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  PART IV
  OTHER TAXES
 
Stamp duty and stamp duty reserve tax
Stamp duty: exemption for land in disadvantaged areas.     92. - (1) No stamp duty shall be chargeable under Part I or II, or paragraph 16 of Part III, of Schedule 13 to the Finance Act 1999 on-
 
 
    (a) a conveyance or transfer of an estate or interest in land, or
 
    (b) a lease of land,
       if the land is situated in a disadvantaged area.
 
      (2) Where stamp duty would be chargeable on an instrument but for subsection (1), that subsection shall have effect in relation to the instrument only if the instrument is certified to the Commissioners as being an instrument on which stamp duty is by virtue of that subsection not chargeable.
 
      (3) No instrument which is certified as mentioned in subsection (2) shall be taken to be duly stamped unless-
 
 
    (a) it is stamped in accordance with section 12 of the Stamp Act 1891 with a particular stamp denoting that it is not chargeable with any duty or that it is duly stamped, or
 
    (b) it is stamped with the duty to which it would have been liable but for this section.
      (4) For the purposes of this section and Schedule 30 to this Act, a disadvantaged area is an area designated as such by regulations made by the Treasury; and any such regulations may-
 
 
    (a) designate specified areas as disadvantaged areas, or
 
    (b) provide for areas of a description specified in the regulations to be designated as disadvantaged areas.
      (5) If regulations under subsection (4) so provide, the designation of an area as a disadvantaged area shall have effect for such period as may be specified by or determined in accordance with the regulations.
 
      (6) Schedule 30 to this Act (which makes further provision about land in disadvantaged areas) shall have effect.
 
      (7) This section and Schedule 30 to this Act shall be construed as one with the Stamp Act 1891.
 
      (8) The provisions of this section and Schedule 30 to this Act shall have effect in relation to instruments executed on or after such date as may be specified by order made by the Treasury.
 
      (9) Regulations under subsection (4)-
 
 
    (a) may make different provision for different cases, and
 
    (b) may contain such incidental, supplementary, consequential or transitional provision as appears to the Treasury to be necessary or expedient.
      (10) The power to make regulations under subsection (4) shall be exercisable by statutory instrument subject to annulment in pursuance of a resolution of the House of Commons.
 
      (11) The power to make an order under subsection (8) shall be exercisable by statutory instrument.
 
SDRT: unit trust schemes and individual pension accounts.     93. - (1) Schedule 19 to the Finance Act 1999 (which abolishes charges to stamp duty, and introduces a charge to stamp duty reserve tax, in relation to units under a unit trust scheme) is amended as follows.
 
      (2) In paragraph 2(4) (charge to be subject to exclusions provided in paragraphs 6 and 7) after "6" insert ", 6A".
 
      (3) In paragraph 4 (proportionate reduction of tax by reference to units issued) at the end insert-
 
 
    "(6) If a certificate is given in accordance with paragraph 6A(1)(c) in respect of a period which includes the relevant two-week period in the case of the unit in question in sub-paragraph (1), there shall be left out of account in applying this paragraph in relation to that unit-
 
 
    (a) any issue of a unit which is to be held within an individual pension account, and
 
    (b) any surrender of a unit which, immediately before the surrender, was held within an individual pension account.
      (7) "Individual pension account" has the same meaning in sub-paragraph (6) as it has in paragraph 6A.".
 
      (4) After paragraph 6 insert-
 
 

"Exclusion of charge in case of individual pension accounts
 6A. - (1) There is no charge to tax under this Part of this Schedule on the surrender of the unit if-
 
 
    (a) immediately before the surrender, the unit is held within an individual pension account,
 
    (b) not all the units under the unit trust scheme are so held at that time, and
 
    (c) a certificate pursuant to sub-paragraph (2) is contained in, or provided with, the relevant monthly tax return.
      (2) The certificate must be given by the persons making the relevant monthly tax return and must state-
 
 
    (a) that at all times in the period to which the return relates the trustees or managers were able to identify which of the units under the scheme were held within individual pension accounts, and
 
    (b) that at no time in that period have the trustees or managers imposed any charge on, or recovered any amount from, an IPA unit holder which included an amount directly or indirectly attributable to tax payable by the trustees under this Part of this Schedule.
      (3) In sub-paragraph (2), "IPA unit holder" means-
 
