House of Commons portcullis
House of Commons
Session 2013 - 14
Internet Publications
Other Bills before Parliament

Finance Bill


Finance Bill
Part 3 — Annual tax on enveloped dwellings

70

 

116     

Section 115: supplementary

(1)   

The reference in section 115(2)(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.

(2)   

For the purposes of section 115, there is private access between two dwellings

5

if the person entitled to possession of each dwelling is entitled, by reason of a

right of way or other interest in land, to have access to that person’s dwelling

from the other dwelling, without passing over any part of the building (or any

other land) in which a third party has an interest entitling that third party to

enter it.

10

(3)   

In subsection (2) “third party” means a person other than—

(a)   

the persons entitled to possession of the dwellings mentioned in

subsection (2), and

(b)   

persons connected with any of them.

(4)   

The use condition mentioned in section 115(1)(d) is that each of the two

15

dwellings—

(a)   

is occupied (or usually occupied) by a relevant individual,

(b)   

is intended to be so occupied (or usually so occupied), or

(c)   

is not occupied.

(5)   

In subsection (4) “relevant individual” means—

20

(a)   

an individual connected with the company mentioned in section

115(2)(a),

(b)   

an individual connected with the collective investment scheme

mentioned in section 115(2)(b),

(c)   

an individual who occupies (or is to occupy) the dwelling concerned

25

otherwise than on commercial terms, or

(d)   

an individual who is employed wholly or partly in connection with the

occupation by a person falling within any of paragraphs (a) to (c) of a

dwelling in the building, or provides services in connection with such

a person’s occupation of a dwelling in the building.

30

(6)   

In this section 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.

117     

Terraces etc

Any structure (such as a terrace of houses or a pair of semi-detached houses)

35

that is composed of or includes dwellings is regarded as a building for the

purposes of sections 115 and 116.

Acquisitions and disposals

118     

Acquisitions and disposals of chargeable interests

(1)   

References in this Part to the acquisition of a chargeable interest include any

40

acquisition however effected (including an acquisition effected by the act of

parties to a transaction, by order of a court or other authority, by or under any

statutory provision or by operation of law).

 
 

Finance Bill
Part 3 — Annual tax on enveloped dwellings

71

 

(2)   

The surrender or release of a chargeable interest is—

(a)   

an acquisition of that interest by any person whose interest or right is

benefited or enlarged by the transaction, and

(b)   

a disposal by the person ceasing to be entitled to that interest.

(3)   

The variation of a chargeable interest is—

5

(a)   

an acquisition of a chargeable interest by the person benefiting from the

variation, and

(b)   

a disposal of a chargeable interest by the person whose interest is

subject to or limited by the variation.

119     

Date of acquisition or disposal

10

(1)   

A person who acquires a chargeable interest in or over land that consists of or

includes a dwelling is treated for the purposes of this Part as acquiring the

interest on the effective date of the acquisition (and therefore as entitled to the

interest with effect from that date: see section 169).

(2)   

A person who disposes of a chargeable interest in or over land that consists of

15

or includes a dwelling is treated for the purposes of this Part as ceasing to be

entitled to the interest on the effective date of the disposal (and therefore as not

being entitled to the interest on that day: see section 169).

(3)   

If a person’s acquisition and disposal of a chargeable interest are completed on

the same day, then for the purposes of this Part—

20

(a)   

the person’s acquisition of the interest is ignored if it precedes the

disposal;

(b)   

the person’s disposal of the interest is ignored if it precedes the

acquisition.

(4)   

The effective date of an acquisition of a chargeable interest is—

25

(a)   

the date on which the acquisition is completed, or

(b)   

any alternative date the Commissioners for Her Majesty’s Revenue and

Customs may prescribe by regulations.

(5)   

The effective date of a disposal of a chargeable interest is—

(a)   

the date on which the disposal is completed, or

30

(b)   

any alternative date the Commissioners for Her Majesty’s Revenue and

Customs may specify by regulations.

