Finance (No. 2) Bill (HC Bill 134)

Finance (No. 2) BillPage 30

Stamp duty land tax

40 Higher rates for additional dwellings

Schedule 11 contains amendments to Schedule 4ZA to FA 2003 (stamp duty
land tax: higher rates for additional dwellings and dwellings purchased by
5companies).

41 Relief for first-time buyers

(1) Part 4 of FA 2003 (stamp duty land tax) is amended as follows.

(2) After section 57A insert—

57B First-time buyers

(1) 10Schedule 6ZA provides relief for first-time buyers.

(2) Any relief under that Schedule must be claimed in a land transaction
return or an amendment of such a return.”

(3) After Schedule 6 insert—

“Schedule 6ZA Relief for first-time buyers
15Part 1 Eligibility for relief
Eligibility for relief

1 (1) Relief may be claimed for a chargeable transaction if the following
conditions are met (but this is subject to sub-paragraph (7)).

(2) 20The first condition is that the main subject-matter of the transaction
consists of a major interest in a single dwelling (“the purchased
dwelling”).

(3) The second condition is that the relevant consideration for the
transaction (other than any consisting of rent) is not more than
25£500,000.

(4) The third condition is that the purchaser, or (if more than one) each
of the purchasers, is a first-time buyer who intends to occupy the
purchased dwelling as the purchaser’s only or main residence.

(5) The fourth condition is that—

(a) 30the transaction is not linked to another land transaction, or

(b) the transaction is linked only to land transactions that are
within sub-paragraph (6).

(6) A land transaction is within this sub-paragraph if the main subject-
matter of the transaction consists of—

(a) 35an interest in land that is or forms part of the garden or
grounds of the purchased dwelling, or

Finance (No. 2) BillPage 31

(b) an interest in or right over land that subsists for the benefit
of—

(i) the purchased dwelling, or

(ii) land that is or forms part of the garden or grounds of
5the purchased dwelling.

(7) Relief may not be claimed under this paragraph for a chargeable
transaction if it is a higher rates transaction for the purposes of
paragraph 1 of Schedule 4ZA.

Eligibility for relief: linked transactions within paragraph 1(6)

2 (1) 10Where a land transaction (“the main transaction”) is eligible for relief
under paragraph 1 (or would be if it were a chargeable transaction),
relief may also be claimed for any chargeable transaction that is
linked to the main transaction.

(2) But relief may not be claimed under this paragraph for a chargeable
15transaction if the purchaser, or (if more than one) any of the
purchasers in relation to the transaction is not a purchaser in relation
to the main transaction.

Eligibility for relief: alternative finance arrangements

3 (1) This paragraph applies in relation to a land transaction which is the
20first transaction under an alternative finance arrangement entered
into between a person and a financial institution.

(2) The person (rather than the institution) is to be treated as the
purchaser in relation to the transaction for the purposes of
paragraphs 1(4) and 2(2).

(3) 25In this paragraph—

  • “alternative finance arrangement” means an arrangement of a
    kind mentioned in section 71A(1) or 73(1),

  • “financial institution” has the meaning it has in those sections
    (see section 73BA), and

  • 30“first transaction”, in relation to an alternative finance
    arrangement, has the meaning given by section 71A(1)(a) or
    (as the case may be) section 73(1)(a)(i).

Part 2 The Relief
35The relief

4 If relief is claimed under paragraph 1 or 2 for a chargeable
transaction, the amount of tax chargeable in respect of the
transaction is to be determined as if in section 55(1B) (amount of tax
chargeable: general) for Table A there were substituted—

40“Table A: Residential

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Relevant consideration Percentage
So much as does not exceed £300,000 0%
Any remainder (so far as not
exceeding £500,000)
5%”
5Withdrawal of relief

5 (1) This paragraph applies if—

(a) relief is claimed under paragraph 1 or 2 for a chargeable
transaction (“the first transaction”), and

(b) the effect of another land transaction (“the later transaction”)
10that is linked to the first transaction is that the first
transaction ceases to be a transaction for which relief may be
claimed under that paragraph.

(2) Tax or (as the case may be) additional tax is chargeable on the first
transaction as if the claim had not been made.

