Finance (No. 2) Bill (151)

Finance (No. 2) BillPage 170

(4) In the application of section 832 of ITTOIA 2005 in relation to the
income, subsection (2) of that section has effect with the omission of
its paragraph (b).”

Consequential amendments

20 (1) 5Section 97 of TCGA 1992 (settlements: supplementary provisions) is
amended as follows.

(2) In subsection (1)(a) (meaning of “capital payment”), for “not chargeable to
income tax on the recipient or,” substitute neither—

chargeable to income tax on the recipient, nor

(ii) 10chargeable to income tax on another person under
any of sections 643A, 643J and 643L of ITTOIA 2005
and sections 733A, 733C and 733E of ITA 2007,

or,”.

(3) In subsection (3) (cases where benefit may be treated as chargeable gain and
15as income), for “section 733 of ITA 2007 treated as the recipient’s” substitute
“section 643A or 643J or 643L of ITTOIA 2005, or sections 731 to 733E of ITA
2007, treated as an individual’s”.

(4) In consequence of sub-paragraph (3), in Schedule 1 to ITA 2007 omit
paragraph 302.

(5) 20The references to section 733A of ITA 2007 that are inserted by sub-
paragraphs (2) and (3) include that section as it has effect for the tax year
2017-18.

Commencement etc of amendments in ITTOIA 2005 and ITA 2007

21 (1) Subject as follows, the amendments made by paragraphs 3 to 19 have effect
25for the tax year 2018-19 and subsequent tax years.

(2) None of the references to an earlier tax year in Step 1 of the new section
643B(1) of ITTOIA 2005, or in new section 643C(2) of ITTOIA 2005, includes
any tax year earlier than the tax year 2018-19 except that, in the phrase
“benefits provided by the trustees in the year or in an earlier tax year” in the
30definition of “TOAA” in new section 643C(2) of ITTOIA 2005, the reference
to an earlier tax year does include tax years earlier than the tax year 2018-19.

(3) New sections 643I to 643L and 643N of ITTOIA 2005 have effect only in
relation to onward payments made on or after 6 April 2018.

(4) New section 643M of ITTOIA 2005, and new sections 733B to 733E and 735C
35of ITA 2007, have effect only in relation to onward payments made on or
after 6 April 2018, but have effect in relation to an onward payment made on
or after that date even where the onward payment is referable to a benefit
received before that date.

(5) The amendment in section 733A(7) of ITA 2007 made by paragraph 15 also
40has effect for the tax year 2017-18.

22 The new section 643D(3) of ITTOIA 2005 is to be treated as inserted by the
Treasury under the powers to make regulations conferred by section 354 of
TIOPA 2010.

Finance (No. 2) BillPage 171

Section 40

SCHEDULE 11 Stamp duty land tax: higher rates for additional dwellings

1 Schedule 4ZA to FA 2003 (stamp duty land tax: higher rates for additional
dwellings and dwellings purchased by companies) is amended as follows.

5Previous residence required to be disposed of entirely

2 (1) Paragraph 3 (single dwelling transactions: purchaser is an individual) is
amended as follows.

(2) In sub-paragraph (6)—

(a) after paragraph (b) insert—

(ba) 10immediately after the effective date of the previous
transaction, neither the purchaser nor the purchaser’s
spouse or civil partner had a major interest in the sold
dwelling,” and

(b) in paragraph (c) for “that period of three years” substitute “the
15period of three years referred to in paragraph (b)”.

(3) After sub-paragraph (6) insert—

(6A) Sub-paragraph (6)(ba) does not apply in relation to a spouse or
civil partner of the purchaser if the two of them were not living
together (see paragraph 9(3)) on the effective date of the
20transaction concerned.”

(4) In sub-paragraph (7) after paragraph (b) (but before “and”) insert—

(ba) immediately after the effective date of that other land
transaction, neither the purchaser nor the purchaser’s
spouse or civil partner has a major interest in the sold
25dwelling,”.

(5) After sub-paragraph (7) insert—

(8) Sub-paragraph (7)(ba) does not apply in relation to a spouse or
civil partner of the purchaser if the two of them are not living
together (see paragraph 9(3)) on the effective date of that other
30land transaction.”

