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Stamp duty land tax: relief from 15% rate |
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1 | Part 4 of FA 2003 (stamp duty land tax) is amended as follows. |
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2 (1) | Schedule 4A (higher rate for certain transactions) is amended as follows. |
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(2) | In paragraph 2(6) (treatment of certain transactions as two separate |
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chargeable transactions) for “and 5” substitute “, 5 to 5K and 6A to 6H”. |
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(3) | For paragraph 5 (property developers) and the cross-heading preceding it |
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“Businesses of letting, trading in or redeveloping properties |
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5 (1) | Paragraph 3 does not apply to a chargeable transaction so far as its |
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subject-matter consists of a higher threshold interest that is |
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acquired exclusively for one or more of the following purposes— |
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(a) | exploitation as a source of rents or other receipts (other |
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than excluded rents) in the course of a qualifying property |
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(b) | development or redevelopment and resale in the course of |
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a property development trade; |
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(c) | resale in the course of a property development trade (in a |
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case where the chargeable transaction is part of a |
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(d) | resale (as stock of the business) in the course of a property |
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(2) | A chargeable interest does not count as being acquired exclusively |
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for one or more of those purposes if it is intended that a non- |
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qualifying individual will be permitted to occupy the dwelling. |
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“excluded rents” has the same meaning as in section 131 of |
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“property development trade” means a trade that— |
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(a) | consists of or includes buying and developing or |
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redeveloping for resale residential or non-residential |
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(b) | is run on a commercial basis and with a view to profit; |
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“part of a qualifying exchange” is to be construed in |
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accordance with section 137(4) of the Finance Act 2013; |
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“property trading business” means a business that— |
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(a) | consists of or includes activities in the nature of a |
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trade of buying and selling dwellings, and |
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(b) | is run on a commercial basis and with a view to profit; |
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“qualifying property rental business” has the same meaning |
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as in section 131 of the Finance Act 2013.” |
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(4) | After paragraph 5 insert— |
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“Meaning of “non-qualifying individual” |
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5A (1) | In paragraph 5 “non-qualifying individual”, in relation to a |
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chargeable transaction, means any of the following— |
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(a) | the purchaser (other than a purchaser entering into the |
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transaction as a member of a partnership); |
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(b) | a purchaser who enters into the transaction as a member of |
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a partnership and has a major share in the partnership, |
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(c) | an individual (a “connected person”) who is connected |
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(e) | the spouse or civil partner of a connected person or of a |
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(f) | a relative of a connected person or of a relevant settlor, or |
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the spouse or civil partner of a relative of a connected |
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person or of a relevant settlor; |
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(g) | a relative of the spouse or civil partner of a connected |
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person or of a relevant settlor; |
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(h) | the spouse or civil partner of a person falling within |
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(i) | an individual who is a major participant in a relevant |
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collective investment scheme or is connected with a major |
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participant in a relevant collective investment scheme. |
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(2) | A member of a partnership has a “major share” in the partnership |
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if the member is entitled to a 50% or greater share— |
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(a) | in the income profits of the partnership, or |
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(b) | in the partnership’s assets. |
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(3) | A collective investment scheme is a “relevant collective |
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investment scheme” for the purposes of sub-paragraph (1)(i) if the |
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purchaser under the chargeable transaction referred to in that sub- |
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paragraph acquires the subject-matter of the transaction for the |
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(4) | An individual who participates in a collective investment scheme |
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is a “major participant” in the scheme if the individual— |
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(a) | is entitled to a share of at least 50% either of all the profits |
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or income arising from the scheme or of any profits or |
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income arising from the scheme that may be distributed to |
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(b) | would in the event of the winding up of the scheme be |
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entitled to 50% or more of the assets of the scheme that |
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would then be available for distribution among the |
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(5) | The reference in sub-paragraph (4)(a) to profits or income arising |
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from a collective investment scheme is to profits or income arising |
