Finance Bill (HC Bill 47)

far as the purchaser acquires it under a regulated home reversion
plan which the purchaser enters into as plan provider.

(3) In this paragraph—

• “authorised plan provider” means a person authorised under
  5the Financial Services and Markets Act 2000 to carry on in the
  United Kingdom the regulated activity specified in article
  63B(1) of the Regulated Activities Order (entering into
  regulated home reversion plan as plan provider);

• “the Regulated Activities Order” means the Financial Services
  10and Markets (Regulated Activities) Order 2001 (S.I. 2001/
  544);

• “regulated home reversion plan” means an arrangement which
  is a regulated home reversion plan for the purposes of
  Chapter 15A of Part 2 of the Regulated Activities Order.

(4) 15In this section references to entering into a regulated home reversion
plan “as plan provider” are to be interpreted as if the references were
in the Regulated Activities Order.””

(3) After paragraph 5I insert—

“5IA (1) This paragraph applies where relief under paragraph 5CA
20(acquisition under a regulated home reversion plan) has been
allowed in respect of a higher threshold interest forming the whole
or part of the subject-matter of a chargeable transaction.

(2) The relief is withdrawn if at any time in the period of three years
beginning with the effective date of the chargeable transaction the
25purchaser holds the higher threshold interest otherwise than for the
purposes of the regulated home reversion plan (as defined in
paragraph 5CA).

(3) But sub-paragraph (2) does not apply if—

(a) after ceasing to hold the higher threshold interest for the
30purposes of the regulated home reversion plan, the purchaser
sells the higher threshold interest without delay (except so far
as delay is justified by commercial considerations or cannot
be avoided), and

(b) at no time when the higher threshold interest is held by the
35purchaser as mentioned in sub-paragraph (2) is the dwelling
(or any part of the dwelling) occupied by a non-qualifying
individual.

(4) In this paragraph—

• “the dwelling” means the dwelling to which the relief under
  40paragraph 5CA relates;

• “non-qualifying individual” is to be interpreted in accordance
  with paragraph 5A.””

(4) The amendments made by this section have effect in relation to any land
transaction of which the effective date is on or after 1 April 2016.

130 SDLT higher rate: properties occupied by certain employees etc

(1) Schedule 4A to FA 2003 (SDLT: higher rate for certain transactions) is amended
as follows.

(2) In paragraph 5D (dwellings for occupation by certain employees etc)—

(a) 5in sub-paragraph (1), for “trade” substitute “business”;

(b) in sub-paragraph (2)(b) for “trade” substitute “business”;

(c) for sub-paragraph (4) substitute—

“(4) “Relievable business” means a trade or property rental
business that is run on a commercial basis and with a view to
10profit.””

(3) The heading before paragraph 5D becomes “Dwellings for occupation by certain
employees etc of a relievable business”.

(4) After paragraph 5E insert—

““Acquisition by management company of flat for occupation by caretaker

5EA (1) 15Paragraph 3 does not apply to a chargeable transaction so far as its
subject-matter consists of a higher threshold interest in or over a flat
which—

(a) is one of at least three flats contained in the same premises,
and

(b) 20is acquired by a tenants’ management company for the
purpose of making the flat available for use as caretaker
accommodation.

(2) For the purposes of this paragraph a tenants’ management company
makes a flat available for use “as caretaker accommodation” if it
25makes it available to an individual for use as living accommodation
in connection with the individual’s employment as caretaker of the
premises.

(3) In relation to the acquisition of a flat, a company is a “tenants’
management company” if—

(a) 30the tenants of two or more other flats contained in the
premises are members of the company, and

(b) the company owns, or it is intended that the company will
acquire, the freehold of the premises;

but a company which carries on a relievable business is not a tenants’
35management company.

(4) In this paragraph “premises” means premises constituting the whole
or part of a building.””

(5) After paragraph 5J insert—

“5JA (1) This paragraph applies where relief under paragraph 5EA
40(acquisition by management company of flat for occupation by
caretaker) has been allowed in respect of a higher threshold interest
forming the whole or part of the subject-matter of a chargeable
transaction.