15Part 3 Interpretation
“First-time buyer”

6 (1) In this Schedule “first-time buyer” means an individual who—

(a) has not previously been a purchaser in relation to a land
20transaction the main subject-matter of which was a major
interest in a dwelling,

(b) has not previously acquired an equivalent interest in a
dwelling situated in a country or territory outside England,
Wales and Northern Ireland,

(c) 25has not previously been, or been one of the persons who was,
“the person” for the purposes of section 71A or 73 in a case
where the main subject-matter of the first transaction within
the meaning of the section concerned was a major interest in
a dwelling, and

(d) 30would not have been such a person for those purposes in
such a case if the provisions mentioned in paragraph (c) had
been in force, and had had effect in the country or territory
concerned at all material times (subject, where required, to
appropriate modifications).

(2) 35For the purposes of sub-paragraph (1)(b) and (d), ignore a lease
which has less than 21 years to run at the beginning of the day after
the date on which it is acquired.

“Relevant consideration”

7 In this Schedule “relevant consideration” means—

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(a) in the case of a transaction that is not one of a number of
linked transactions, the chargeable consideration for the
transaction, and

(b) in the case of a transaction that is one of a number of linked
5transactions, the total of the chargeable consideration for all
those transactions.

“Major interest”

8 The main subject-matter of a transaction is not a major interest for the
purposes of this Schedule if it is a term of years absolute which has
10less than 21 years to run at the beginning of the day after the effective
date of the transaction.

What counts as a dwelling

9 (1) This paragraph sets out rules for determining what counts as a
dwelling for the purposes of this Schedule.

(2) 15A building or part of a building counts as a dwelling if—

(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.

(3) Land that is, or is to be, occupied or enjoyed with a dwelling as a
20garden or grounds (including any building or structure on that land)
is taken to be part of that dwelling.

(4) Land that subsists, or is to subsist, for the benefit of a dwelling is
taken to be part of that dwelling.

(5) The main subject-matter of a transaction is also taken to consist of a
25major interest in a dwelling if—

(a) substantial performance of a contract constitutes the effective
date of that transaction by virtue of a relevant deeming
provision,

(b) the main subject-matter of the transaction consists of a major
30interest in a building, or a part of a building, that is to be
constructed or adapted under the contract for use as a single
dwelling, and

(c) construction or adaptation of the building, or part of a
building, has not begun by the time the contract is
35substantially performed.

(6) In sub-paragraph (5)—

  • “contract” includes any agreement,

  • “relevant deeming provision” means any of sections 44 to 45A
    or paragraph 5(1) or (2) of Schedule 2A or paragraph 12 of
    40Schedule 17A, and

  • “substantially performed” has the same meaning as in section
    44.

(7) A building or part of a building used for a purpose specified in
section 116(2) or (3) is not used as a dwelling for the purposes of sub-
45paragraphs (2) or (5).

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(8) Where a building or part of a building is used for a purpose
mentioned in sub-paragraph (7), no account is to be taken for the
purposes of sub-paragraph (2) of its suitability for any other use.”

(4) In section 110 (approval of regulations under general power) at the end
5insert—

(7) This section does not apply to regulations containing only provision
varying Schedule 6ZA or paragraph 16 of Schedule 9 which does not
increase any person’s liability to tax.”

(5) In Schedule 9 (right to buy, shared ownership leases etc), at the end insert—

10“First-time buyers

16 (1) This paragraph applies where—

(a) a lease is granted as mentioned in sub-paragraph (1)(a) of
paragraph 2 and the conditions in sub-paragraph (2) of that
paragraph are met but no election is made for tax to be
15charged in accordance with that paragraph,

(b) a lease is granted as mentioned in sub-paragraph (1)(a) of
paragraph 4 and the conditions in sub-paragraph (2) of that
paragraph are met but no election is made for tax to be
charged in accordance with that paragraph,

(c) 20paragraph 4A applies in relation to the acquisition of an
interest (but the acquisition is not exempt from charge by
virtue of sub-paragraph (2) of that paragraph),

(d) a shared ownership trust is declared but no election is made
for tax to be charged in accordance with paragraph 9, or

(e) 25an equity-acquisition payment is made under a shared
ownership trust (but the equity-acquisition payment, and the
consequential increase in the purchaser’s beneficial interest,
are not exempt from charge by virtue of paragraph 10).