 
    (a) a person acquiring, or who has acquired, a unit under the unit trust scheme, where the unit is to be held within an individual pension account,
 
    (b) a person holding a unit under the scheme, where the unit is held within an individual pension account, or
 
    (c) a person surrendering, or who has surrendered, a unit under the scheme, where immediately before the surrender the unit is or was held within an individual pension account.
      (4) In this paragraph-
 
 
    "individual pension account" has the same meaning as in regulations under section 638A of the Taxes Act 1988 (as at 6th April 2001, see regulation 4 of the Personal Pension Schemes (Restriction on Discretion to Approve) (Permitted Investments) Regulations 2001);
 
    "the relevant monthly tax return", in the case of any surrender, means the notice required by regulations under section 98 of the Finance Act 1986 to be given by the managers (or, failing that, the trustees) under the unit trust scheme to the Commissioners of Inland Revenue containing among other things details of all surrenders in the relevant two-week period;
 
    "the relevant two-week period" has the meaning given by paragraph 4(2).".
      (5) The amendment made by subsection (3) has effect where the relevant two-week period mentioned in paragraph 4(1) of Schedule 19 to the Finance Act 1999 ends after 6th April 2001.
 
      (6) The other amendments made by this section have effect in relation to surrenders made or effected on or after 6th April 2001.
 
SDRT: open-ended investment companies and individual pension accounts.     94. - (1) Where there are two or more classes of shares in an open-ended investment company and the company's instrument of incorporation-
 
 
    (a) provides that shares of one or more of those classes ("the IPA classes") may only be held within an individual pension account, and
 
    (b) does not make such provision in relation to shares of at least one other class,
       there is no charge to stamp duty reserve tax under Part II of Schedule 19 to the Finance Act 1999 on the surrender of a share of any of the IPA classes.
 
      (2) References in this section to provisions of Schedule 19 to the Finance Act 1999 are references to those provisions as they have effect in relation to open-ended investment companies by virtue of regulations from time to time in force under section 152 of the Finance Act 1995 (as at 6th April 2001, see regulations 3 to 4B of the 1997 Regulations as amended by regulations 4 and 5 of the 1999 (No.2) Regulations).
 
      (3) In this section-
 
 
    "individual pension account" has the same meaning as it has in regulations from time to time in force under section 638A of the Taxes Act 1988 (as at 6th April 2001, see regulation 4 of the 2001 Regulations);
 
    "open-ended investment company" has the meaning given by paragraph 14(2) of Schedule 19 to the Finance Act 1999;
 
    "surrender", in relation to a share in an open-ended investment company, has the same meaning as it has in Part II of Schedule 19 to the Finance Act 1999.
      (4) For the purposes of subsections (2) and (3)-
 
 
    "the 1997 Regulations" are the Stamp Duty and Stamp Duty Reserve Tax (Open-ended Investment Companies) Regulations 1997;
 
    "the 1999 (No.2) Regulations" are the Stamp Duty and Stamp Duty Reserve Tax (Open-ended Investment Companies) (Amendment No.2) Regulations 1999;
 
    "the 2001 Regulations" are the Personal Pension Schemes (Restriction on Discretion to Approve) (Permitted Investments) Regulations 2001.
      (5) This section has effect in relation to surrenders made or effected on or after 6th April 2001.
 
Exemptions in relation to employee share ownership plans.     95. - (1) Schedule 8 to the Finance Act 2000 (employee share ownership plans) is amended as follows.
 
      (2) After paragraph 116 insert-
 
 

"Exemptions from stamp duty and stamp duty reserve tax
 116A. Where, under an approved employee share ownership plan, partnership shares or dividend shares are transferred by the trustees to an employee-
 
 
    (a) no ad valorem stamp duty is chargeable on any instrument by which the transfer is made, and
 
    (b) no stamp duty reserve tax is chargeable on any agreement by the trustees to make the transfer.".
      (3) This section has effect in relation to-
 
 
    (a) instruments executed (within the meaning of the Stamp Act 1891) after the day on which this Act is passed, and
 
    (b) agreements to transfer shares made after the day on which this Act is passed.
 
