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Session 2013 - 14
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Finance Bill
Schedule 39 — Stamp duty land tax on leases
469

Schedule 39
Section 195

Stamp duty land tax on leases
Introduction
1
Part 4 of FA 2003 (stamp duty land tax) is amended as follows.
Leases that continue after a fixed term
5
2     (1)
In Schedule 17A (further provisions about leases), paragraph 3 (leases that
continue after a fixed term) is amended as follows.
      (2)
In sub-paragraph (3)—
(a)
after “continuation of the lease” insert “for a period (or further
period) of one year”, and
10
(b)
in paragraph (a), for “that term” substitute “that one year period”.
      (3)
After that sub-paragraph insert—
   “(3A)
But no tax or additional tax is payable in respect of a transaction as
a result of the continuation of a lease for a period (or further
period) of one year under sub-paragraph (2) if, during that one
15
year period, the tenant under the lease is granted a new lease of
the same or substantially the same premises in circumstances
where paragraph 9A applies.”
      (4)
After sub-paragraph (3A) insert—
   “(3B)
Sub-paragraph (2) is subject to paragraph 3A.”
20
      (5)
In sub-paragraph (4), for the words from “the day” to the end substitute “the
last day of the one year period for which the lease is continued or (as the case
may be) further continued.”
      (6)
After sub-paragraph (5) insert—
    “(6)
Where—
25
(a)
a lease would be treated as continuing for a period (or
further period) of one year under sub-paragraph (2), but
(b)
(ignoring that sub-paragraph) the lease actually terminates
at a time during that period,

the lease is to be treated as continuing under sub-paragraph (2)
30
only until that time; and the references in sub-paragraphs (3) and
(4) to that one year period are accordingly to be read as references
to so much of that year as ends with that time.”
3
After that paragraph insert—
“3A   (1)
This paragraph applies where—
35
(a)
(ignoring this paragraph) paragraph 3 would apply to
treat a lease (“the original lease”) as if it were a lease for a
fixed term one year longer than the original term,
(b)
during that one year period the tenant under that lease is
granted a new lease of the same or substantially the same
40
premises,

Finance Bill
Schedule 39 — Stamp duty land tax on leases
470

(c)
the term of the new lease begins during that one year
period, and
(d)
paragraph 9A (backdated lease granted to tenant holding
over) does not apply.
      (2)
Paragraph 3 does not apply to treat the lease as continuing after
5
the original term.
      (3)
The term of the new lease is treated for the purposes of this Part as
beginning immediately after the original term.
      (4)
Any rent which, in the absence of this paragraph, would be
payable under the original lease in respect of that one year period
10
is to be treated as payable under the new lease (and paragraph 1A
of Schedule 5 does not apply to it).
      (5)
Where the fixed term of a lease has previously been extended (on
one or more occasions) under paragraph 3, this paragraph applies
as if references to the original term were references to the fixed
15
term as previously so extended.”
4
In section 87 (interest on unpaid tax), in subsection (3)—
(a)
after paragraph (aa) insert—
“(aaa)
in the case of an amount payable under paragraph
3(3) of Schedule 17A (leases that continue after a fixed
20
term) by reason of the continuation of a lease for a
period (or further period) under paragraph 3(2) or (6)
of that Schedule, the final day of the period (or further
period),” and
(b)
in paragraph (ab) omit “3(3) or” and “leases that continue after a
25
fixed term and”.
5
In section 119 (meaning of “effective date” of a transaction), in subsection (2),
at the appropriate place in the list insert—