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from the acquisition, holding, management or disposal of the |
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property subject to the scheme. |
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“participant”, in relation to a collective investment scheme, is |
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to be read in accordance with section 235 of the Financial |
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Services and Markets Act 2000; |
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“relative” means brother, sister, ancestor or lineal |
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“relevant settlor”, in relation to a chargeable transaction, |
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means an individual who is a settlor in relation to a |
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relevant settlement (as defined in sub-paragraph (7)); |
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“settlement” has the same meaning as in Chapter 5 of Part 5 |
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of ITTOIA 2005 (see section 620 of that Act). |
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(7) | Where a person, in the capacity of trustee of a settlement, is |
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connected with a person who is the purchaser under a chargeable |
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transaction, that settlement is a “relevant settlement” in relation to |
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the chargeable transaction. |
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(8) | In sub-paragraph (7) “trustee” is to be read in accordance with |
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section 1123(3) of CTA 2010 (“connected persons”: |
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(9) | In this paragraph “the purchaser”, in relation to a chargeable |
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transaction, is to be read as a reference to any of the purchasers (if |
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there are more than one). |
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(10) | Section 1122 of the Corporation Tax Act 2010 (connected persons) |
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has effect for the purposes of this paragraph, but for those |
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(a) | subsections (7) and (8) of that section (application of rules |
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about connected persons to partnerships) are to be |
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(b) | subsections (2) to (7) of section 170 of the Finance Act 2013 |
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apply as they apply for the purposes of Part 3 of that Act. |
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Trades involving making a dwelling available to the public |
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5B (1) | Paragraph 3 does not apply to a chargeable transaction so far as its |
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subject-matter consists of a higher threshold interest in relation to |
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which the conditions in sub-paragraph (2) are met. |
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(2) | The conditions are that— |
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(a) | the higher threshold interest is acquired with the intention |
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that it will be exploited as a source of income in the course |
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of a qualifying trade, and |
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(b) | reasonable commercial plans have been formulated to |
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carry out that intention without delay (except so far as |
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delay may be justified by commercial considerations or |
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(3) | “Qualifying trade”, in relation to a higher threshold interest, |
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(a) | is carried on on a commercial basis and with a view to |
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(b) | involves, in its normal course, offering the public the |
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opportunity to make use of, stay in or otherwise enjoy the |
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dwelling as customers of the trade on at least 28 days in |
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(4) | For the purposes of sub-paragraph (3), persons are not considered |
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to have the opportunity to make use of, stay in or otherwise enjoy |
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a dwelling unless the areas that they have the opportunity to make |
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use of, stay in or otherwise enjoy include a significant part of the |
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interior of the dwelling. |
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(5) | The size (relative to the size of the whole dwelling), nature and |
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function of any relevant area or areas in a dwelling are taken into |
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account in determining whether they form a significant part of the |
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interior of the dwelling. |
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Financial institutions acquiring dwellings in the course of lending |
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5C (1) | Sub-paragraph (2) applies to a chargeable transaction if the |
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purchaser is a financial institution carrying on a business that |
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involves the lending of money. |
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(2) | Paragraph 3 does not apply to the chargeable transaction so far as |
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its subject-matter consists of a higher threshold interest that is |
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acquired in the course of that business— |
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(a) | for the purpose of resale in the course of the business and, |
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(b) | in connection with those lending activities. |
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Dwellings for occupation by certain employees etc |
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5D (1) | Paragraph 3 does not apply to a chargeable transaction so far as its |
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subject-matter consists of a higher threshold interest in relation to |
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which the conditions in sub-paragraph (2) are met. |
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| Those conditions can only be met if the purchaser, or a relevant |
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group member, carries on or is to carry on a relievable trade. |
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(2) | The conditions are that— |
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(a) | the interest is acquired for the purpose of making the |
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dwelling available to one or more qualifying employees or |
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qualifying partners for use as living accommodation, and |
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(b) | the dwelling is to be made available as mentioned in |