Value added tax
VAT: children's car seats.     96. - (1) In paragraph 1 of Schedule A1 to the Value Added Tax Act 1994 (supplies benefiting from 5% reduced rate), after sub-paragraph (4) insert-
 
 
    "(5) The supplies falling within this paragraph also include supplies of children's car seats.".
 
      (2) After paragraph 6 of that Schedule insert-
 
 

"Interpretation of paragraph 1(5)
 7. - (1) Paragraph 1(5) above is interpreted in accordance with the provisions of this paragraph.
 
      (2) The following are "children's car seats"-
 
 
    (a) a safety seat;
 
    (b) the combination of a safety seat and a related wheeled framework;
 
    (c) a booster seat;
 
    (d) a booster cushion.
      (3) In this paragraph "safety seat" means a seat-
 
 
    (a) designed to be sat in by a child in a road vehicle,
 
    (b) designed so that, when in use in a road vehicle, it can be restrained-
 
      (i) by a seat belt fitted in the vehicle, or
 
      (ii) by belts, or anchorages, that form part of the seat being attached to the vehicle, or
 
      (iii) in either of those ways, and
 
    (c) incorporating an integral harness, or integral impact shield, for restraining a child seated in it.
      (4) For the purposes of this paragraph, a wheeled framework is "related" to a safety seat if the framework and the seat are each designed so that-
 
 
    (a) when the seat is not in use in a road vehicle it can be attached to the framework, and
 
    (b) when the seat is so attached, the combination of the seat and the framework can be used as a child's pushchair.
      (5) In this paragraph "booster seat" means a seat designed-
 
 
    (a) to be sat in by a child in a road vehicle, and
 
    (b) so that, when in use in a road vehicle, it and a child seated in it can be restrained by a seat belt fitted in the vehicle.
      (6) In this paragraph "booster cushion" means a cushion designed-
 
 
    (a) to be sat on by a child in a road vehicle, and
 
    (b) so that a child seated on it can be restrained by a seat belt fitted in the vehicle.
      (7) In this paragraph "child" means a person aged under 14 years.".
 
      (3) The amendments made by this section have effect in relation to supplies made after the day on which this Act is passed.
 
VAT: residential conversions and renovations.     97. - (1) In paragraph 1 of Schedule A1 to the Value Added Tax Act 1994 (supplies benefiting from 5% reduced rate), after sub-paragraph (5) (which is inserted by section 96 of this Act) insert-
 
 
    "(6) The supplies falling within this paragraph also include-
 
 
    (a) the supply, in the course of a qualifying conversion, of qualifying services related to the conversion;
 
    (b) the supply of building materials if-
 
      (i) the materials are supplied by a person who, in the course of a qualifying conversion, is supplying qualifying services related to the conversion, and
 
      (ii) those services include the incorporation of the materials in the building concerned or its immediate site.
      (7) The supplies falling within this paragraph also include-
 
 
    (a) the supply, in the course of the renovation or alteration of a single household dwelling, of qualifying services related to the renovation or alteration;
 
    (b) the supply of building materials if-
 
      (i) the materials are supplied by a person who, in the course of the renovation or alteration of a single household dwelling, is supplying qualifying services related to the renovation or alteration, and
 
      (ii) those services include the incorporation of the materials in the dwelling concerned or its immediate site.
      (8) Sub-paragraph (9) below applies where a supply of services is only in part a supply to which sub-paragraph (6)(a) or (7)(a) above applies.
 
      (9) The supply, to the extent that it is one to which paragraph (a) of sub-paragraph (6) or (7) above applies, is to be taken to be a supply to which that paragraph applies; and an apportionment may be made to determine that extent.".
 
      (2) After paragraph 7 of that Schedule (which also is inserted by section 96 of this Act) insert-
 
 

"Interpretation of paragraph 1(6): introductory
 8. - (1) Paragraph 1(6) above is interpreted in accordance with paragraphs 9 to 17 and 22 below.
 