120     

Contract and conveyance: the purchaser

(1)   

This section applies where a person (“P”) enters into a contract under which—

(a)   

P is to acquire a relevant chargeable interest, and

35

(b)   

the acquisition is to be completed by a conveyance.

(2)   

P is not regarded as acquiring any chargeable interest by reason of entering

into the contract.

(3)   

If the contract is substantially performed without having been completed, this

Part has effect as if the substantial performance of the contract were the

40

completion of the acquisition provided for by the contract.

 
 

Finance Bill
Part 3 — Annual tax on enveloped dwellings

72

 

(4)   

Accordingly, where subsection (3) applies and the contract is subsequently

completed by a conveyance, that completion is not treated for the purposes of

section 100 (taxable value) as effecting the acquisition of a chargeable interest.

(5)   

Where subsection (3) applies and—

(a)   

the contract is afterwards rescinded or annulled, or

5

(b)   

performance of the contract is for any other reason terminated before

the contract has been carried fully into effect,

   

this Part has effect as if P had at the relevant time disposed of the chargeable

interest referred to in subsection (1)(a).

(6)   

In subsection (5) “the relevant time” means—

10

(a)   

the time when the rescission or annulment takes effect, or

(b)   

(as the case requires) the time when performance of the contract ceases.

(7)   

Where subsection (3) applies and the contract is afterwards varied (or partially

rescinded) so that the chargeable interest to be acquired under the contract is

not the same as the chargeable interest to which the contract originally related,

15

this Part (including subsection (3)) has effect as if the variation of the contract

effected—

(a)   

the disposal by P of the chargeable interest referred to in subsection

(1)(a), and

(b)   

the substantial performance of the contract, as varied.

20

(8)   

If the parties to the contract proceed as if they had varied the contract in the

way mentioned in subsection (7) (without actually doing so), subsection (7)

applies as if they had actually made the corresponding variation in the terms

of the contract.

(9)   

In this section—

25

(a)   

references to completion are to the completion of the acquisition

proposed, whether or not between the original parties;

(b)   

“contract” includes any agreement;

(c)   

“conveyance” includes any instrument;

(d)   

“relevant chargeable interest” means a chargeable interest in or over

30

land that consists of or includes a dwelling;

(e)   

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

2003.

121     

Contract and conveyance: the vendor

(1)   

This section applies where a person (“V”) enters into a contract under which—

35

(a)   

V is to dispose of a relevant chargeable interest, and

(b)   

the disposal is to be completed by a conveyance.

(2)   

V is not regarded as disposing of a chargeable interest by reason of entering

into the contract.

(3)   

If the contract is substantially performed without having been completed, this

40

Part has effect as if the substantial performance of the contract were the

completion of the disposal provided for by the contract.

(4)   

Accordingly, where subsection (3) applies and the contract is subsequently

completed by a conveyance, that completion is not treated for the purposes of

section 100 as effecting the disposal of a chargeable interest.

45

 
 

Finance Bill
Part 3 — Annual tax on enveloped dwellings

73

 

(5)   

Where subsection (3) applies and—

(a)   

the contract is afterwards rescinded or annulled, or

(b)   

performance of the contract is for any other reason terminated before

the contract has been carried fully into effect,

   

this Part has effect as if V had at the relevant time re-acquired the chargeable

5

interest referred to in subsection (1)(a).

(6)   

In subsection (5) “the relevant time” means—

(a)   

the time when the rescission or annulment takes effect, or

(b)   

(as the case requires) the time when performance of the contract ceases.

(7)   

Where subsection (3) applies and the contract is afterwards varied (or partially

10

rescinded) so that the chargeable interest to be disposed of under the contract

is not the same as the chargeable interest to which the contract originally

related, this Part (including subsection (3)) has effect as if the variation of the

contract effected—

(a)   

the re-acquisition by V of the chargeable interest referred to in

15

subsection (1)(a), and

(b)   

the substantial performance of the contract, as varied.

