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Finance Bill


Finance Bill
Part 3 — Annual tax on enveloped dwellings

66

 

Meaning of “dwelling”

110     

Meaning of “dwelling”

(1)   

A building or part of a building counts as a dwelling at any time when—

(a)   

it is used or suitable for use as a single dwelling, or

(b)   

it is in the process of being constructed or adapted for such use.

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(2)   

Land that is, or is at any time intended to be, occupied or enjoyed with a

dwelling as a garden or grounds (including any building or structure on such

land) is taken to be part of that dwelling at that time.

(3)   

Land that subsists, or is at any time intended to subsist, for the benefit of a

dwelling is taken to be part of the dwelling at that time.

10

(4)   

A building, or part of a building, used for a purpose specified in section 116(2)

or (3) of FA 2003 is not used as a dwelling for the purposes of subsection (1).

(5)   

Where a building, or part of a building, is used for a purpose mentioned in

subsection (4), no account is to be taken for the purposes of subsection (1) of its

suitability for any other use.

15

(6)   

If a building or part of a building becomes temporarily unsuitable for use as a

dwelling for any reason (including accidental damage, repairs or any other

physical change to the building or its environment), that temporary

unsuitability is ignored in determining whether or not the building or part of

a building is, during the period in question, a dwelling for the purposes of this

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Part.

   

This subsection does not affect any of the provisions in sections 124 to 129.

111     

Substantial performance of “off plan” purchase

(1)   

Subsection (2) applies where—

(a)   

a contract is entered into for the acquisition of a chargeable interest in

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or over land that consists of or includes a building, or part of a building,

that is to be constructed or adapted for use as a single dwelling,

(b)   

substantial performance is treated as constituting the acquisition of the

chargeable interest (under section 120), and

(c)   

construction or adaptation of the building, or the part of a building, has

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not begun by the time the contract is substantially performed.

(2)   

The chargeable interest deemed to be acquired as mentioned in subsection

(1)(b) is taken to be in or over land that consists of or (as appropriate) includes

a dwelling.

(3)   

If at any time after the substantial performance of the contract the obligation

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under the contract to carry out the construction or adaptation ceases to have

effect without the construction or adaptation having been begun, subsection

(2) ceases to apply at that time.

(4)   

A building or part of a building used for a purpose specified in section 116(2)

or (3) of FA 2003 is not used as a dwelling for the purposes of subsection (1).

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(5)   

In this section—

“contract” includes any agreement (including, in the case of Scotland,

missives of let not constituting a lease);

 
 

Finance Bill
Part 3 — Annual tax on enveloped dwellings

67

 

“substantially performed” has the same meaning as in section 44 of FA

2003.

112     

Power to modify meaning of “use as a dwelling”

(1)   

The Treasury may by order amend this Part so as to specify cases where use of

a building is to be use of a building as a dwelling for the purposes of section

5

110(1) or 111(1).

(2)   

The reference in section 116(8)(a) of FA 2003 (power to amend section 116(2)

and (3)) to “the purposes of subsection (1)” includes a reference to the purposes

of sections 110(1) and 111(1).

113     

Parts of a greater whole

10

(1)   

The fact that a part of a building is suitable for use as a dwelling does not

prevent that part from forming part of a larger single dwelling.

(2)   

The fact that a building or structure that is—

(a)   

in the garden or grounds of a dwelling, and

(b)   

occupied or enjoyed with the dwelling,

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is itself suitable for use as a single dwelling does not prevent it from being

treated (in accordance with section 110(2)) as part of the dwelling.

114     

Dwelling in grounds of another dwelling

(1)   

Subsection (4) applies where the conditions in subsection (2) are met in relation

to two dwellings (the “main dwelling” and the “associated dwelling”) on a day

20

(“the day in question”) in a chargeable period.

(2)   

The conditions are that—

(a)   

the main dwelling has a garden or grounds,

(b)   

the associated dwelling stands within the garden or grounds of the

main dwelling, but is not occupied or enjoyed with that dwelling,

25

(c)   

the associated dwelling does not have separate access, and is not part

of the same building as the main dwelling, and

(d)   

the common ownership condition is met.

(3)   

The common ownership condition is that—

(a)   

a company is entitled to a chargeable interest in the main dwelling, and

30

the company or a person connected with the company is entitled to a

chargeable interest in the associated dwelling, or

(b)   

a chargeable interest in the main dwelling is held for the purposes of a

collective investment scheme, and a chargeable interest in the

associated dwelling is held for the purposes of the same collective

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investment scheme.

   

(It does not matter whether or not the interest in the main dwelling and the

interest in the associated dwelling are held for the same title.)