      (2) In paragraphs 10 to 14 below, "single household dwelling" means a dwelling-
 
 
    (a) that is designed for occupation by a single household, and
 
    (b) in relation to which the conditions set out in sub-paragraph (4) below are satisfied.
      (3) In paragraphs 10 to 14 below "multiple occupancy dwelling" means a dwelling-
 
 
    (a) that is designed for occupation by persons not forming a single household, and
 
    (b) in relation to which the conditions set out in sub-paragraph (4) below are satisfied.
      (4) The conditions are-
 
 
    (a) that the dwelling consists of self-contained living accommodation,
 
    (b) that there is no provision for direct internal access from the dwelling to any other dwelling or part of a dwelling,
 
    (c) that the separate use of the dwelling is not prohibited by the terms of any covenant, statutory planning consent or similar provision, and
 
    (d) that the separate disposal of the dwelling is not prohibited by any such terms.
      (5) For the purposes of this paragraph, a dwelling "is designed" for occupation of a particular kind if it is so designed-
 
 
    (a) as a result of having been originally constructed for occupation of that kind and not having been subsequently adapted for occupation of any other kind, or
 
    (b) as a result of adaptation.
 
Interpretation of paragraph 1(6): meaning of "qualifying conversion"
 9. - (1) A "qualifying conversion" means-
 
 
    (a) a changed number of dwellings conversion (see paragraph 10 below);
 
    (b) a house in multiple occupation conversion (see paragraph 11 below); or
 
    (c) a special residential conversion (see paragraph 12 below).
      (2) Sub-paragraph (1) above is subject to paragraphs 14 and 15 below.
 
 
Interpretation of paragraph 1(6): meaning of "changed number of dwellings conversion"
 10. - (1) A "changed number of dwellings conversion" is-
 
 
    (a) a conversion of premises consisting of a building where the conditions specified in this paragraph are satisfied, or
 
    (b) a conversion of premises consisting of a part of a building where those conditions are satisfied.
      (2) The first condition is that after the conversion the premises being converted contain a number of single household dwellings that is-
 
 
    (a) different from the number (if any) that the premises contain before the conversion, and
 
    (b) greater than, or equal to, one.
      (3) The second condition is that there is no part of the premises being converted that is a part that after the conversion contains the same number of single household dwellings (whether zero, one or two or more) as before the conversion.
 
 
Interpretation of paragraph 1(6): meaning of "house in multiple occupation conversion"
 11. - (1) A "house in multiple occupation conversion" is-
 
 
    (a) a conversion of premises consisting of a building where the condition specified in sub-paragraph (2) below is satisfied, or
 
    (b) a conversion of premises consisting of a part of a building where that condition is satisfied.
      (2) The condition is that-
 
 
    (a) before the conversion the premises being converted contain only a single household dwelling or two or more such dwellings,
 
    (b) after the conversion those premises contain only a multiple occupancy dwelling or two or more such dwellings, and
 
    (c) the use to which those premises are intended to be put after the conversion is not to any extent use for a qualifying residential purpose (see paragraph 17 below).
 
Interpretation of paragraph 1(6): meaning of "special residential conversion"
 12. - (1) A "special residential conversion" is a conversion of premises consisting of-
 
 
    (a) a building or two or more buildings,
 
    (b) a part of a building or two or more parts of buildings, or
 
    (c) a combination of-
 
      (i) a building or two or more buildings, and
 
      (ii) a part of a building or two or more parts of buildings,
 
    where the conditions specified in this paragraph are satisfied.
      (2) The first condition is that, before the conversion, the premises being converted contain only-
 
 
    (a) a dwelling or two or more dwellings, or
 
    (b) a dwelling, or two or more dwellings, and-
 
      (i) an ancillary outbuilding occupied together with the dwelling or one or more of the dwellings, or
 
      (ii) two or more ancillary outbuildings each occupied together with the dwelling or one or more of the dwellings.
      (3) In sub-paragraph (2) above "dwelling" means single household dwelling or multiple occupancy dwelling.
 
      (4) The second condition is that where before the conversion the premises being converted contain a multiple occupancy dwelling or two or more such dwellings, the use to which that dwelling, or any of those dwellings, was last put before the conversion was not to any extent use for a qualifying residential purpose (see paragraph 17 below).
 
      (5) The third condition is that the premises being converted must be intended to be used after the conversion solely for a qualifying residential purpose.
 