(8)   

If the parties to the contract proceed as if they had varied the contract in the

way mentioned in subsection (7) (without actually doing so), subsection (7)

applies as if they had actually made the corresponding variation in the terms

20

of the contract.

(9)   

In this section—

(a)   

references to completion are to the completion of the disposal

proposed, between the same parties, in substantial conformity with the

contract;

25

(b)   

“contract” includes any agreement;

(c)   

“conveyance” includes any instrument;

(d)   

“relevant chargeable interest” means a chargeable interest in or over

land that consists of or includes a dwelling;

(e)   

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

30

2003.

New dwellings, conversions, demolition etc

122     

New dwellings

(1)   

Where a new dwelling is being or has been constructed (whether or not as part

of a larger building) the earlier of the following days is a valuation date in the

35

case of a single-dwelling interest in that dwelling—

(a)   

the completion day;

(b)   

the day on which the dwelling is first occupied.

(2)   

The reference in subsection (1) to the construction of a new dwelling—

(a)   

includes the production of a new dwelling by the alteration (whether

40

structural or otherwise) of an existing building, but

(b)   

does not include a case to which section 123 (dwellings produced from

other dwellings) or section 126 (demolition and replacement: new

dwellings) applies.

 
 

Finance Bill
Part 3 — Annual tax on enveloped dwellings

74

 

(3)   

The reference in subsection (1) to the “completion day” is to the day on which

the new dwelling is treated as having come into existence for the purposes of—

(a)   

Part 1 of the Local Government Finance Act 1992 (council tax: England

and Wales) (see section 17 of that Act), or

(b)   

Part 2 of that Act (council tax: Scotland) (see section 83 of that Act), or

5

(c)   

the Rates (Northern Ireland) Order 1977 (S.I. 1977/2157 (N.I. 28)) (see

Article 25B of that Order).

(4)   

In this section “building” includes a part of a building.

123     

Dwellings produced from other dwellings

(1)   

This section applies where an existing building that is a dwelling or dwellings

10

(“the old dwelling” or “the old dwellings”) becomes a different dwelling or

dwellings (“new” dwellings) as a result of structural alteration.

(2)   

Any question as to whether or not a person has a single-dwelling interest at

any time either in the old dwelling or dwellings or in a new dwelling is

determined on the assumption that the old dwelling or dwellings cease to exist,

15

and any new dwelling come into existence, only when the conversion is

completed.

(3)   

The day after the conversion is completed is a valuation date in the case of any

single-dwelling interest in a new dwelling.

(4)   

References to when the conversion is completed are to the end of the day on

20

which the new dwelling is treated as having come into existence (or the first

day on which all the new dwellings are treated as having come into existence)

for the purposes of—

(a)   

Part 1 of the Local Government Finance Act 1992 (council tax: England

and Wales) (see section 17 of that Act), or

25

(b)   

Part 2 of that Act (council tax: Scotland) (see section 83 of that Act), or

(c)   

the Rates (Northern Ireland) Order 1977 (S.I. 1977/2157 (N.I. 28)) (see

Article 25B of that Order).

(5)   

In this section “building” includes a part of a building.

124     

Demolition of a dwelling

30

(1)   

This section and sections 125 to 127 apply where a building that is a dwelling

(“the old dwelling”) is demolished after 1 April 2013.

(2)   

Except so far as express provision to the contrary is made in sections 125 to 127,

any question as to whether a person has a single-dwelling interest in the

dwelling, and any question as to the taxable value of such an interest, is

35

determined as if the dwelling had not been demolished.

(3)   

For the purposes of subsection (1) the demolition of a building is treated as

having occurred after 1 April 2013 if a day after 1 April 2013 is the first day on

which—

(a)   

the demolition has begun, and

40

(b)   

as a result, the building is no longer suitable for use as a dwelling.

(4)   

In this section “building” includes a part of a building.

 
 

 
previous section contents continue
 
House of Commons home page Houses of Parliament home page House of Lords home page search page enquiries

© Parliamentary copyright 2013
Revised 25 June 2013