“paragraph 3(4) of Schedule 17A (leases that continue after a fixed
term),”.
30
Agreement for lease and assignment of agreement for lease
6     (1)
Schedule 17A is amended as follows.
      (2)
In paragraph 12A (agreement for lease), for sub-paragraph (3) substitute—
    “(3)
Where a lease (“the actual lease”) is subsequently granted in
pursuance of the agreement, the notional lease is to be treated for
35
the purposes of this Part as if it were a lease granted—
(a)
on the date the agreement was substantially performed,
(b)
for a term which begins with that date and ends at the end
of the term of the actual lease, and
(c)
in consideration of the total rent payable over that term
40
and any other consideration given for the notional lease or
the actual lease.
     (3A)
Where sub-paragraph (3) applies the grant of the actual lease is
disregarded for the purposes of this Part except section 81A

Finance Bill
Schedule 39 — Stamp duty land tax on leases
471

(return or further return in consequence of later linked
transaction).
     (3B)
For the purposes of section 81A—
(a)
the grant of the notional lease and the grant of the actual
lease are linked (whether or not they would be linked by
5
virtue of section 108),
(b)
the lessee under the actual lease (rather than the lessee
under the notional lease) is liable for any tax or additional
tax payable in respect of the notional lease as a result of
sub-paragraph (3), and
10
(c)
the reference in section 81A(1)(a) to “the purchaser under
the earlier transaction” is to be read, in relation to the
notional lease, as a reference to the lessee under the actual
lease.”
      (3)
In paragraph 19 (missives of let)—
15
(a)
for sub-paragraph (2) substitute—
    “(2)
Where in Scotland there is a lease constituted by concluded
missives of let (“the first lease”) and at some later time a
lease is executed (“the second lease”), the first lease is to be
treated for the purposes of this Part as if it were a lease
20
granted—
(a)
on the date the missives of let were concluded,
(b)
for a period which begins with that date and ends
at the end of the period of the second lease, and
(c)
in consideration of the total rent payable over that
25
period and any other consideration given for the
first lease or the second lease.
     (2A)
Where sub-paragraph (2) applies the grant of the second
lease is disregarded for the purposes of this Part except
section 81A (return or further return in consequence of
30
later linked transaction).
     (2B)
For the purposes of section 81A—
(a)
the grant of the first lease and the grant of the
second lease are linked (whether or not they would
be linked by virtue of section 108),
35
(b)
the lessee under the second lease (rather than the
lessee under the first lease) is liable for any tax or
additional tax payable in respect of the first lease
lease as a result of sub-paragraph (2), and
(c)
the reference in section 81A(1)(a) to “the purchaser
40
under the earlier transaction” is to be read, in
relation to the first lease, as a reference to the lessee
under the actual lease.
(b)
for sub-paragraph (4) substitute—
    “(4)
Where sub-paragraph (3) applies and at some later time a
45
lease (“the actual lease”) is executed, this Part applies as if
the notional lease were a lease granted—
(a)
on the date the agreement was substantially
performed,

Finance Bill
Schedule 39 — Stamp duty land tax on leases
472

(b)
for a period which begins with that date and ends
at the end of the period of the actual lease, and
(c)
in consideration of the total rent payable over that
period and any other consideration given for the
agreement or the actual lease.
5
     (4A)
Where sub-paragraph (4) applies the grant of the second
lease is disregarded for the purposes of this Part except
section 81A (return or further return in consequence of
later linked transaction).”
     (4B)
For the purposes of section 81A—
10
(a)
the grant of the notional lease and the grant of the
actual lease are linked (whether or not they would
be linked by virtue of section 108),
(b)
the lessee under the actual lease (rather than the
lessee under the notional lease) is liable for any tax
15
or additional tax payable in respect of the notional
lease as a result of sub-paragraph (4), and
(c)
the reference in section 81A(1)(a) to “the purchaser
under the earlier transaction” is to be read, in
relation to the notional lease, as a reference to the
20
lessee under the actual lease.”
      (4)
Accordingly, in Schedule 25 to FA 2006, paragraphs 4 and 5 are omitted.
Abnormal rent increases
7     (1)
In Schedule 17A, omit paragraphs 14 and 15 (abnormal increases in rent after
fifth year).
25
      (2)
Accordingly, the following are also repealed—
(a)
in Schedule 25 to FA 2006, paragraphs 7, 8 and 9(5), and
(b)
in Schedule 3 to the Scotland Act 2012, paragraph 27(9).
Commencement
8     (1)
The amendments made by paragraph 2(2), (3), (5) and (6) have effect in
30
relation to any one year period for which a lease is continued, or further
continued, which begins on or after the commencement day (including any
period which would be one year but for paragraph 3(6) of Schedule 17A to
FA 2003).
      (2)
The amendments made by paragraphs 2(4), 3 and 5 have effect if the one
35
year period mentioned in paragraph 3A(1)(b) of Schedule 17A to FA 2003
begins on or after the commencement day.
      (3)
The amendments made by paragraph 4 have effect in relation to amounts
payable in consequence of any period for which a lease is continued, or
further continued, which begins on or after the commencement day.
40
      (4)
The amendments made by paragraph 6 have effect if the effective date of the
actual lease or, as the case may be, second lease falls on or after the
commencement day.
      (5)
The amendments made by paragraph 7 have effect in relation to any increase
in rent that takes effect on or after the commencement day.
45

