
a chargeable interest that is derived from the higher
threshold interest.
40
      (5)
The requirements in sub-paragraph (3) do not apply in relation to
times when, because of a change of circumstances that is
unforeseen and beyond the purchaser’s control, it is not
reasonable to expect those requirements to be met.
5J    (1)
This paragraph applies where relief under paragraph 5D
45
(dwellings for occupation by certain employees etc) has been
allowed in respect of a higher threshold interest forming the
whole or part of the subject-matter of a chargeable transaction.

Finance Bill
Schedule 38 — Stamp duty land tax: relief from 15% rate
455

      (2)
The relief is withdrawn if any requirement in sub-paragraph (3) is
not met at any time in the period of three years beginning with the
effective date of the chargeable transaction (“the control period”)
(but see sub-paragraphs (4) and (5)).
      (3)
The requirements are that—
5
(a)
the purchaser, or a relevant group member (as defined in
paragraph 5D(6)), carries on a trade on a commercial basis
and with a view to profit,
(b)
the dwelling is made available as mentioned in paragraph
5D(2)(a), and
10
(c)
the dwelling is made so available for purposes that are
solely or mainly purposes of the trade mentioned in
paragraph (a) of this sub-paragraph.
      (4)
The requirements in sub-paragraph (3) apply only to times in the
control period when the purchaser holds—
15
(a)
the higher threshold interest, or
(b)
a chargeable interest that is derived from the higher
threshold interest.
      (5)
The requirements in sub-paragraph (3) do not apply in relation to
times when, because of a change of circumstances that is
20
unforeseen and beyond the purchaser’s control, it is not
reasonable to expect those requirements to be met.
      (6)
Sub-paragraph (7) applies if at some time in the control period the
dwelling—
(a)
has not begun to be made available as mentioned in sub-
25
paragraph (3)(b) and (c), or
(b)
has ceased to be so made available.
      (7)
The requirements in paragraphs (b) and (c) of sub-paragraph (3)
are treated as being met if reasonable steps are being taken to
ensure that the dwelling will begin to be, or will return to being,
30
available as mentioned in those paragraphs.
5K    (1)
This paragraph applies where relief under paragraph 5F
(farmhouses) has been allowed in respect of a higher threshold
interest forming the whole or part of the subject-matter of a
chargeable transaction.
35
      (2)
The relief is withdrawn if at any time in the period of three years
beginning with the effective date of the chargeable transaction
(“the control period”) the requirements in sub-paragraph (3) are
not met (but see sub-paragraphs (4) and (5)).
      (3)
The requirements are that—
40
(a)
the land mentioned in paragraph 5F(2)(a) is occupied for
the purposes of a qualifying trade of farming, and
(b)
the dwelling is occupied for the purposes of that trade by
a qualifying farm worker.
      (4)
The requirements in sub-paragraph (3) apply only to times in the
45
control period when the purchaser holds—
(a)
the higher threshold interest, or

Finance Bill
Schedule 38 — Stamp duty land tax: relief from 15% rate
456

(b)
a chargeable interest that is derived from the higher
threshold interest.
      (5)
The requirements in sub-paragraph (3) do not apply in relation to
times when, because of a change of circumstances that is
unforeseen and beyond the purchaser’s control, it is not
5
reasonable to expect those requirements to be met.
      (6)
Sub-paragraph (7) applies if at some time in the control period a
requirement in sub-paragraph (3)—
(a)
has not begun to be met, or
(b)
has ceased to be met.
10
      (7)
The requirement is treated as being met if reasonable steps are
being taken to ensure that the requirement begins to be met, or is
again met.”
      (5)
After paragraph 6 insert—
“Modifications for cases involving alternative finance arrangements
15
6A    (1)
This paragraph applies where—
(a)
section 71A (land sold to financial institution and leased to
person), section 72 (land sold in Scotland sold to financial
institution and leased to person) or section 73 (land sold to
financial institution and re-sold to person) applies, and
20
(b)
the major interest in land purchased under the first
transaction consists of or includes a higher threshold
interest.
      (2)
In this paragraph “the first transaction” means—
(a)
where section 71A applies, the transaction mentioned in
25
section 71A(1)(a);
(b)
where section 72 applies, the transaction mentioned in
section 72(1)(a);
(c)
where section 73 applies, the transaction mentioned in
section 73(1)(a)(i).
30
      (3)
The condition in paragraph 3(3) is treated as being met with
respect to the first transaction only if that condition is met with
respect to the second transaction.
      (4)
If the second transaction would qualify for relief under any of
paragraphs 5(1), 5B(1), 5D(1) and 5F(1) (disregarding the
35
exemptions in sections 71A(3), 72(3) and 73(3) and assuming, for
this purpose, that the subject-matter of the second transaction is a
higher threshold interest), the first transaction is taken to qualify
for relief under the same provision (and accordingly paragraph 3
does not apply in relation to the first transaction).
40
      (5)
The first transaction does not qualify for relief under any of
paragraphs 5(1), 5B(1), 5D(1) or 5F(1) except in accordance with
sub-paragraph (4).
      (6)
In this paragraph “the second transaction” has the same meaning
as in section 71A, 72 or 73 (as the case requires).
45