(2) The relief is withdrawn if at any time in the period of three years
beginning with the effective date of the chargeable transaction the
purchaser holds the higher threshold interest otherwise than for the
purpose of making the flat available for use as caretaker
5accommodation.

(3) For the purposes of this paragraph a tenants’ management company
makes a flat available for use “as caretaker accommodation” if it
makes it available to an individual for use as living accommodation
in connection with the individual’s employment as caretaker of the
10premises.””

(6) In paragraph 5E (meaning of “qualifying partner”, “qualifying employee”
etc)—

(a) in sub-paragraph (1) for “trade” substitute “business”;

(b) in sub-paragraph (2) for “qualifying trade” substitute “relievable
15business”;

(c) in sub-paragraph (4)—

(i) in the words before paragraph (a), for “trade” substitute
“relievable business”;

(ii) in paragraph (a)(i), for “trade” substitute “relievable business”.

(7) 20In paragraph 5J (withdrawal of relief under paragraph 5D), in sub-paragraph
(3)—

(a) in paragraph (a), for the words from “trade” to the end substitute
“relievable business”;

(b) in paragraph (c), for the words from “trade” to the end substitute
25“relievable business”.

(8) In paragraph 6G (withdrawal of relief under paragraph 5D in cases involving
alternative finance arrangements), in sub-paragraph (4)—

(a) in paragraph (a), for “qualifying trade” substitute “relievable business”;

(b) in paragraph (c) for “trade” substitute “relievable business”.

(9) 30In paragraph 9 (interpretation), at the appropriate place insert—

• “““relievable business” has the meaning given by paragraph
  5D(4).””

(10) The amendments made by this section have effect in relation to any land
transaction of which the effective date is on or after 1 April 2016.

131 35SDLT: minor amendments of section 55 of FA 2003

In section 55 of FA 2003 (general rules on calculating the amount of stamp duty
land tax chargeable), in subsection (5)—

(a) for “74(2) and (3)” substitute “74(1B)”, and

(b) for “rate” substitute “amount”.

132 40SDLT: property authorised investment funds and co-ownership authorised
contractual schemes

Schedule 16 contains provision about—

(a) the stamp duty land tax treatment of co-ownership authorised
contractual schemes, and

(b) relief from stamp duty land tax for certain acquisitions by such schemes
and by property authorised investment funds.

Annual tax on enveloped dwellings

133 ATED: regulated home reversion plans

(1) 5Part 3 of FA 2013 (annual tax on enveloped dwellings) is amended as follows.

(2) After section 144 insert—

“144A Regulated home reversion plans

(1) A day in a chargeable period is relievable in relation to a single
dwelling interest held by a person (“P”) who is an authorised plan
10provider if—

(a) P has, as plan provider, entered into a regulated home reversion
plan relating to the single dwelling interest, and

(b) the occupation condition is met on that day.

(2) If no qualifying termination event has occurred, the “occupation
15condition” is that a person who was originally entitled to occupy the
dwelling (or any part of it) under the regulated home reversion plan is
still entitled to do so.

(3) If a qualifying termination event has occurred, the “occupation
condition” is that—

(a) 20the single dwelling interest is being held with the intention that
it will be sold without delay (except so far as delay is justified
by commercial considerations or cannot be avoided), and

(b) no non-qualifying individual is permitted to occupy the
dwelling (or any part of it).

(4) 25In this section—

• “authorised plan provider” means a person authorised under the
  Financial Services and Markets Act 2000 to carry on in the
  United Kingdom the regulated activity specified in article
  63B(1) of the Regulated Activities Order (entering into
  30regulated home reversion plan as plan provider);

• “qualifying termination event” is to be interpreted in accordance
  with article 63B of the Regulated Activities Order;

• “the Regulated Activities Order” means the Financial Services and
  Markets (Regulated Activities) Order 2001 (S.I. 2001/544S.I. 2001/544);

• 35“regulated home reversion plan” means an arrangement which is
  a regulated home reversion plan for the purposes of Chapter
  15A of Part 2 of the Regulated Activities Order (but see also
  subsection (6)).