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paragraph (a) for purposes that are solely or mainly |
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purposes of the relievable trade. |
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(3) | For the purposes of the relief under this paragraph it does not |
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matter whether or not the individuals mentioned in sub- |
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paragraph (2)(a) are identified at the time of the chargeable |
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(4) | “Relievable trade” means a trade that is carried on on a |
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commercial basis and with a view to profit. |
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(5) | In this paragraph references to making a dwelling available to a |
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qualifying employee or qualifying partner include making it |
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available to persons who are to share the accommodation with a |
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qualifying employee or qualifying partner as that individual’s |
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(6) | Where the purchaser is a company, “relevant group member” |
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means a company which is a member of the same group of |
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companies as the purchaser for the purposes mentioned in |
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paragraph 1(2) of Schedule 7 (group relief). |
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More about the condition in paragraph 5D(2)(a) |
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5E (1) | In a case where the person carrying on the relievable trade |
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mentioned in paragraph 5D(1) carries it on in partnership with |
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one or more other persons, “qualifying partner” means any |
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individual who is a member of the partnership. |
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(2) | “Qualifying employee” means an individual employed for the |
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purposes of the qualifying trade. |
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(3) | In a case falling within sub-paragraph (1), the condition in |
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paragraph 5D(2)(a) is taken not to be met if the individuals, or a |
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class of individuals, to whom it is proposed to make the dwelling |
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available for use as living accommodation include, or are likely to |
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include, a member of the partnership who is (or will at the relevant |
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time be) entitled to a 10% or greater share— |
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(a) | in the income profits of the partnership, or |
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(b) | in any company beneficially entitled to the higher |
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threshold interest mentioned in paragraph 5D(1), or |
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(c) | in that higher threshold interest. |
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(4) | In addition, the condition in paragraph 5D(2)(a) is taken not to be |
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met if the individuals, or a class of individuals, to whom it is |
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proposed to make the dwelling available for use as living |
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accommodation include, or are likely to include, an individual |
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employed for the purposes of the trade in question who is (or will |
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at the relevant time be)— |
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(a) | entitled to a 10% or greater share— |
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(i) | in the income profits of the trade, or |
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(ii) | in any company that is beneficially entitled to the |
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higher threshold interest, or |
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(iii) | in that higher threshold interest, or |
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(b) | employed to provide excluded domestic services. |
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(5) | The reference in sub-paragraph (4)(b) to an individual employed |
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to provide excluded domestic services is to an individual the |
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duties of whose employment include the provision of services in |
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connection with the (actual or intended) occupation, by an |
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individual to whom sub-paragraph (6) applies, of the dwelling |
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mentioned in paragraph 5D(2)(a) (“the relevant dwelling”), or a |
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(6) | This sub-paragraph applies to any individual who is connected |
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with a person who is or is to be beneficially entitled to the higher |
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(7) | The following are “linked” dwellings for the purposes of sub- |
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(a) | if the conditions in section 114(2) of the Finance Act 2013 |
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are met in relation to the relevant dwelling and another |
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dwelling, that other dwelling; |
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(b) | a dwelling that is linked to the relevant dwelling, as |
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described in section 115(1) of the Finance Act 2013. |
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(8) | For the purposes of sub-paragraphs (3)(c) and (4)(a) persons who |
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are entitled to a chargeable interest as beneficial joint tenants (or, |
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in Scotland, as joint owners) are taken to be entitled to the |
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chargeable interest as beneficial tenants in common (or, in |
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Scotland, as owners in common) in equal shares. |
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(9) | Section 145 of the Finance Act 2013 (meaning of “10% or greater |
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share in a company”) applies for the purposes of this paragraph as |
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for the purposes of section 144 of that Act. |
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(10) | In this paragraph references to employment include the holding of |
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5F (1) | Paragraph 3 does not apply to a chargeable transaction so far as its |
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subject-matter consists of a higher threshold interest in or over a |
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(a) | that is, or is to be, a farmhouse, and |
