Session 2013 - 14
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Other Bills before Parliament

Finance Bill


Finance Bill
Part 3 — Annual tax on enveloped dwellings

88

 

(a)   

on a commercial basis, and

(b)   

with a view to profit.

(4)   

In this section—

“farming” has the same meaning as in the Corporation Tax Acts (see

section 1125 of CTA 2010), except that in this section “farming” includes

5

market gardening;

“market gardening” has the same meaning as in the Corporation Tax Acts

(see section 1125(5) of CTA 2010).

147     

“Farm worker” and “former long-serving farm worker”

(1)   

An individual is a “farm worker” in relation to the qualifying trade of farming

10

mentioned in section 146(1) at any time when the individual has a substantial

involvement in—

(a)   

the day-to-day work of the trade, or

(b)   

the direction and control of the conduct of the trade.

(2)   

Where section 146 applies, an individual occupying the farmhouse on the day

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mentioned in section 146(1) is a “former long-serving farm worker” if the

individual had, before that day, been a farm worker in relation to the

qualifying trade of farming for—

(a)   

a qualifying period of 3 or more years, or

(b)   

qualifying periods together amounting to 3 or more years within a 5

20

year period.

(3)   

In subsection (2) “qualifying period” means a period throughout which—

(a)   

the individual occupied the farmhouse for the purposes of the trade,

(b)   

the land of which the farmhouse forms part was occupied for the

purposes of the trade,

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(c)   

the trade was carried on by—

(i)   

a person who is entitled to the single-dwelling interest in the

farmhouse on the day mentioned in section 146(1), or

(ii)   

a person connected with such a person, and

(d)   

a person who is entitled to the single-dwelling interest in the farmhouse

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on the day mentioned in section 146(1) was entitled to that interest.

(4)   

A person occupying part of a dwelling is regarded as occupying the dwelling

for the purposes of this section and section 146.

148     

Charitable companies

(1)   

A day in a chargeable period is relievable in relation to a single-dwelling

35

interest if on that day—

(a)   

a charitable company is entitled to the interest, and

(b)   

the interest is held by the charitable company for qualifying charitable

purposes.

(2)   

The interest is “held for qualifying charitable purposes” if it is held—

40

(a)   

for use in furtherance of the charitable purposes of the charitable

company or of another charity, or

(b)   

as an investment from which the profits are (or are to be) applied to the

charitable purposes of the charitable company.

 
 

Finance Bill
Part 3 — Annual tax on enveloped dwellings

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(3)   

A day is not relievable by virtue of subsection (1) if on that day an individual

who is a substantial donor, or the associate of a substantial donor, is permitted

to occupy the dwelling.

(4)   

Where subsection (3) applies in relation to a day in a chargeable period, this

section has effect in relation to the charitable company as if the individual had

5

been permitted to occupy the dwelling throughout—

(a)   

that chargeable period,

(b)   

the preceding chargeable period, and

(c)   

the 3 chargeable periods following the period mentioned in paragraph

(a).

10

(5)   

For the purposes of this section an individual is a substantial donor to a

charitable company for a chargeable period if—

(a)   

the charitable company receives gifts of at least £50,000 from the

individual in the chargeable period, or

(b)   

the charitable company receives gifts of at least £150,000 from the

15

individual in a period of 6 years in which the chargeable period wholly

or partly falls.

(6)   

If an individual is a substantial donor to a charitable company for a chargeable

period (“the affected period”) as a result of subsection (5)(a) or (b), the

individual is also a substantial donor to the charitable company for—

20

(a)   

the chargeable period preceding the affected period, and

(b)   

each of the 5 chargeable periods following the affected period.

(7)   

For the purposes of subsection (3) it does not matter whether the conditions as

a result of which the individual is a substantial donor for the chargeable period

are met before or on or after the day in question.

25

(8)   

For the purposes of subsection (5) a charitable company and any other charities

with which it is connected are to be treated as a single charitable company.

(9)   

For the purposes of subsection (8)—

(a)   

“connected” means connected in a matter relating to the structure,

administration or control of the charity, and

30

(b)   

section 170 does not apply.

149     

Section 148: supplementary

(1)   

In section 148 “associate”, in relation to a substantial donor to a charitable

company, means any of the following—

(a)   

an individual (“a connected person”) who is connected with the

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substantial donor,

(b)   

an individual who is the settlor in relation to a settlement of which a

trustee is (in the capacity of trustee) connected with the substantial

donor,

(c)   

the spouse or civil partner of a connected person or of a relevant settlor,

40

(d)   

a relative of a connected person or of a relevant settlor, or the spouse or

civil partner of a relative of a connected person or of a relevant settlor,

(e)   

a relative of the spouse or civil partner of a connected person or of a

relevant settlor, or

(f)   

the spouse or civil partner of a person falling within paragraph (e).