(5) In this section references to entering into a regulated home reversion
40plan “as plan provider” are to be interpreted as if the references were in
the Regulated Activities Order (but see also subsection (6)).

(6) For the purposes of this section—

(a) an arrangement which P entered into before 6 April 2007 is
treated for the purposes of this section as a regulated home
reversion plan entered into by P as plan provider if that
arrangement would have been so treated for the purposes of
5article 63B(1) of the Regulated Activities Order had P entered
into that arrangement on the day mentioned in subsection (1);

(b) an arrangement in relation to which P acquired rights or
obligations before 6 April 2007 is treated for the purposes of this
section as a regulated home reversion plan entered into by P as
10plan provider if that arrangement would have been so treated
for the purposes of article 63B(1) of the Regulated Activities
Order had P acquired those rights or obligations on the day
mentioned in subsection (1).

(7) Section 136 (meaning of “non-qualifying individual”) applies in
15relation to this section as in relation to sections 133 and 135.””

(3) In section 116 (dwelling in grounds of another dwelling), in the list in
subsection (6), at the appropriate place insert—

• ““section 144A (regulated home reversion plans);”.”

(4) In section 117 (dwellings in the same building), in the list in subsection (5), at
20the appropriate place insert—

• ““section 144A (regulated home reversion plans);”.”

(5) In section 132 (effect of reliefs under sections 133 to 150), in the list in subsection
(3), at the appropriate place insert—

• ““section 144A (regulated home reversion plans);”.”

(6) 25In section 159A (relief declaration returns), in the table in subsection (9), at the
appropriate place insert—

(7) The amendments made by this section have effect for chargeable periods
beginning on or after 1 April 2016.

134 ATED: properties occupied by certain employees etc

(1) 35Part 3 of FA 2013 (annual tax on enveloped dwellings) is amended as follows.

(2) Section 145 (occupation by certain employees or partners) is amended in
accordance with subsections (3) to (5).

(3) In subsection (1)—

(a) in paragraph (b), after “qualifying trade” insert “or qualifying property
40rental business”;

(b) in paragraph (d) for “trade” substitute “qualifying trade or qualifying
property rental business”.

(4) After subsection (4) insert—

“(5) For the meaning of “qualifying property rental business” see section
133(3).””

(5) The heading of that section becomes “Occupation by employees or partners of
5a qualifying trade or property rental business”.

(6) In section 146 (meaning of “qualifying employee” and “qualifying partner” in
section 145)—

(a) in subsection (1), after “trade” insert “or property rental business”;

(b) in subsection (2)—

(i) 10in the words before paragraph (a), after “qualifying trade”
insert “or qualifying property rental business”, and

(ii) in paragraph (a)(i), after “trade” insert “or (as the case may be)
property rental business”.

(7) After section 147 insert—

“147A 15Caretaker flat owned by management company

(1) A day in a chargeable period is relievable in relation to a single-
dwelling interest if the dwelling in question is a flat in relation to which
the conditions in subsection (2) are met.

(2) The conditions are that on that day—

(a) 20a company (“the management company”) holds the single-
dwelling interest for the purpose of making the flat available as
caretaker accommodation,

(b) the flat is contained in premises which also contain two or more
other flats,

(c) 25the tenants of at least two of the other flats in the premises are
members of the management company,

(d) the management company owns the freehold of the premises,
and

(e) the management company is not carrying on a trade or property
30rental business.

(3) For the purposes of subsection (2), the management company makes a
flat available “as caretaker accommodation” if it makes it available to an
individual for use as living accommodation in connection with the
individual’s employment as caretaker of the premises.

(4) 35In this section “premises” means premises constituting the whole or
part of a building.””

(8) In section 116 (dwelling in grounds of another dwelling), in the list in
subsection (6)—

(a) in the entry relating to section 145, for “certain employees or partners”
40substitute “employees or partners of a qualifying trade or property
rental business”;

(b) at the appropriate place insert—

• ““section 147A (caretaker flat owned by management
  company);”.”