(2) Schedule 6ZA (relief for first-time buyers) does not apply in relation
30to—

(a) the acquisition of the lease,

(b) the acquisition of the interest,

(c) the declaration of the shared ownership trust, or

(d) the equity-acquisition payment and the consequential
35increase in the purchaser’s beneficial interest.”

(6) The following provisions (which are spent provisions relating to first-time
buyers) are repealed—

(a) section 57AA of FA 2003,

(b) section 73CA of that Act,

(c) 40section 110(6) of that Act,

(d) paragraph 15 of Schedule 9 to that Act, and

(e) section 6 of FA 2010.

(7) In Schedule 2 to the Wales Act 2014 (amendments relating to the disapplication
of UK stamp duty land tax in relation to Wales), after paragraph 9 insert—

9A (1) 45Paragraph 6 of Schedule 6ZA (relief for first-time buyers: definition
of “first-time buyer”) is amended as follows.

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(2) In sub-paragraph (1)(b)—

(a) after “acquired” insert

(i) ”, and

(b) at the end insert or

(ii) 5an interest of a kind mentioned in section
117(2) in a dwelling situated in Wales,”.”

(3) In sub-paragraph (2) after “lease” insert “or, in the case of a dwelling
situated in Wales, a term of years absolute”.”

(8) The amendments made by subsections (1) to (5) have effect in relation to any
10land transaction of which the effective date is or is after 22 November 2017.

Landfill tax

42 Landfill tax: disposals not made at landfill sites, etc

(1) Schedule 12 makes provision about landfill tax, including provision for
disposals of material elsewhere than at landfill sites to be chargeable.

(2) 15That Schedule has effect only in relation to disposals made in England or
Northern Ireland.

Excise duties

43 Air passenger duty: rates of duty from 1 April 2019

(1) Chapter 4 of Part 1 of FA 1994 (air passenger duty) is amended as follows.

(2) 20In section 30(4A)(b) as amended by F(No.2)A 2017 (rate for long haul
departures not from Northern Ireland: travel not in sole or lowest class, and
higher rate does not apply), for “£156” substitute “£172”.

(3) In section 30(4E)(d) (higher rate for long haul departures not from Northern
Ireland is six times standard-class long haul rate), for “six” substitute “6.6”.

(4) 25In section 30A(5A)(c)(ii) (higher rate for long haul departures from Northern
Ireland if not set by Act of the Northern Ireland Assembly is six times standard-
class rate for long haul departures from Northern Ireland), for “six” substitute
“6.6”.

(5) The amendments made by this section have effect in relation to the carriage of
30passengers beginning on or after 1 April 2019.

44 VED: rates for light passenger vehicles, light goods vehicles, motorcycles etc

(1) Schedule 1 to VERA 1994 (annual rates of duty) is amended as follows.

(2) In paragraph 1 (general rate)—

(a) in sub-paragraph (2) (vehicle not covered elsewhere in Schedule with
35engine cylinder capacity exceeding 1,549cc), for “£245” substitute
“£255”, and

(b) in sub-paragraph (2A) (vehicle not covered elsewhere in Schedule with
engine cylinder capacity not exceeding 1,549cc), for “£150” substitute
“£155”.

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(3) In paragraph 1B (rates for light passenger vehicles registered before 1 April
2017)—

(a) for the Table substitute—

“CO2 emissions figure Rate
(1) (2) (3) 5(4)
Exceeding Not exceeding Reduced rate Standard rate
g/km g/km £ £
100 110 10 20
110 120 20 30
120 130 110 10120
130 140 130 140
140 150 145 155
150 165 185 195
165 175 220 230
175 185 240 15250
185 200 280 290
200 225 305 315
225 255 530 540
255 545 555”;

(b) 20in the sentence immediately following the Table, for paragraphs (a) and
(b) substitute—

(a) in column (3), in the last two rows, “305” were
substituted for “530” and “545”, and

(b) in column (4), in the last two rows, “315” were
25substituted for “540” and “555”.”

(4) For paragraph 1GC (rates on first licence for light passenger vehicles registered
on or after 1 April 2017) substitute—

1GC (1) This paragraph applies for the purpose of determining the rate at
which vehicle excise duty is to be paid on the first vehicle licence for
30a vehicle to which this Part of this Schedule applies.

