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| Grant of lease to connected company. |
119. - (1) This section applies where a lease is granted to a company ("A") and-
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(a) the person granting the lease ("B") is connected with A; or |
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(b) some or all of the consideration for the grant of the lease consists of the issue or transfer of shares in a company with which B is connected. |
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(2) Subsection (3) has effect for the purposes of stamp duty chargeable under Part II of Schedule 13 to the Finance Act 1999 (stamp duty on a lease) by reference to Part I of that Schedule (conveyance or transfer on sale).
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(3) If, apart from this subsection, the amount or value of the consideration for the grant would be less than the value determined under subsection (4), the consideration shall be taken to be the value determined under subsection (4).
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(4) That value is-
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(a) the market value, immediately before the instrument granting the lease is executed, of the lease granted; but |
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(b) reduced by the value of so much of any actual consideration as does not consist of property. |
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(5) This section applies only if, in consequence of its application, the lease is chargeable with a greater amount of stamp duty than it would be apart from this section.
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(6) For the purposes of this section, the market value of property at any time is the price which that property might reasonably be expected to fetch on a sale at that time in the open market.
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(7) In this section-
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"company" means any body corporate; |
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"shares" includes stock and the reference to shares in a company includes a reference to securities issued by a company. |
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(8) For the purposes of this section, the question whether any person is connected with another shall be determined in accordance with the provisions of section 839 of the Taxes Act 1988.
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(9) This section shall be construed as one with the Stamp Act 1891.
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(10) This section applies to instruments executed on or after 28th March 2000.
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(11) But this section does not apply to an instrument giving effect to a contract made on or before 21st March 2000, unless-
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(a) the instrument is made in consequence of the exercise after that date of any option, right of pre-emption or similar right; or |
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(b) the instrument transfers the property in question to, or vests it in, a person other than the purchaser under the contract, because of an assignment (or, in Scotland, assignation) or further contract made after that date. |
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(12) This section shall be deemed to have come into force on 28th March 2000.
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| Marketable securities transferred etc for exempt property. |
120. - (1) Subsection (2) applies where-
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(a) an instrument transferring marketable securities would not, apart from this section, be or fall to be treated as a transfer on sale for the purposes of stamp duty; but |
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(b) the transfer of the marketable securities is for consideration; and |
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(c) the consideration is or includes any qualifying property ("the other property"). |
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(2) For the purposes of Part I of Schedule 13 to the Finance Act 1999 (stamp duty on conveyance or transfer on sale) the instrument transferring the marketable securities shall be taken to be a transfer on sale of those securities.
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(3) If the amount or value of the consideration for that transfer on sale would (apart from this subsection) exceed the market value of the marketable securities immediately before the execution of the instrument transferring them, the amount or value of the consideration shall be taken to be equal to that market value.
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For this purpose the market value of property at any time is the price which that property might reasonably be expected to fetch on a sale at that time in the open market.
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(4) Subsection (2) has effect even though-
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(a) the transfer of the marketable securities is the whole or part of the consideration for a sale of the other property; or |
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(b) the transaction is by way of exchange. |
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(5) Subsection (2) does not affect any charge to stamp duty in respect of the same or any other instrument so far as it relates to the transfer of the other property.
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(6) In this section "qualifying property" means any debt due, stock or securities, to the extent that the debt, stock or securities are not chargeable securities, within the meaning of Part IV of the Finance Act 1986 (stamp duty reserve tax).
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(7) This section shall be construed as one with the Stamp Act 1891.
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(8) This section applies to instruments executed on or after 28th March 2000.
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(9) But this section does not apply to an instrument giving effect to a contract made on or before 21st March 2000, unless-
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(a) the instrument is made in consequence of the exercise after that date of any option, right of pre-emption or similar right; or |
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(b) the instrument transfers the property in question to, or vests it in, a person other than the purchaser under the contract, because of an assignment (or, in Scotland, assignation) or further contract made after that date. |
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(10) This section shall be deemed to have come into force on 28th March 2000.
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| Transfer of property between associated companies: Great Britain. |
121. - (1) Amend section 42 of the Finance Act 1930 as follows.
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(2) In subsection (2B) (body to be parent of another if beneficial owner of 75% of ordinary share capital) after "if at that time the first body" insert "(a)" and at the end of the subsection add-
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"(b) is beneficially entitled to not less than 75 per cent of any profits available for distribution to equity holders of the second body; and |
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(c) would be beneficially entitled to not less than 75 per cent of any assets of the second body available for distribution to its equity holders on a winding-up; |
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but this subsection is subject to subsection (2C).".
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(3) After subsection (2B) insert-
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"(2C) A body corporate shall not be regarded for the purposes of this section as the parent of another body corporate at a particular time if at that time any person has or could obtain, or any persons together have or could obtain, control of one of the bodies but not of the other.".