(9) 45In section 117 (dwellings in the same building), in the list in subsection (5)—

(a) in the entry relating to section 145, for “certain employees or partners”
substitute “employees or partners of a qualifying trade or property
rental business”;

(b) at the appropriate place insert—

• 5““section 147A (caretaker flat owned by management
  company);”.”

(10) In section 132 (effect of reliefs under sections 133 to 150), in the list in subsection
(3)—

(a) in the entry relating to section 145, for “certain employees or partners”
10substitute “employees or partners of a qualifying trade or property
rental business”;

(b) at the appropriate place insert—

• ““section 147A (caretaker flat owned by management
  company);”.”

(11) 15In section 159A (relief declaration returns), in the table in subsection (9), in the
entry relating to section 145, for “(dwellings used for trade purposes:
occupation by certain employees or partners)” substitute “or 147A (occupation
by certain employees etc)”.

(12) The amendments made by this section have effect for chargeable periods
20beginning on or after 1 April 2016.

135 ATED: alternative property finance - land in Scotland

(1) Part 3 of FA 2013 (annual tax on enveloped dwellings) is amended as follows.

(2) Section 157 (land sold to financial institution and leased to person) is amended
in accordance with subsections (3) to (6).

(3) 25In subsection (1)—

(a) in paragraph (a), omit “or section 72 of that Act (land in Scotland sold
to financial institution and leased to person)”;

(b) in paragraph (b), after “transaction” insert “is in England, Wales or
Northern Ireland and”.

(4) 30In subsection (7)—

(a) in the definition of “the first transaction” omit “or (as the case requires)
72”;

(b) in the definition of “the second transaction” omit “or (as the case
requires) 72”.

(5) 35Omit subsection (10).

(6) The heading of that section becomes “Land in England, Wales or Northern
Ireland sold to financial institution and leased to person”.

(7) After section 157 insert—

“157A Land in Scotland sold to financial institution and leased to person

(1) 40This section applies where Conditions A and B are met.

(2) Condition A is that arrangements are entered into between a person
(“the lessee”) and a financial institution under which the institution—

(a) purchases a major interest in land (“the first transaction”),

(b) grants to the lessee out of that interest a lease (if the interest
acquired is the interest of the owner) or a sub-lease (if the
interest acquired is the tenant’s right over or interest in a
property subject to a lease) (“the second transaction”), and

(c) 5enters into an agreement under which the lessee has a right to
require the institution to transfer the major interest purchased
by the institution under the first transaction.

(3) Condition B is that the land in which the institution purchases a major
interest under the first transaction is in Scotland and consists of or
10includes one or more dwellings or parts of a dwelling.

(4) If the lessee is a company, this Part has effect in relation to times when
the arrangements are in operation (see subsection (5)) as if—

(a) the interest held by the financial institution as mentioned in
subsection (5)(b) were held by the lessee (and not by the
15financial institution), and

(b) the lease or sub-lease granted under the second transaction had
not been granted.

(5) The reference in subsection (4) to times when the arrangements are in
operation is to times when—

(a) 20the lessee holds the interest granted to it under the second
transaction, and

(b) the interest purchased under the first transaction is held by a
financial institution.

(6) A company treated under subsection (4)(a) as holding an interest at a
25particular time is treated as holding it as a member of a partnership if
at the time in question the company holds the interest granted to it
under the second transaction as a member of the partnership (and this
Part has effect accordingly in relation to the other members of the
partnership).

(7) 30In relation to times when the arrangements operate for the benefit of a
collective investment scheme (see subsection (8)), this Part has effect as
if—

(a) the interest held by the financial institution as mentioned in
subsection (8)(b) were held by the lessee for the purposes of a
35collective investment scheme (and were not held by the
financial institution), and

(b) the lease or sub-lease granted under the second transaction had
not been granted.

(8) The reference in subsection (7) to times when the arrangements operate
40for the benefit of a collective investment scheme is to times when—

(a) the lessee holds the interest granted to it under the second
transaction for the purposes of a collective investment scheme,
and

(b) the interest purchased under the first transaction is held by a
45financial institution.