Finance Bill
Schedule 38 — Stamp duty land tax: relief from 15% rate
457

6B    (1)
This paragraph applies where section 72A (land in Scotland sold
to financial institution and person in common) applies and the
major interest in land purchased under the transaction mentioned
in section 72A(1)(a) (“the first transaction”) consists of or includes
a higher threshold interest.
5
      (2)
In determining whether or not the first transaction meets the
condition in paragraph 3(3) it is to be assumed that the financial
institution referred to in section 72A(1) is not one of the persons
acquiring the major interest in land under that transaction.
      (3)
Paragraphs 5 to 5F have effect in relation to the first transaction as
10
they would have effect if the financial institution were not a
purchaser under that transaction.
Paragraphs 6A and 6B: application where transaction is split under paragraph 2(3)
6C    (1)
Where paragraph 6A or 6B (“the modifying paragraph”) applies
and the first transaction (within the meaning of that paragraph) is
15
treated under paragraph 2(3) as two separate chargeable
transactions, references in the modifying paragraph to the first
transaction include those separate transactions.
      (2)
If the subject-matter of the second transaction (within the meaning
of paragraph 6A) includes a chargeable interest other than a
20
higher threshold interest, that fact is ignored in determining for
the purposes of paragraph 6A—
(a)
whether that transaction meets the condition in paragraph
3(3), or
(b)
whether it would qualify for relief under any of
25
paragraphs 5(1), 5B(1), 5D(1) and 5F(1).
Alternative finance arrangements: withdrawal of relief
6D    (1)
This paragraph applies where relief under paragraph 5
(businesses of letting, trading in or developing properties) has
been allowed, in accordance with paragraph 6A(4) or 6B(3), with
30
respect to the purchase of a major interest in land.
      (2)
The relief is withdrawn if at any time in the period of three years
beginning with the effective date of the first transaction (“the
control period”) a relevant requirement is not met.
      (3)
The relevant requirements are that—
35
(a)
any relevant interest (see sub-paragraphs (5) and (6)) held
by the relevant person is held by that person exclusively
for one or more of the purposes mentioned in paragraph
5(1), and
(b)
(if a relevant interest is held by the relevant person) no
40
non-qualifying individual is permitted to occupy the
dwelling.
      (4)
For the purposes of sub-paragraph (3)(a) and (b) it does not matter
whether the relevant interest is held by the relevant person—
(a)
jointly or (in Scotland) in common, or
45
(b)
otherwise.

Finance Bill
Schedule 38 — Stamp duty land tax: relief from 15% rate
458

      (5)
In relation to relief allowed in accordance with sub-paragraph
6A(4), “relevant interest” means any of the following—
(a)
the interest acquired under the second transaction (within
the meaning of paragraph 6A);
(b)
any interest transferred to the relevant person as a result of
5
the exercise of the right mentioned in section 71A(1)(d) or
72(1)(c);
(c)
any chargeable interest derived from an interest such as is
mentioned in paragraph (a) or (b).
      (6)
In relation to relief allowed in accordance with paragraph 6B(3),
10
“relevant interest” means any of the following—
(a)
the interest purchased under the first transaction (within
the meaning of paragraph 6B);
(b)
any interest transferred to the relevant person as a result of
the exercise of the right mentioned in section 72A(1)(c);
15
(c)
any chargeable interest derived from an interest such as is
mentioned in paragraph (a) or (b).
      (7)
In this paragraph—
“non-qualifying individual” (in relation to the chargeable
transaction mentioned in sub-paragraph (1)) has the
20
meaning given by paragraph 5A;
“the relevant person” means the person (other than the
financial institution) who entered into the arrangements in
question as mentioned in section 71A(1), 72(1), 72A(1) or
73(1).
25
6E    (1)
The requirement in paragraph 6D(3)(a) does not apply in relation
to times when, because of a change of circumstances that is
unforeseen and beyond the relevant person’s control, it is not
reasonable to expect the interest in question to be held for the
purpose for which the relevant person acquired that person’s
30
initial interest.
      (2)
Sub-paragraph (3) applies if the relevant person’s initial interest
was acquired by the relevant person for a purpose mentioned in
paragraph 5(1), but at some time in the control period the activity
in question (for instance, exploitation as mentioned in paragraph
35
5(1)(a))—
(a)
has not begun in the case of a relevant interest, or
(b)
has ceased in the case of a relevant interest.
      (3)
For the purposes of paragraph 6D(3)(a) the relevant interest is
taken to be held for the purpose in question only if reasonable
40
steps are being taken to ensure that the purpose in question is
carried out.
      (4)
In this paragraph—
(a)
“the control period”, “relevant interest” and “the relevant
person” have the same meaning as in paragraph 6D;
45
(b)
references to the relevant person’s “initial interest” are to
the interest mentioned in sub-paragraph (5)(a) or (6)(a) of
paragraph 6D (as the case requires).