Finance Bill
Schedule 40 — Climate change levy: supplies subject to carbon price support rates etc
Part 2 — New provision having effect from 1 April 2013
473

      (6)
“The commencement day” means the day on which this Act is passed.
Schedule 40
Section 198

Climate change levy: supplies subject to carbon price support rates etc
Part 1
Earlier provision not to have effect
5
1     (1)
On and after 26 March 2013, Schedule 6 to FA 2000 (climate change levy) has
effect as if neither—
(a)
Schedule 20 to FA 2011, nor
(b)
Parts 1 and 2 of Schedule 32 to FA 2012,

had ever been enacted.
10
      (2)
Accordingly—
(a)
in FA 2011, section 78 and Schedule 20 are omitted, and
(b)
in FA 2012, Parts 1 and 2 of Schedule 32 are omitted.
      (3)
The amendments made by sub-paragraph (2) are treated as having come
into force on 26 March 2013.
15
Part 2
New provision having effect from 1 April 2013
New provision
2
Schedule 6 to FA 2000 (climate change levy) is amended as follows.
3
In paragraph 4 (definition of “taxable supply”) in sub-paragraph (2)(b) after
20
“24” insert “, 24A, 24B, 24C, 42D”.
4
In paragraph 5 (supplies of electricity) after sub-paragraph (2) insert—
   “(2A)
Levy is chargeable on a supply of electricity if—
(a)
the supply is made by an exempt unlicensed electricity
supplier who is an auto-generator or who is of a
25
description prescribed by regulations made by the
Treasury,
(b)
the electricity was produced in a generating station owned
by the supplier using commodities which were the subject
of a deemed supply under paragraph 24A or which would
30
have been the subject of such a supply had the reference in
paragraph 24A(1)(a) to Great Britain been a reference to
the United Kingdom instead,
(c)
the supply is not a deemed supply under paragraph 23(3),
and
35
(d)
the person to whom the supply is made is not an electricity
utility.”
5
In paragraph 6 (supplies of gas) in sub-paragraph (2A) after “24” insert “,
24A, 24B, 24C, 42D”.

Finance Bill
Schedule 40 — Climate change levy: supplies subject to carbon price support rates etc
Part 2 — New provision having effect from 1 April 2013
474