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(4) In subsection (3)-
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(a) after "The ownership referred to in" insert "paragraph (a) of"; and |
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(b) for "this section" substitute "that paragraph". |
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(5) At the end of the section add-
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"(5) Schedule 18 to the Income and Corporation Taxes Act 1988 shall apply for the purposes of paragraphs (b) and (c) of subsection (2B) as it applies for the purposes of paragraphs (a) and (b) of section 413(7) of that Act.
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(6) In subsection (2C), "control" shall be construed in accordance with section 840 of the Income and Corporation Taxes Act 1988.".
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(6) This section has effect in relation to instruments executed on or after the day on which this Act is passed.
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| Transfer of property between associated companies: Northern Ireland. |
122. - (1) Amend section 11 of the Finance Act (Northern Ireland) 1954 as follows.
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(2) In subsection (3AA) (body to be parent of another if beneficial owner of 75% of ordinary share capital) after "if at that time the first body" insert "(a)" and at the end of the subsection add-
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"(b) is beneficially entitled to not less than 75 per cent of any profits available for distribution to equity holders of the second body; and |
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(c) would be beneficially entitled to not less than 75 per cent of any assets of the second body available for distribution to its equity holders on a winding-up; |
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but this subsection is subject to subsection (3AAA).".
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(3) After subsection (3AA) insert-
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"(3AAA) A body corporate shall not be regarded for the purposes of this section as the parent of another body corporate at a particular time if at that time any person has or could obtain, or any persons together have or could obtain, control of one of the bodies but not of the other.".
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(4) In subsection (3A)-
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(a) after "The ownership referred to in" insert "paragraph (a) of"; and |
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(b) for "this section" substitute "that paragraph". |
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(5) At the end of the section add-
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"(6) Schedule 18 to the Income and Corporation Taxes Act 1988 shall apply for the purposes of paragraphs (b) and (c) of subsection (3AA) as it applies for the purposes of paragraphs (a) and (b) of section 413(7) of that Act.
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(7) In subsection (3AAA), "control" shall be construed in accordance with section 840 of the Income and Corporation Taxes Act 1988.".
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(6) This section has effect in relation to instruments executed on or after the day on which this Act is passed.
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| Grant of leases etc between associated companies. |
123. - (1) Amend section 151 of the Finance Act 1995 as follows.
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(2) In subsection (8) (body to be parent of another if beneficial owner of 75% of ordinary share capital) after "if at that time the first body" insert "(a)" and at the end of the subsection add-
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"(b) is beneficially entitled to not less than 75 per cent of any profits available for distribution to equity holders of the second body; and |
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(c) would be beneficially entitled to not less than 75 per cent of any assets of the second body available for distribution to its equity holders on a winding-up; |
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but this subsection is subject to subsection (8A)."
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(3) After subsection (8) insert-
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"(8A) A body corporate shall not be regarded for the purposes of this section as the parent of another body corporate at a particular time if at that time any person has or could obtain, or any persons together have or could obtain, control of one of the bodies but not of the other."
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(4) In subsection (10)-
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(a) after "The ownership referred to in" insert "paragraph (a) of"; and |
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(b) for "this section" substitute "that paragraph". |
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(5) After subsection (10) insert-
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"(10A) Schedule 18 to the Income and Corporation Taxes Act 1988 shall apply for the purposes of paragraphs (b) and (c) of subsection (8) as it applies for the purposes of paragraphs (a) and (b) of section 413(7) of that Act.
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(10B) In subsection (8A), "control" shall be construed in accordance with section 840 of the Income and Corporation Taxes Act 1988."
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(6) This section has effect in relation to instruments executed on or after the day on which this Act is passed.
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| Future issues of stock. |
124. - (1) Amend section 55 of the Stamp Act 1891 (calculation of ad valorem duty in respect of stock and securities) as follows.
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(2) After subsection (1) insert-
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"(1A) For the purposes of subsection (1), it is immaterial-
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(a) whether, at the time of the execution of the conveyance on sale, the stock or marketable security is or has been issued or is to be issued; and |
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(b) in a case where the stock or marketable security is to be issued, when it is to be, or is, issued and whether the issue is certain or contingent." |
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(3) This section has effect in relation to instruments executed on or after the day on which this Act is passed.
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| Company acquisition reliefs: redeemable shares. |
125. - (1) Amend section 75 of the Finance Act 1986 (acquisitions: reliefs) in accordance with subsections (2) and (3).
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(2) In subsection (4), in paragraph (a) (which requires that the consideration for the acquisition consists of or includes the issue of shares) after "the issue of" insert "non-redeemable".
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(3) In subsection (4), after paragraph (b) add-
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" In paragraph (a) above, "non-redeemable shares" means shares which are not redeemable shares."
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(4) In section 76 of the Finance Act 1986 (acquisitions: further provisions about reliefs) in subsection (3)(a) (which requires that the consideration for the acquisition consists of or includes the issue of shares) for "shares" substitute "non-redeemable shares (within the meaning of section 75(4)(a) above)".
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(5) This section has effect in relation to instruments executed on or after the day on which this Act is passed.
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