Exception where purchaser has prior interest in purchased dwelling

3 After paragraph 7 insert—

“Exception where purchaser has prior interest in purchased dwelling

7A (1) A chargeable transaction which would (but for this paragraph) fall
35within paragraph 3 or paragraph 6 does not fall within that
paragraph if—

(a) the purchaser had a major interest (“the prior interest”) in
the relevant purchased dwelling immediately before the
effective date of the transaction, and

(b) 40the relevant purchased dwelling had been the purchaser’s
only or main residence throughout the period of three
years ending with the effective date of the transaction.

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(2) Sub-paragraph (1) does not apply if—

(a) the prior interest is a term of years absolute or a leasehold
estate, and

(b) immediately before the effective date of the transaction,
5the remaining term of the prior interest is less than 21
years.

(3) Sub-paragraph (1) does not apply if immediately before the
effective date of the transaction—

(a) the purchaser is beneficially entitled as a joint tenant to the
10prior interest, and

(b) there are more than three other joint tenants.

(4) Sub-paragraph (1) does not apply if immediately before the
effective date of the transaction the purchaser is beneficially
entitled as a tenant in common or coparcener to less than a quarter
15of the prior interest.

(5) In this paragraph “relevant purchased dwelling” means—

(a) the purchased dwelling mentioned in paragraph 3(1)(b), or
(as the case may be)

(b) the purchased dwelling which meets the conditions
20mentioned in paragraph 6(1)(c).”

Exception where spouses and civil partners purchasing from one another

4 After paragraph 9 insert—

“Spouses and civil partners purchasing from one another

9A (1) A chargeable transaction is not a higher rates transaction for the
25purposes of paragraph 1 if—

(a) there is only one purchaser,

(b) there is only one vendor, and

(c) on the effective date of the transaction the two of them
are—

(i) 30married to, or civil partners of, each other, and

(ii) living together (see paragraph 9(3)).

(2) Where—

(a) there are two purchasers in relation to a chargeable
transaction, and

(b) 35one of them (“P”) is also the vendor in relation to the
transaction,

P is to be treated for the purposes of sub-paragraph (1) as not being
a purchaser.

(3) Where—

(a) 40there are two vendors in relation to a chargeable
transaction, and

(b) one of them (“V”) is also the purchaser in relation to the
transaction,

V is to be treated for the purposes of sub-paragraph (1) as not
45being a vendor.”

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Property adjustment on divorce, dissolution of civil partnership etc

5 After paragraph 9A (as inserted by paragraph 4 of this Schedule) insert—

“Property adjustment on divorce, dissolution of civil partnership etc

9B (1) This paragraph applies where—

(a) 5a person (“A”) has a major interest in a dwelling,

(b) a property adjustment order has been made in respect of
the interest for the benefit of another person (“B”), and

(c) the dwelling—

(i) is B’s only or main residence, and

(ii) 10is not A’s only or main residence.

(2) A is to be treated for the purposes of this Schedule as not having
the interest in the dwelling.

(3) “Property adjustment order” means—

(a) an order under section 24(1)(b) of the Matrimonial Causes
15Act 1973 (property adjustment orders in connection with
matrimonial proceedings),

(b) an order under section 17(1)(a)(ii) of the Matrimonial and
Family Proceedings Act 1984 (property adjustment orders
after overseas divorce) corresponding to such an order as
20is mentioned in paragraph (a),

(c) an order under Article 26(1)(b) of the Matrimonial Causes
(Northern Ireland) Order 1978 (property adjustment
orders in connection with divorce proceedings etc),

(d) an order under Article 21(a)(ii) of the Matrimonial and
25Family Proceedings (Northern Ireland) Order 1989
(property adjustment orders after overseas divorce)
corresponding to such an order as is mentioned in
paragraph (c),

(e) an order under paragraph 7(1)(b) of Schedule 5 or
30paragraph 7(1)(b) of Schedule 15 to the Civil Partnership
Act 2004 (property adjustment orders in connection with
dissolution etc of civil partnership), or

(f) an order under paragraph 9 of Schedule 7 or paragraph 9
of Schedule 17 to the Civil Partnership Act 2004 (property
35adjustment orders in connection with overseas dissolution
etc of civil partnership) corresponding to such an order as
is mentioned in paragraph (e).”