(4)   

This Part has effect in relation to the interests mentioned in paragraph (a) or (as

the case may be) (b) of subsection (3) as if the main dwelling and the associated

40

dwelling were, on the day in question, suitable for use as a single dwelling.

(5)   

Subsection (4) does not apply if—

 
 

Finance Bill
Part 3 — Annual tax on enveloped dwellings

68

 

(a)   

the day in question is, in relation to the interest in the main dwelling or

the interest in the associated dwelling, relievable by virtue of a

provision mentioned in subsection (6), or

(b)   

the ownership condition is, by virtue of section 149 (charitable

companies), regarded as not being met on that day with respect to one

5

or other of those interests.

(6)   

Those provisions are—

section 131 (property rental businesses);

section 132 (rental property: preparation for sale etc);

section 135 (dwellings opened to the public);

10

section 136 (property developers);

section 137 (property developers: exchange of dwellings);

section 139 (property traders);

section 141 (financial institutions acquiring dwellings in the course of

lending);

15

section 143 (occupation by certain employees or partners);

section 146 (farmhouses);

section 148 (providers of social housing).

(7)   

The reference in subsection (3)(a) to a person connected with the company does

not include a public body (as defined in section 151) or a body listed in section

20

152(2) (bodies established for national purposes).

(8)   

The reference in subsection (3)(b) to a chargeable interest being held for the

purposes of the same collective investment scheme includes a reference to a

person connected with the scheme being entitled to the interest.

(9)   

The associated dwelling has “separate access” only if—

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(a)   

there is access to the associated dwelling directly from a highway (in

Scotland, a road) that the dwelling adjoins, or

(b)   

the person entitled to possession of the associated dwelling has access

to that dwelling from a highway (in Scotland, a road), exclusively by

passing over land that the person is entitled to pass over by reason of

30

one or more rights of way or other interests in land to which the person

is separately entitled.

(10)   

In this section—

in relation to a dwelling or dwellings, references to the “garden or

grounds” are to land occupied or enjoyed with the dwelling or

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dwellings as a garden or grounds;

references to the person entitled to possession of a dwelling are to the

person entitled to possession of the dwelling by reason of an estate or

interest held by that person;

“separately entitled” means entitled otherwise than by reason of a

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chargeable interest in or over the main dwelling.

115     

Dwellings in the same building

(1)   

Two parts of a building are “linked dwellings” if—

(a)   

each of them counts as a dwelling,

(b)   

there is private access between the two dwellings,

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Finance Bill
Part 3 — Annual tax on enveloped dwellings

69

 

(c)   

the two parts of the building are not (together) used or suitable for use

as a single dwelling, and

(d)   

the common ownership condition and the use condition are met.

(2)   

The common ownership condition is that—

(a)   

a company is entitled to a chargeable interest in one of the dwellings,

5

and the company or a person connected with the company is entitled to

a chargeable interest in the other dwelling, or

(b)   

a chargeable interest in one of the dwellings is held for the purposes of

a collective investment scheme, and a chargeable interest in the other

dwelling is held for the purposes of the same collective investment

10

scheme.

   

(It does not matter whether or not the interests are held for the same title.)

(3)   

If on a day in a chargeable period (“the day in question”) two parts of a

building constitute linked dwellings, this Part has effect in relation to the

interests mentioned in paragraph (a) or (as the case may be) (b) of subsection

15

(2) as if the two parts were, on the day in question, suitable for use as a single

dwelling.

(4)   

Subsection (3) does not apply if—

(a)   

the day in question is, in relation to a chargeable interest mentioned in

subsection (2)(a) or (as the case may be) (2)(b), relievable by virtue of a

20

provision mentioned in subsection (5), or

(b)   

(in a case where paragraph (a) of subsection (2) applies) the ownership

condition is, by virtue of section 149 (charitable companies), regarded

as not being met on that day with respect to one or other of the

chargeable interests mentioned in that paragraph.

25

(5)   

Those provisions are—

section 131 (property rental businesses);

section 132 (rental property: preparation for sale etc);

section 135 (dwellings opened to the public);

section 136 (property developers);

30

section 137 (property developers: exchange of dwellings);

section 139 (property traders);

section 141 (financial institutions acquiring dwellings in the course of

lending);

section 143 (occupation by certain employees or partners);

35

section 146 (farmhouses);

section 148 (providers of social housing).

(6)   

The reference in subsection (2)(a) to a person connected with the company does

not include a public body (as defined in section 151) or a body listed in section

152(2) (bodies established for national purposes).

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(7)   

If two dwellings in a building (dwelling A and dwelling B) are treated under

this section as suitable for use as a single dwelling, and dwelling B and a third

dwelling in the building (“dwelling C”) are treated under this section as

suitable for use as a single dwelling, all three are treated as suitable for use as

a single dwelling (and so on).

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