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(2)   

In subsection (1)—

 
 

Finance Bill
Part 3 — Annual tax on enveloped dwellings

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“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).

(3)   

In subsection (1)(b) “trustee” is to be read in accordance with section 1123(3) of

CTA 2010 (“connected persons”: supplementary).

5

(4)   

In section 148 a reference to a gift of a specified amount includes a reference to

a non-monetary gift of that value.

(5)   

For the purposes of section 148 occupation of any part of a dwelling is regarded

as occupation of the dwelling.

(6)   

The power of the Treasury under section 510(3) of CTA 2010 to vary by

10

regulations a sum, or a period of time, specified in section 502(2) of that Act

includes power to vary a sum, or a period of time, specified in section 148(5);

and under section 510(3), as extended by this section, different provision may

be made for the purposes of section 148 and other purposes.

150     

Providers of social housing

15

(1)   

A day in a chargeable period is relievable in relation to a single-dwelling

interest if on that day—

(a)   

a profit-making registered provider of social housing (P) is entitled to

the interest, and

(b)   

P’s acquisition of the interest (or of any part of the interest) was funded

20

with the assistance of public subsidy.

(2)   

A day in a chargeable period is relievable in relation to a single-dwelling

interest if on that day—

(a)   

a relevant housing provider (that is, a non-profit registered provider of

social housing or a registered social landlord) is entitled to the interest,

25

and

(b)   

the condition in subsection (3) is met.

(3)   

The condition mentioned in subsection (2) is that—

(a)   

the relevant housing provider is controlled by its tenants,

(b)   

the person from whom the relevant housing provider acquired the

30

interest (or any part of the interest) is a qualifying body, or

(c)   

the relevant housing provider’s acquisition of the interest (or of any

part of the interest) was funded with the assistance of a public subsidy.

(4)   

In this section—

(a)   

the reference to a relevant housing provider “controlled by its tenants”

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is to be read in accordance with subsection (2) of section 71 of FA 2003;

(b)   

“qualifying body” has the meaning given by subsection (3) of that

section;

(c)   

“public subsidy” has the same meaning as in that section.

Exemptions

40

151     

Public bodies

(1)   

A public body is not regarded as a company for the purposes of this Part.

 
 

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Part 3 — Annual tax on enveloped dwellings

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(2)   

In this section—

(a)   

“public body” means any body corporate that is a public body for the

purposes of section 66 of FA 2003, and

(b)   

references to a public body accordingly include a company such as is

mentioned in subsection (5) of that section (companies wholly owned

5

by the listed bodies).

(3)   

The power of the Treasury to prescribe persons by an order under section 66(4)

of FA 2003 may be exercised so as to make different provision for purposes

relating to annual tax on enveloped dwellings and stamp duty land tax.

(4)   

In paragraph (b) of subsection (2) “company” means a company as defined by

10

section 1 of the Companies Act 2006 (and subsection (1) is to be ignored in

interpreting that paragraph).

152     

Bodies established for national purposes

(1)   

A body listed in subsection (2) is not regarded as a company for the purposes

of this Part.

15

(2)   

The bodies are—

the Historic Buildings and Monuments Commission for England;

the Trustees of the British Museum;

the Trustees of the National Heritage Memorial Fund;

the Trustees of the Natural History Museum.

20

153     

Dwelling conditionally exempt from inheritance tax

(1)   

Subsection (2) applies to a single-dwelling interest if—

(a)   

the whole or part of the dwelling has been designated under section 31

of IHTA 1984 (buildings of outstanding historic or architectural interest

etc),

25

(b)   

an undertaking has been made with respect to the dwelling under

section 30 of that Act (conditionally exempt transfers), and

(c)   

a transfer of value is exempt from inheritance tax by virtue of that

designation and that undertaking.

(2)   

The taxable value of the single-dwelling interest on any day is taken to be zero

30

if no chargeable event has occurred with respect to the dwelling in the time

between the transfer of value and the beginning of that day.

(3)   

Subsection (4) applies to a single-dwelling interest if—

(a)   

the whole or part of the dwelling has been designated under section 31

of IHTA 1984,

35

(b)   

an undertaking has been made with respect to the dwelling under

section 78 of that Act (settled property: conditionally exempt

occasions), and

(c)   

a transfer of property or other event is a conditionally exempt occasion

by virtue of that designation and that undertaking.