Purchase etc by person appointed under Mental Capacity Act 2005 to make decisions for a child

6 (1) In paragraph 12 (settlements and bare trusts with beneficiaries who are
40children) after sub-paragraph (1) insert—

(1A) But this paragraph does not apply if the trustee (or any of the
trustees) of the settlement or bare trust concerned—

(a) was the purchaser in relation to the land transaction,

(b) holds the interest in the dwelling, or

(c) 45disposed of the interest in the dwelling,

Finance (No. 2) BillPage 174

in the exercise of powers conferred on the trustee by reason of a
relevant court appointment made in respect of the child
concerned.

(1B) In sub-paragraph (1A) “relevant court appointment” means—

(a) 5an appointment under section 16 of the Mental Capacity
Act 2005,

(b) an appointment under section 113 of the Mental Capacity
Act (Northern Ireland) 2016, or

(c) an equivalent appointment under the law of a country or
10territory outside England, Wales and Northern Ireland.”

(2) In paragraph 17 (dwellings outside England, Wales and Northern Ireland)
after sub-paragraph (5) insert—

(5A) Sub-paragraph (4) does not apply if the interest in the dwelling
was acquired in the child’s name or on the child’s behalf by a
15person acting in exercise of powers conferred on that person by
reason of a relevant court appointment made in respect of the
child.

(5B) In sub-paragraph (5A) “relevant court appointment” has the
meaning given by paragraph 12(1B).”

20Minor and consequential amendments

7 In paragraph 2, after sub-paragraph (3) insert—

(3A) Sub-paragraphs (2) and (3) are subject to paragraph 9A (spouses
and civil partners purchasing from one another).”

8 (1) Paragraph 3 is amended as follows.

(2) 25After sub-paragraph (1) insert—

(1A) But sub-paragraph (1) is subject to paragraph 7A.”

(3) In sub-paragraph (7), in the opening words, for “may become” substitute “is
also”.

9 In paragraph 6—

(a) 30after sub-paragraph (1) insert—

(1A) But sub-paragraph (1) is subject to paragraph 7A.”, and

(b) in sub-paragraph (3) for “and (7)” substitute “to (8)”.

10 In paragraph 8—

(a) in sub-paragraph (1) for “ceases to be” substitute “is not”,

(b) 35in sub-paragraph (2) for “was” substitute “is”,

(c) in sub-paragraph (3) for “its ceasing to be a higher rates transaction”
substitute “the application of paragraph 3(7)”, and

(d) in sub-paragraph (4) for “its ceasing to be a higher rates transaction”
substitute “the application of paragraph 3(7)”.

11 40In paragraph 9(3) for “paragraph” substitute “Schedule”.

12 (1) Paragraph 12 is amended as follows.

(2) In sub-paragraph (2)(a) after “any” insert “relevant”.

Finance (No. 2) BillPage 175

(3) For sub-paragraph (3) substitute—

(3) For the purposes of sub-paragraph (2) a spouse or civil partner of
P is “relevant” if the spouse or civil partner—

(a) is not a parent of the child, and

(b) 5is living together with P (see paragraph 9(3)).”

(4) Omit sub-paragraph (4).

13 In the italic heading before paragraph 17 omit “, Wales”.

14 (1) Paragraph 17 is amended as follows.

(2) In sub-paragraph (1) omit “, Wales”.

(3) 10After sub-paragraph (1) insert—

(1A) In the application of those provisions in relation to a dwelling
situated in Wales—

(a) references to a “major interest” in the dwelling are to an
interest in the dwelling of a kind mentioned in section
15117(2),

(b) references to a “land transaction” in relation to the
dwelling are to the acquisition of an interest in the
dwelling, and

(c) references to the “effective date” of a land transaction in
20relation to the dwelling are to the date on which the
interest in the dwelling is acquired.”

(4) In sub-paragraph (3)—

(a) in the words before paragraph (a) after “(1)” insert “, (1A)”,

(b) in paragraph (a)—

(i) 25after “(6)(b)” insert “, (ba)”, and

(ii) after “(7)(b)” insert “, (ba)”, and

(c) after paragraph (b) insert—

(ba) paragraph 9B,”

(5) In sub-paragraph (4)—

(a) 30omit “, Wales”, and

(b) after “any” insert “relevant”.