(2) If the vehicle is not a higher rate diesel vehicle, the annual rate of
duty applicable to the vehicle is determined in accordance with
Table 1 by reference to—

(a) the applicable CO2 emissions figure, and

(b) 35whether the vehicle qualifies for the reduced rate of duty or
is liable to the standard rate of duty.

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(3) If the vehicle is a higher rate diesel vehicle, the annual rate of duty
applicable to the vehicle is determined in accordance with Table 2 by
reference to the applicable CO2 emissions figure.

Table 1 - vehicles other than higher rate diesel vehicles
CO2 emissions figure 5Rate
(1) (2) (3) (4)
Exceeding Not exceeding Reduced rate Standard rate
g/km g/km £ £
0 50 10
50 75 15 1025
75 90 95 105
90 100 115 125
100 110 135 145
110 130 155 165
130 150 195 15205
150 170 505 515
170 190 820 830
190 225 1230 1240
225 255 1750 1760
255 - 2060 202070
Table 2 - higher rate diesel vehicles
CO2 emissions figure Rate
(1) (2) (3)
Exceeding Not exceeding Rate
g/km g/km 25£
0 50 25
50 75 105
75 90 125

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Table 2 - higher rate diesel vehicles
CO2 emissions figure Rate
(1) (2) (3)
Exceeding Not exceeding Rate
g/km g/km 5£
90 100 145
100 110 165
110 130 205
130 150 515
150 170 10830
170 190 1240
190 225 1760
225 255 2070
255 - 2070

(4) 15For the purposes of this paragraph a vehicle is a higher rate diesel
vehicle if it is constructed so as to be propelled by diesel and—

(a) it does not have real driving emissions figures for NOx, or

(b) it has real driving emissions figures for NOx and either of
those figures exceeds 80 milligrams per kilometre driven.

(5) 20A vehicle has real driving emissions figures for NOx if it is first
registered on the basis of an EU certificate of conformity which
declares, in terms of milligrams per kilometre driven—

(a) a maximum real driving emissions value for NOx for urban
real driving emissions trips, and

(b) 25a maximum real driving emissions value for NOx for
complete real driving emissions trips.

(6) The car’s real driving emissions figures for NOx are those declared
values.

(7) “Diesel” means any diesel fuel within Article 2 of Directive 98/70/
30EC of the European Parliament and of the Council.”

(5) In paragraph 1J (rates for light goods vehicles) in paragraph (a) for “£240”
substitute “£250”.

(6) In paragraph 2(1) (rates for motorcycles)—

(a) in paragraph (a), for “£18” substitute “£19”,

(b) 35in paragraph (b), for “£41” substitute “£42”,

(c) in paragraph (c), for “£62” substitute “£64”, and

(d) in paragraph (d), for “£85” substitute “£88”.

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(7) The amendments made by this section have effect in relation to licences taken
out on or after 1 April 2018.

45 Tobacco products duty: rates

(1) TPDA 1979 is amended as follows.

(2) 5For the table in Schedule 1 substitute—

“TABLE

1 Cigarettes

An amount equal to the higher
of—

(a)

16.5% of the retail price
10plus £217.23 per thousand
cigarettes, or

(b)

£280.15 per thousand
cigarettes.


2 Cigars £270.96 per kilogram
3 Hand-rolling tobacco 15£221.18 per kilogram
4 Other smoking tobacco and
chewing tobacco
£119.13 per kilogram”

(3) The amendment made by this section is treated as having come into force at
6pm on 22 November 2017.

20Part 3 Miscellaneous and final

Customs enforcement powers

46 Power to enter premises and inspect goods

(1) Section 24 of FA 1994 (power to enter premises and inspect goods) is amended
25as follows.

(2) The existing text becomes subsection (1).

(3) In that subsection—

(a) at the beginning insert “This section applies”;

(b) omit the words after paragraph (b).

(4) 30After that subsection insert—

(2) The officer may at any reasonable time enter and inspect the premises.

(3) The officer may inspect, examine and take account of any goods found
on the premises.

(4) The officer may require a relevant person to provide any assistance that
35is reasonable for the purpose of exercising the power in subsection (3).