      (6) The fourth condition is that, where the qualifying residential purpose is an institutional purpose, the premises being converted must be intended to form after the conversion the entirety of an institution used for that purpose.
 
      (7) In sub-paragraph (6) above "institutional purpose" means a purpose within paragraph 17(a) to (c), (f) or (g) below.
 
 
Special residential conversions: reduced rate only for supplies made to intended user of converted accommodation
 13. - (1) This paragraph applies where the qualifying conversion concerned is a special residential conversion.
 
      (2) Paragraph 1(6)(a) or (b) above does not apply to a supply unless-
 
 
    (a) it is made to a person who intends to use the premises being converted for the qualifying residential purpose, and
 
    (b) before it is made, the person to whom it is made has given to the person making it a certificate that satisfies the requirements in sub-paragraph (3) below.
      (3) Those requirements are that the certificate-
 
 
    (a) is in such form as may be specified in a notice published by the Commissioners, and
 
    (b) states that the conversion is a special residential conversion.
      (4) In sub-paragraph (2)(a) above "the qualifying residential purpose" means the purpose within paragraph 17 below for which the premises being converted are intended to be used after the conversion.
 
 
Interpretation of paragraph 1(6): "qualifying conversion" includes related garage works
 14. - (1) A qualifying conversion includes any garage works related to the-
 
 
    (a) changed number of dwellings conversion,
 
    (b) house in multiple occupation conversion, or
 
    (c) special residential conversion,
       concerned.
 
      (2) In this paragraph "garage works" means-
 
 
    (a) the construction of a garage, or
 
    (b) a conversion of a non-residential building, or of a non-residential part of a building, that results in a garage.
      (3) For the purposes of sub-paragraph (1) above, garage works are "related" to a conversion if-
 
 
    (a) they are carried out at the same time as the conversion, and
 
    (b) the resulting garage is intended to be occupied with-
 
      (i) where the conversion concerned is a changed number of dwellings conversion, a single household dwelling that will after the conversion be contained in the building, or part of a building, being converted,
 
      (ii) where the conversion concerned is a house in multiple occupation conversion, a multiple occupancy dwelling that will after the conversion be contained in the building, or part of a building, being converted, or
 
      (iii) where the conversion concerned is a special residential conversion, the institution or other accommodation resulting from the conversion.
      (4) In sub-paragraph (2) above "non-residential" means neither designed, nor adapted, for use-
 
 
    (a) as a dwelling or two or more dwellings, or
 
    (b) for a qualifying residential purpose (see paragraph 17 below).
 
Interpretation of paragraph 1(6): conversion not "qualifying" if planning consent and building control approval not obtained
 15. - (1) A conversion is not a qualifying conversion if any statutory planning consent needed for the conversion has not been granted.
 
      (2) A conversion is not a qualifying conversion if any statutory building control approval needed for the conversion has not been granted.
 
 
Interpretation of paragraph 1(6): meaning of "supply of qualifying services"
 16. - (1) In the case of a conversion of a building, "supply of qualifying services" means a supply of services that consists in-
 
 
    (a) the carrying out of works to the fabric of the building, or
 
    (b) the carrying out of works within the immediate site of the building that are in connection with-
 
      (i) the means of providing water, power, heat or access to the building,
 
      (ii) the means of providing drainage or security for the building, or
 
      (iii) the provision of means of waste disposal for the building.
      (2) In the case of a conversion of part of a building, "supply of qualifying services" means a supply of services that consists in-
 
 
    (a) the carrying out of works to the fabric of the part, or
 
    (b) the carrying out of works to the fabric of the building, or within the immediate site of the building, that are in connection with-
 
      (i) the means of providing water, power, heat or access to the part,
 
      (ii) the means of providing drainage or security for the part, or
 
      (iii) the provision of means of waste disposal for the part.
      (3) In this paragraph-
 
 
    (a) references to the carrying out of works to the fabric of a building do not include the incorporation, or installation as fittings, in the building of any goods that are not building materials (see paragraph 22 below);
 
    (b) references to the carrying out of works to the fabric of a part of a building do not include the incorporation, or installation as fittings, in the part of any goods that are not building materials.
 
