Finance Bill

House of Commons

Session 2013 - 14
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Finance Bill

Finance Bill
Part 3 — Annual tax on enveloped dwellings
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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—
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(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
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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).

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(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
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completion of the acquisition provided for by the contract.

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(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.
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(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—
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(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
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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.
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(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;
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(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
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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.

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(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,
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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
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(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
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(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.