Finance Bill
Schedule 38 — Stamp duty land tax: relief from 15% rate
459

6F    (1)
This paragraph applies where relief under paragraph 5B (trades
involving making a dwelling open to the public) has been allowed,
in accordance with paragraph 6A(4) or 6B(3), with respect to the
purchase of a major interest in land.
      (2)
The relief is withdrawn if at any time in the period of three years
5
beginning with the effective date of the first transaction (“the
control period”) the requirement in sub-paragraph (3) is not met.
      (3)
The requirement is that the dwelling is being exploited as a source
of income in the course of a qualifying trade.
      (4)
The requirement in sub-paragraph (3) does not apply in relation to
10
times when, because of a change of circumstances that is
unforeseen and beyond the relevant person’s control, it is not
reasonable to expect the interest in question to be exploited as
mentioned in that sub-paragraph.
      (5)
Sub-paragraph (6) applies if at some time in the control period that
15
person—
(a)
has not begun to exploit the interest as a source of income
in the course of a relevant trade, or
(b)
has ceased so to exploit it.
      (6)
The requirement in sub-paragraph (3) is treated as being met if
20
reasonable steps are being taken to ensure that the relevant
interest begins to be exploited as mentioned in that sub-
paragraph, or that such exploitation of the interest is resumed.
      (7)
In this paragraph—
(a)
“the relevant person” means the person (other than the
25
financial institution) who enters into the arrangements
mentioned in section 71A(1), 72(1), 72A(1) or 73(1);
(b)
references to a major interest in land include an undivided
share in a major interest in land.
6G    (1)
This paragraph applies where relief under paragraph 5D
30
(dwellings for occupation by certain employees etc) has been
allowed, in accordance with paragraph 6A(4) or 6B(3), with
respect to the purchase of a major interest in land.
      (2)
The relief is withdrawn if at any time in the control period when
the relevant person holds a relevant interest (whether jointly, or in
35
common, or otherwise) any requirement in sub-paragraph (4) is
not met.
      (3)
In sub-paragraph (2) “the control period” means the three years
beginning with the effective date of the first transaction.
      (4)
The requirements are that—
40
(a)
the relevant person, or a relevant group member, carries
on a qualifying trade,
(b)
the dwelling is made available as mentioned in paragraph
5D(2)(a), and
(c)
the dwelling is made so available for purposes that are
45
solely or mainly purposes of the trade mentioned in sub-
paragraph (a).

Finance Bill
Schedule 38 — Stamp duty land tax: relief from 15% rate
460

      (5)
The requirements in sub-paragraph (4) do not apply in relation to
times when, because of a change of circumstances that is
unforeseen and beyond the relevant person’s control, it is not
reasonable to expect those requirements to be met.
      (6)
Sub-paragraph (7) applies if at some time in the control period the
5
relevant interest—
(a)
has not begun to be made available as mentioned in sub-
paragraph (4)(b) and (c), or
(b)
has ceased to be so made available.
      (7)
The requirements in paragraphs (b) and (c) of sub-paragraph (4)
10
are treated as being met if reasonable steps are being taken to
ensure that the dwelling will begin to be, or will return to being,
made available as mentioned in those paragraphs.
      (8)
Where the relevant person is a company, “relevant group
member” means a company which is a member of the same group
15
of companies as the relevant person for the purposes mentioned in
paragraph 1(2) of Schedule 7.
      (9)
In this paragraph—
(a)
“relevant interest” has the same meaning as in paragraph
6D;
20
(b)
“the relevant person” means the person (other than the
financial institution) who enters into the arrangements
mentioned in section 71A(1), 72(1), 72A(1) or 73(1);
(c)
references to a major interest in land include an undivided
share in a major interest in land.
25
6H    (1)
This paragraph applies where relief under paragraph 5F
(farmhouses) has been allowed, in accordance with paragraph
6A(4) or 6B(3), in relation to the purchase of a major interest in
land.
      (2)
The relief is withdrawn if at any time in the control period when
30
the relevant person holds a relevant interest (whether jointly, or in
common, or otherwise) any requirement in sub-paragraph (4) is
not met.
      (3)
In sub-paragraph (2) “the control period” means the three years
beginning with the effective date of the first transaction.
35
      (4)
The requirements are that—
(a)
the land mentioned in paragraph 5F(2) is occupied for the
purposes of a qualifying trade of farming, and
(b)
the dwelling is occupied for the purposes of that trade by
a qualifying farm worker.
40
      (5)
The requirements in sub-paragraph (4) do not apply in relation to
times when, because of a change of circumstances that is
unforeseen and beyond the relevant person’s control, it is not
reasonable to expect those requirements to be met.
      (6)
Sub-paragraph (7) applies if at some time in the control period a
45
requirement in sub-paragraph (4)—
(a)
has not begun to be met, or