40

(4)   

The taxable value of the single-dwelling interest on any day is taken to be zero

if no chargeable event has occurred with respect to the dwelling in the time

between the conditionally exempt occasion and the beginning of that day.

(5)   

In this section—

 
 

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Part 3 — Annual tax on enveloped dwellings

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“chargeable event” means an event which is a chargeable event under

section 32 of IHTA 1984;

“conditionally exempt occasion” is to be read in accordance with section

78(2) of that Act;

“transfer of value” has the same meaning as in that Act.

5

Power to modify reliefs

154     

Modification of reliefs

(1)   

The Treasury may by regulations—

(a)   

amend this Part for the purpose of providing further relief, or further

exemptions, from tax (whether by modifying an existing relief or

10

exemption or otherwise);

(b)   

amend or repeal any of sections 130 to 153 for purposes not falling

within paragraph (a);

(c)   

make any amendment of any other provision of this Part that may be

necessary in consequence of provision under paragraph (b).

15

(2)   

In subsection (1)—

(a)   

the reference to providing further relief from tax includes the provision

of relief for additional persons or categories of person or in additional

cases or circumstances;

(b)   

the reference to providing further exemptions from tax includes the

20

provision of exemptions for additional persons or categories of person

or in additional cases or circumstances.

Alternative property finance

155     

Land sold to financial institution and leased to person

(1)   

This section applies where—

25

(a)   

section 71A of FA 2003 (land sold to financial institution and leased to

person) or section 72 of that Act (land in Scotland sold to financial

institution and leased to person) applies in relation to arrangements

entered into between a financial institution and another person (“the

lessee”), and

30

(b)   

the land in which the institution purchases a major interest under the

first transaction consists of or includes one or more dwellings (or parts

of a dwelling).

(2)   

If the lessee is a company, this Part has effect in relation to times when the

arrangements are in operation as if—

35

(a)   

the interest held by the financial institution as mentioned in subsection

(3)(b) were held by the lessee (and not by the financial institution), and

(b)   

the lease or sub-lease granted under the second transaction had not

been granted.

(3)   

The reference in subsection (2) to times when the arrangements are in

40

operation is to times when—

(a)   

the lessee holds the leasehold interest granted to it under the second

transaction, and

 
 

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Part 3 — Annual tax on enveloped dwellings

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(b)   

the interest purchased under the first transaction (or that interest except

so far as transferred by a further transaction) is held by a financial

institution.

(4)   

A company treated under subsection (2)(a) as holding an interest at a particular

time is treated as holding it as a member of a partnership if at the time in

5

question the company holds the leasehold interest as a member of the

partnership (and this Part has effect accordingly in relation to the other

members of the partnership).

(5)   

In relation to times when the arrangements operate for the benefit of a

collective investment scheme, this Part has effect as if—

10

(a)   

the interest held by the financial institution as mentioned in subsection

(6)(b) were held by the lessee for the purposes of a collective investment

scheme (and were not held by the financial institution), and

(b)   

the lease or sub-lease granted under the second transaction had not

been granted.

15

(6)   

The reference in subsection (5) to times when the arrangements operate for the

benefit of a collective investment scheme is to times when—

(a)   

the lessee holds the leasehold interest for the purposes of a collective

investment scheme, and

(b)   

the interest purchased under the first transaction (or that interest except

20

so far as transferred by a further transaction) is held by a financial

institution.

(7)   

In this section—

“financial institution” has the meaning given by section 73BA of FA 2003;

“the first transaction” has the same meaning as in section 71A or (as the

25

case requires) 72 of FA 2003;

“further transaction” has the same meaning as in section 71A of FA 2003;

“the leasehold interest” means the interest granted to the lessee under the

second transaction;

“the second transaction” has the same meaning as in section 71A or (as the

30

case requires) 72 of FA 2003.

(8)   

The reference in subsection (1) to a major interest in land is to be read in

accordance with section 117 of FA 2003.

(9)   

Where the lessee is an individual, references in subsections (5) and (6) to the

lessee are to be read, in relation to times after the death of the lessee, as

35

references to the lessee’s personal representatives.

(10)   

In relation to transactions in relation to which section 29 of the Scotland Act

2012 (disapplication of UK stamp duty land tax) has effect, this section has

effect as if—

(a)   

in subsection (1) the words “or section 72 of that Act (land in Scotland

40

sold to financial institution and leased to person)” were omitted, and

(b)   

in subsection (7) the words, “or (as the case requires) section 72” were

omitted (in each place).

 
 

 
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Revised 8 May 2013