(6) For sub-paragraph (5) substitute—

(5) For the purposes of sub-paragraph (4) a spouse or civil partner of
P is “relevant” if the spouse or civil partner—

(a) 35is not a parent of the child, and

(b) is living together with P (see paragraph 9(3)).”

(7) Omit sub-paragraph (6).

15 In section 128(9)(b) of FA 2016 for ““during that period of three years””
substitute “the words from “during” to “paragraph (b)””.

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Commencement

16 (1) The amendments made by this Schedule (other than those made by
paragraphs 13 and 14(2), (3), (4)(a) and (5)(a)) have effect in relation to any
land transaction of which the effective date is, or is after, 22 November 2017.

(2) 5But the amendments made by paragraph 2 do not have effect in relation to a
transaction—

(a) effected in pursuance of a contract entered into and substantially
performed before 22 November 2017, or

(b) effected in pursuance of a contract entered into before that date and
10not excluded by sub-paragraph (3).

(3) A transaction effected in pursuance of a contract entered into before 22
November 2017 is excluded by this sub-paragraph if—

(a) there is any variation of the contract, or assignment of rights under
the contract, on or after 22 November 2017,

(b) 15the transaction is effected in consequence of the exercise on or after
that date of any option, right of pre-emption or similar right, or

(c) on or after that date there is an assignment, subsale or other
transaction relating to the whole or part of the subject-matter of the
contract as a result of which a person other than the purchaser under
20the contract becomes entitled to call for a conveyance.

(4) The amendments made by paragraphs 13 and 14(2), (3), (4)(a) and (5)(a)
have effect in relation to any land transaction in relation to which the
amendment made by section 16(2) of the Wales Act 2014 (disapplication of
UK stamp duty land tax) has effect.

Section 42

25SCHEDULE 12 Landfill tax: disposals not made at landfill sites, etc

Part 1 Amendments of Part 3 of FA 1996

Introduction

1 30Part 3 of FA 1996 (landfill tax) is amended as set out in the following
provisions of this Part of this Schedule.

Taxable disposals

2 (1) Section 40 (charge to tax) is amended as follows.

(2) For subsection (2) substitute—

(2) 35A taxable disposal takes place where material is disposed of and
either—

(a) the disposal is made at a landfill site (see subsection (4)), or

(b) the disposal requires a permit or licence mentioned in
subsection (4) but is not made at a landfill site.”

Finance (No. 2) BillPage 177

(3) After subsection (3) insert—

(4) Land is a landfill site at a given time if at that time—

(a) a permit under regulations made under—

(i) section 2 of the Pollution Prevention and Control Act
51999, or

(ii) Article 4 of the Environment (Northern Ireland)
Order 2002 (S.I. 2002/3153 (N.I. 7)S.I. 2002/3153 (N.I. 7)),

is in force in relation to the land and authorises deposits or
disposals in or on the land,

(b) 10a waste management licence issued under Part 2 of the Waste
and Contaminated Land (Northern Ireland) Order 1997
(S.I. 1997/2778 (N.I. 19)S.I. 1997/2778 (N.I. 19)) (waste on land) is in force in relation
to the land and authorises deposits in or on the land, or

(c) a licence under any provision for the time being having effect
15in Northern Ireland and corresponding to section 35 of the
Environmental Protection Act 1990 (waste management
licences) is in force in relation to the land and authorises
disposals in or on the land.”

3 After section 40 insert—

40A 20Disposals of material

(1) For the purposes of this Part, there is a disposal of material if—

(a) material is disposed of on the surface of land or on a structure
set into the surface, or

(b) material is disposed of under the surface of land.

(2) 25For the purposes of subsection (1)(a) and (b) it does not matter
whether the material is placed in a container before it is disposed of.

(3) For the purposes of subsection (1)(b) it does not matter whether the
material—

(a) is covered after it is disposed of, or

(b) 30is disposed of in a cavity (such as a cavern or mine).

(4) If material is disposed of on the surface of land or on a structure set
into the surface with a view to the material being covered, the
disposal is to be treated as made when the material is disposed of
and not when it is covered.

(5) 35An order may for the purposes of this Part provide for—

(a) material to be treated as disposed of in circumstances where
it would not otherwise be so treated;

(b) material to be treated as not disposed of in circumstances
where it would otherwise be so treated.