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(b) | in relation to which the conditions in sub-paragraph (3) are |
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(2) | The reference in sub-paragraph (1) to a dwelling that “is or is to be |
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a farmhouse” is to a dwelling that forms part of land that is to be |
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occupied, or to continue to be occupied, for the purposes of a |
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qualifying trade of farming. |
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(3) | The conditions are that— |
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(a) | the dwelling is to be occupied for the purposes of that |
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trade by a qualifying farm worker, |
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(b) | reasonable commercial plans have been formulated under |
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which such occupation is either to continue from the |
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effective date of the chargeable transaction or to begin |
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without delay (except so far as delay may be justified by |
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commercial considerations or cannot be avoided), and |
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(c) | occupation of the farmhouse by a qualifying farm worker |
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is then expected to continue as part of the normal way in |
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which the trade is, or is to be, carried on. |
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(4) | In sub-paragraph (3) “qualifying farm worker” means an |
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individual who occupies the dwelling for the purposes of the trade |
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mentioned in that sub-paragraph and has a substantial |
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(a) | in the day-to-day work of the trade, or |
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(b) | in the direction and control of the conduct of the trade. |
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(5) | “Qualifying trade of farming” means a trade of farming that is |
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(a) | on a commercial basis, and |
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(b) | with a view to profit. |
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(6) | A person occupying part of a dwelling is regarded as occupying |
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the dwelling for the purposes of this paragraph. |
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(a) | “farming” has the same meaning as in the Corporation Tax |
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Acts (see section 1125 of CTA 2010), except that in this |
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paragraph “farming” includes market gardening; |
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(b) | “market gardening” has the same meaning as in the |
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Corporation Tax Acts (see section 1125(5) of CTA 2010). |
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5G (1) | Sub-paragraph (2) applies where relief under paragraph 5 has |
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been allowed in respect of a higher threshold interest forming the |
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whole or part of the subject-matter of a chargeable transaction. |
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(2) | The relief is withdrawn if at any time in the period of three years |
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beginning with the effective date of the chargeable transaction |
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(“the control period”) a requirement in sub-paragraph (3) is not |
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(3) | The requirements are that— |
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(a) | the higher threshold interest (if still held by the purchaser) |
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is held exclusively for one or more of the purposes |
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mentioned in paragraph 5(1), |
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(b) | any chargeable interest derived from the higher threshold |
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interest that may be held by the purchaser is held |
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exclusively for one or more of those purposes, and |
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(c) | (if the higher threshold interest or a chargeable interest |
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derived from it is held by the purchaser) no non-qualifying |
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individual is permitted to occupy the dwelling. |
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(4) | The requirements in sub-paragraph (3)(a) and (b) do not apply in |
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relation to times when, because of a change of circumstances that |
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is unforeseen and beyond the purchaser’s control, it is not |
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reasonable to expect the purposes for which the higher threshold |
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interest was acquired to be carried out. |
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(5) | Sub-paragraph (6) applies if a higher threshold interest was |
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acquired for a purpose mentioned in paragraph 5(1) but at some |
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time in the control period the activity in question (for instance, |
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exploitation of the interest as mentioned in paragraph 5(1)(a))— |
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(a) | has not yet begun, or |
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(6) | For the purposes of sub-paragraph (3), the interest is taken to be |
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held for the purpose in question only if reasonable steps are being |
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taken to ensure that the purpose in question is carried out. |
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(7) | In this paragraph “non-qualifying individual” (in relation to the |
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chargeable transaction mentioned in sub-paragraph (1)) has the |
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meaning given by paragraph 5A. |
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5H (1) | This paragraph applies where relief under paragraph 5B (trades |
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involving making a dwelling open to the public) has been allowed |
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in respect of a higher threshold interest forming the whole or part |
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of the subject-matter of a chargeable transaction. |
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(2) | The relief is withdrawn if at any time in the period of three years |
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beginning with the effective date of the chargeable transaction |
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(“the control period”) a requirement in sub-paragraph (3) is not |
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(3) | The requirements are that— |
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