6     (1)
Paragraph 14 (exemption for supplies to electricity producers) is amended
as follows.
      (2)
In sub-paragraphs (2)(b) and (3)(b) after “electricity” insert “in a small
generating station”.
      (3)
After sub-paragraph (3) insert—
5
  “(3ZA)
Sub-paragraph (1) does not exempt a supply where the person to
whom the supply is made—
(a)
uses the commodity supplied in producing electricity in a
stand-by generator, and
(b)
uses the electricity produced otherwise than in exemption-
10
retaining ways.”
      (4)
After sub-paragraph (3A) insert—
   “(3B)
Paragraph 24A makes provision under which carbon price
support rate commodities intended to be used in a generating
station may be the subject of a deemed taxable supply (and,
15
accordingly, this paragraph needs to be read subject to that
paragraph).”
      (5)
Omit sub-paragraphs (4) and (5).
7
In paragraph 15 (exemption for supplies to combined heat and power
stations) after sub-paragraph (4) insert—
20
   “(4A)
Paragraph 24B makes provision under which carbon price
support rate commodities intended to be used in a combined heat
and power station may be the subject of a deemed taxable supply
(and, accordingly, this paragraph needs to be read subject to that
paragraph).”
25
8     (1)
Paragraph 17 (exemption: self-supplies by electricity producers) is amended
as follows.
      (2)
After sub-paragraph (1) insert—
   “(1A)
The supply is exempt from levy if it is a supply of electricity
produced in—
30
(a)
a fully exempt combined heat and power station,
(b)
a partly exempt combined heat and power station,
(c)
a stand-by generator, or
(d)
a small generating station.
     (1B)
Sub-paragraph (1A)(d) applies only if the producer is—
35
(a)
an auto-generator, or
(b)
an exempt unlicensed electricity supplier of a description
prescribed by regulations made by the Treasury.”
      (3)
In sub-paragraph (2) for the words from “If” to “unless—” substitute “This
paragraph does not exempt the supply if—”.
40
      (4)
Omit sub-paragraphs (3) and (4).
9
In paragraph 21 (regulations to avoid double charges to levy) after sub-

Finance Bill
Schedule 40 — Climate change levy: supplies subject to carbon price support rates etc
Part 2 — New provision having effect from 1 April 2013
475

paragraph (2) insert—
   “(2A)
In sub-paragraph (2)(b) “taxable supply” does not include a
deemed supply under paragraph 24A, 24B, 24C or 42D.”
10
In Part 2 after paragraph 24 insert—
“Deemed taxable supply: commodities to be used in producing electricity
5
24A   (1)
Sub-paragraph (2) applies if—
(a)
a quantity of a carbon price support rate commodity is
brought onto, or arrives at, a site in Great Britain at which
a generating station is situated,
(b)
that quantity of the commodity is intended to be used for
10
producing electricity in the station,
(c)
the station is neither a fully exempt combined heat and
power station nor a partly exempt combined heat and
power station, and
(d)
the station is neither a small generating station nor a stand-
15
by generator.
      (2)
For the purposes of this Schedule the owner of the station is
deemed to make a taxable supply to himself of that quantity of the
commodity.
      (3)
In sub-paragraph (1)(a) the reference to a commodity being
20
brought onto, or arriving at, a site covers (in particular) gas in a
gaseous state arriving at the site through a pipe.
      (4)
For the purposes of sub-paragraph (1) it does not matter—
(a)
if the quantity of the commodity is not the subject of an
actual supply made to the owner of the station, or
25
(b)
if the commodity’s availability for use in the station is
subject to any condition.
Deemed taxable supply: commodities to be used in combined heat and power station
24B   (1)
Sub-paragraph (2) applies if—
(a)
a quantity of a carbon price support rate commodity is
30
brought onto, or arrives at, the CHPQA site of a fully
exempt combined heat and power station or a partly
exempt combined heat and power station in Great Britain,
(b)
that quantity of the commodity is intended to be used in
the station for producing outputs of the station, and
35
(c)
the station is not a small generating station.
      (2)
For the purposes of this Schedule the operator of the station is
deemed to make a taxable supply to himself of that quantity of the
commodity so far as that quantity is referable to the production of
electricity.
40
      (3)
For the purposes of sub-paragraph (2) the extent to which a
quantity of a commodity is referable to the production of
electricity is to be determined in accordance with regulations
under paragraph 24D(1).