(9) In this section “financial institution” has the same meaning as in section
71A of FA 2003 (see section 73BA of that Act).

(10) References in this section to a “major interest” in land are to—

(a) ownership of land, or

(b) the tenant’s right over or interest in land subject to a lease.

(11) Where the lessee is an individual, references in subsections (7) and (8)
to the lessee are to be read, in relation to times after the death of the
5lessee, as references to the lessee’s personal representatives.””

(8) The amendments made by this section have effect for chargeable periods
beginning on or after 1 April 2016.

Part 9 Other taxes and duties

10Stamp duty and stamp duty reserve tax

136 Stamp duty: acquisition of target company’s share capital

(1) Section 77 of FA 1986 (acquisition of target company’s share capital) is
amended as follows.

(2) In subsection (3), omit the “and” at the end of paragraph (g) and after
15paragraph (h) insert “, and

(i) at the time the instrument mentioned in subsection (1) is
executed there are no disqualifying arrangements, within the
meaning given by section 77A, in existence.””

(3) In subsection (3A) for “(3)” substitute “(3)(b) to (h)”.

(4) 20In subsection (4) after “this section” insert “and section 77A”.

(5) After section 77 of FA 1986 insert—

“77A Disqualifying arrangements

(1) This section applies for the purposes of section 77(3)(i).

(2) Arrangements are “disqualifying arrangements” if it is reasonable to
25assume that the purpose, or one of the purposes, of the arrangements is
to secure that—

(a) a particular person obtains control of the acquiring company, or

(b) particular persons together obtain control of that company.

(3) But neither of the following are disqualifying arrangements—

(a) 30the arrangements for the issue of shares in the acquiring
company which is the consideration for the acquisition
mentioned in section 77(3);

(b) any relevant merger arrangements.

(4) In subsection (3) “relevant merger arrangements” means arrangements
35for the issue of shares in the acquiring company to the shareholders of
a company (“company B”) other than the target company (“company
A”) in a case where—

(a) that issue of shares to the shareholders of company B would be
the only consideration for the acquisition by the acquiring
40company of the whole of the issued share capital of company B,

(b) the conditions in section 77(3)(c) and (e) would be met in
relation to that acquisition (if that acquisition were made in
accordance with the arrangements), and

(c) the conditions in paragraphs (f) to (h) of section 77(3) would be
5met in relation to that acquisition if—

(i) that acquisition were made in accordance with the
arrangements, and

(ii) the shares in the acquiring company issued as
consideration for the acquisition of the share capital of
10company A were ignored for the purposes of those
paragraphs;

and in section 77(3)(e) to (h) and (3A) as they apply by virtue of this
subsection, references to the target company are to be read as references
to company B.

(5) 15Where—

(a) arrangements within any paragraph of subsection (3) are part of
a wider scheme or arrangement, and

(b) that scheme or arrangement includes other arrangements
which—

(i) 20fall within subsection (2), and

(ii) do not fall within any paragraph of subsection (3),

those other arrangements are disqualifying arrangements
despite anything in subsection (3).

(6) In this section—

• 25“the acquiring company” has the meaning given by section 77(1);

• “arrangements” includes any agreement, understanding or
  scheme (whether or not legally enforceable);

• “control” is to be read in accordance with section 1124 of the
  Corporation Tax Act 2010;

• 30“the target company” has the meaning given by section 77(1).””

(6) The amendments made by this section have effect in relation to any instrument
executed on or after 29 June 2016 (and references to arrangements in any
provision inserted by this section include arrangements entered into before
that date).

137 35Stamp duty: transfers to depositaries or providers of clearance services

(1) Part 3 of FA 1986 (stamp duty) is amended as follows.

(2) In section 67 (depositary receipts)—

(a) in subsection (2), for the words from “1.5% of” to the end substitute
“1.5% of—

“(a) 40the amount or value of the consideration for the sale to
which the instrument gives effect, or

(b) where subsection (2A) applies—

(i) the amount or value of the consideration for the
sale to which the instrument gives effect, or

(ii) 45if higher, the value of the securities at the date
the instrument is executed.”,”