(6) 40An order under subsection (5) may, among other things, make
provision by reference to—

(a) descriptions of material;

(b) the quantities disposed of;

(c) the nature of the site at which material is disposed of;

(d) 45the location of material in a site (for example, whether it is in
a discrete unit within the site).

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(7) An order may for the purposes of this Part provide for a prohibited
disposal to be treated as a disposal falling within paragraph (b) of
section 40(2).

“Prohibited disposal” here means a disposal of material the disposal
5of which at a landfill site is prohibited by or by virtue of a prescribed
enactment.

(8) An order under this section may make provision subject to
exceptions, conditions or other qualifications.”

Liability to pay landfill tax

4 (1) 10Section 41 (liability to pay tax) is amended as follows.

(2) In subsection (1), after “a taxable disposal” insert “made at a landfill site”.

(3) After subsection (2) insert—

(3) A person is liable to pay tax charged on a taxable disposal not made
at a landfill site if the person—

(a) 15makes the disposal, or

(b) knowingly causes or knowingly permits the disposal to be
made.

(4) Every such person is jointly and severally liable to pay the tax
charged.

(5) 20In the case of a taxable disposal not made at a landfill site, a person
within subsection (6) or (7) is taken for the purposes of this Part to be
a person who knowingly causes or knowingly permits the disposal
to be made, unless it is shown to the satisfaction of the
Commissioners that the person did not do so.

(6) 25A person is within this subsection if, before the time of the disposal
of the material in question, the person—

(a) took any action with a view to the disposal of the material,

(b) was party to a contract for the sale of the material, or

(c) facilitated the transport or storage of the material.

(7) 30A person is within this subsection if at the time of the disposal the
person—

(a) is the owner, or a lessee or occupier, of the land at which the
disposal is made,

(b) controls, or is able to control, a vehicle or trailer from which
35the disposal is made, or

(c) is an officer of a body corporate or unincorporated
association that is within subsection (3)(a) or (3)(b).

(8) In subsection (7)(c) “officer”—

(a) in relation to a body corporate, means a director, manager,
40secretary, chief executive or member of the committee of
management, or a person purporting to act in such a capacity;

(b) in relation to an unincorporated association, means an officer
of the association or a member of its governing body, or a
person purporting to act in such a capacity.”

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Exemptions

5 In section 43 (material removed from water), in subsections (1), (3), (4) and
(5), after “A disposal” insert “made at a landfill site”.

6 In section 44 (mining and quarrying), in subsection (1), after “A disposal”
5insert “made at a landfill site”.

7 (1) Section 45 (pet cemeteries) is amended as follows.

(2) In subsection (1), after “A disposal” insert “made at a landfill site”.

(3) In subsection (2)—

(a) in paragraph (a), for “landfill disposal” substitute “disposal of
10material”;

(b) in paragraph (b), for “landfill disposals” substitute “disposals of
material”.

8 In section 46 (power to vary), in subsection (2), before paragraph (a) insert—

(za) confer exemption by reference to guidance (as it has effect
15from time to time) issued by—

(i) a body established by or under any enactment, or

(ii) a government department or an agency of a
government department,

to the effect that particular kinds of disposal do not require a
20permit or licence mentioned in section 40(4);”.

Taxable activities

9 (1) Section 69 (taxable activities) is amended as follows.

(2) For subsection (1) substitute—

(1) A person carries out a taxable activity if the person—

(a) 25makes a taxable disposal (whether or not at a landfill site),

(b) permits a taxable disposal to be made at a landfill site, or

(c) knowingly causes or knowingly permits a taxable disposal to
be made elsewhere than at a landfill site,

and the person is liable to pay tax in respect of the disposal.”

(3) 30In subsection (2)—

(a) in paragraph (a), after “is made” insert “at a landfill site”;

(b) for “this section” substitute “subsection (1)(b)”.

Taxable disposals etc: supplementary and consequential amendments

10 In section 42 (amount of tax), in subsection (2)—

(a) 35for “Where the” substitute Where—

(a) the”;

(b) for “fines this section” substitute fines, and

(b) the disposal is made at a landfill site,

this section”.

11 40In section 51 (credit: general), in subsection (1)(a), after “liable to pay tax”
insert “in respect of the disposal of material at a landfill site”.