Interpretation of paragraphs 11 to 14: meaning of "qualifying residential purpose"
      17. For the purposes of paragraphs 11 to 14 above, "use for a qualifying residential purpose" means use as-
 
 
    (a) a home or other institution providing residential accommodation for children,
 
    (b) a home or other institution providing residential accommodation with personal care for persons in need of personal care by reason of old age, disablement, past or present dependence on alcohol or drugs or past or present mental disorder,
 
    (c) a hospice,
 
    (d) residential accommodation for students or school pupils,
 
    (e) residential accommodation for members of any of the armed forces,
 
    (f) a monastery, nunnery or similar establishment, or
 
    (g) an institution which is the sole or main residence of at least 90 per cent. of its residents,
       except use as a hospital, prison or similar institution or an hotel, inn or similar establishment.
 
 
Interpretation of paragraph 1(7): introductory
 18. - (1) Paragraph 1(7) above is interpreted in accordance with this paragraph and paragraphs 19 to 22 below.
 
      (2) For the purposes of paragraph 1(7) above (and paragraphs 19 to 21 below)-
 
 
    "alteration" includes extension;
 
    "single household dwelling" has the meaning given by paragraph 8(2), (4) and (5) above.
 
Paragraph 1(7) only applies where dwelling has been empty for at least 3 years
 19. - (1) Paragraph 1(7) above does not apply to a supply unless either of the empty home conditions is satisfied.
 
      (2) The first "empty home condition" is that the dwelling concerned has not been lived in during the period of 3 years ending with the commencement of the relevant works.
 
      (3) The second "empty home condition" is that-
 
 
    (a) the dwelling was not lived in during a period of at least 3 years;
 
    (b) the person, or one of the persons, whose beginning to live in the dwelling brought that period to an end was a person who (whether alone or jointly with another or others) acquired the dwelling at a time-
 
      (i) no later than the end of that period, and
 
      (ii) when the dwelling had been not lived in for at least 3 years;
 
    (c) no works by way of renovation or alteration were carried out to the dwelling during the period of 3 years ending with the acquisition;
 
    (d) the supply is made to a person who is-
 
      (i) the person, or one of the persons, whose beginning to live in the property brought to an end the period mentioned in paragraph (a) above, and
 
      (ii) the person, or one of the persons, who acquired the dwelling as mentioned in paragraph (b) above; and
 
    (e) the relevant works are carried out during the period of one year beginning with the day of the acquisition.
      (4) In this paragraph "the relevant works" means-
 
 
    (a) where the supply is of the description set out in paragraph 1(7)(a) above, the works that constitute the services supplied;
 
    (b) where the supply is of the description set out in paragraph 1(7)(b) above, the works by which the materials concerned are incorporated in the dwelling concerned or its immediate site.
      (5) In sub-paragraph (3) above, references to a person acquiring a dwelling are to that person having a major interest in the dwelling granted, or assigned, to him for a consideration.
 
 
Paragraph 1(7) only applies if planning consent and building control approval obtained
 20. - (1) Paragraph 1(7) above does not apply to a supply unless any statutory planning consent needed for the renovation or alteration has been granted.
 
      (2) Paragraph 1(7) above does not apply to a supply unless any statutory building control approval needed for the renovation or alteration has been granted.
 
 
Interpretation of paragraph 1(7): meaning of "supply of qualifying services"
 21. - (1) "Supply of qualifying services" means a supply of services that consists in-
 
 
    (a) the carrying out of works to the fabric of the dwelling, or
 
    (b) the carrying out of works within the immediate site of the dwelling that are in connection with-
 
      (i) the means of providing water, power, heat or access to the dwelling,
 
      (ii) the means of providing drainage or security for the dwelling, or
 
      (iii) the provision of means of waste disposal for the dwelling.
      (2) In sub-paragraph (1)(a) above, the reference to the carrying out of works to the fabric of the dwelling does not include the incorporation, or installation as fittings, in the dwelling of any goods that are not building materials (see paragraph 22 below).
 
 
Interpretation of paragraph 1(6) and (7): meaning of "building materials"
 22. "Building materials" has the meaning given by Notes (22) and (23) of Group 5 to Schedule 8 (zero-rating of construction and conversion of buildings).".
 
      (3) The amendments made by this section have effect in relation to supplies made after the day on which this Act is passed.
 
 
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