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Finance Bill
Schedule 8 — Stamp duty land tax: charities relief

    180

 

              (a)             for use in furtherance of the charitable purposes of the purchaser or

of another charity, or

              (b)             as an investment from which the profits are applied to the charitable

purposes of the purchaser.

          (3)      The second condition is that the transaction must not have not been entered

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into for the purpose of avoiding tax under this Part (whether by the

purchaser or any other person).

          (4)      In this section a “charity” means a body of persons or a trust established for

charitable purposes only.

Withdrawal of charities relief

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  2       (1)      Where in the case of a transaction (“the relevant transaction”) that is exempt

by virtue of paragraph 1 (charities relief)—

              (a)             a disqualifying event occurs—

                    (i)                   before the end of the period of three years beginning with the

effective date of the transaction, or

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                    (ii)                  in pursuance of, or in connection with, arrangements made

before the end of that period,

                              and

              (b)             at the time of the disqualifying event the purchaser holds a

chargeable interest—

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                    (i)                   that was acquired by the purchaser under the relevant

transaction, or

                    (ii)                  that is derived from an interest so acquired,

                   charities relief in relation to the relevant transaction, or an appropriate

proportion of it, is withdrawn and tax is chargeable in accordance with this

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section.

          (2)      The amount chargeable is the amount that would have been chargeable in

respect of the relevant transaction but for charities relief or, as the case may

be, an appropriate proportion of the tax that would have been so chargeable.

          (3)      For the purposes of this paragraph a “disqualifying event” means—

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              (a)             the purchaser ceasing to be established for charitable purposes only,

or

              (b)             the subject-matter of the transaction, or any interest or right derived

from it, being used or held by the purchaser otherwise than for

qualifying charitable purposes.

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          (4)      In sub-paragraphs (1) and (2) an “appropriate proportion” means an

appropriate proportion having regard to—

              (a)             what was acquired by the purchaser under the relevant transaction

and what is held by the purchaser at the time of the disqualifying

event, and

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              (b)             the extent to which what is held by the purchaser at that time

becomes used or held for purposes other than qualifying charitable

purposes.

          (5)      In this paragraph “qualifying charitable purposes” has the same meaning as

in paragraph 1.

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Finance Bill
Schedule 9 — Stamp duty land tax: right to buy, shared ownership leases etc

    181

 

Schedule 9

Section 70

 

Stamp duty land tax: right to buy, shared ownership leases etc

Right to buy transactions

  1       (1)      In the case of a right to buy transaction—

              (a)             section 51(1) (contingent consideration to be included in chargeable

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consideration on assumption that contingency will occur) does not

apply, and

              (b)             any consideration that would be payable only if a contingency were

to occur, or that is payable only because a contingency has occurred,

does not count as chargeable consideration.

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          (2)      A “right to buy transaction” means—

              (a)             the sale of a dwelling at a discount, or the grant of a lease of a

dwelling at a discount, by a relevant public sector body, or

              (b)             the sale of a dwelling, or the grant of a lease of a dwelling, in

pursuance of the preserved right to buy.

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          (3)      The following are relevant public sector bodies for the purposes of sub-

paragraph (2)(a):

Government

                   A Minister of the Crown

                   The Scottish Ministers

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                   A Northern Ireland department

Local Government

                   A county council

                   A council constituted under section 2 of the Local Government etc.

(Scotland) Act 1994 (c. 39), the common good of such a council or any trust

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under its control

                   A district council within the meaning of the Local Government Act

(Northern Ireland) 1972 (c. 9 (N.I.))

                   The Council of the Isles of Scilly

                   A local housing authority within the meaning of the Housing Act 1985 (c. 68)

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Social housing

                   The Housing Corporation

                   Scottish Homes

                   The Northern Ireland Housing Executive

                   A registered social landlord

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                   A housing action trust established under Part 3 of the Housing Act 1988

(c. 50)

New towns and development corporations

                   The Commission for the New Towns

                   A development corporation established by an order made, or having effect

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as if made, under the New Towns Act 1981 (c. 64)

                   A development corporation established by an order made, or having effect

as if made, under the New Towns (Scotland) Act 1968 (c. 16)

 

 

Finance Bill
Schedule 9 — Stamp duty land tax: right to buy, shared ownership leases etc

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                   A new town commission established under section 7 of the New Towns Act

(Northern Ireland) 1965 (c. 13 (N.I.))

                   An urban development corporation established by an order made under

section 135 of the Local Government, Planning and Land Act 1980 (c. 65)

Police

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                   A police authority within the meaning of section 101(1) of the Police Act 1996

(c. 16)

                   A police authority within the meaning of section 2(1) or 19(9)(b) of the Police

(Scotland) Act 1967 (c. 77)

                   The Northern Ireland Policing Board

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Miscellaneous

                   An Education and Libraries Board within the meaning of the Education and

Libraries (Northern Ireland) Order 1986 (S.I.1986/594 (N.I. 3))

                   The United Kingdom Atomic Energy Authority

                   Any person mentioned in paragraphs (g), (k), (l) or (n) of section 61(11) of

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the Housing (Scotland) Act 1987 (c. 26)

                   A body prescribed for the purposes of this subsection by Treasury order.

          (4)      For the purposes of sub-paragraph (2)(b) the transfer of a dwelling, or the

grant of a lease of a dwelling, is made in pursuance of the preserved right to

buy if—

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              (a)             the vendor is—

                    (i)                   in England and Wales, a person against whom the right to

buy under Part 5 of the Housing Act 1985 (c. 68) is exercisable

by virtue of section 171A of that Act, or

                    (ii)                  in Scotland, a person against whom the right to buy under

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section 61 of the Housing (Scotland) Act 1987 is exercisable

by virtue of section 81A of that Act,

                              (which provide for the preservation of the right to buy on disposal to

a private sector landlord),

              (b)             the purchaser is the qualifying person for the purposes of the

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preserved right to buy, and

              (c)             the dwelling is the qualifying dwelling-house in relation to the

purchaser.

          (5)      A grant under section 20 or 21 of the Housing Act 1996 (c. 52) (purchase

grants in respect of disposals at a discount by registered social landlords)

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does not count as part of the chargeable consideration for a right to buy

transaction in relation to which the vendor is a registered social landlord.

Shared ownership lease: election for market value treatment

  2       (1)      This section applies where—

              (a)             a lease is granted—

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                    (i)                   by a qualifying body, or

                    (ii)                  in pursuance of the preserved right to buy,

              (b)             the conditions in sub-paragraph (2) are met, and

              (c)             the purchaser elects for tax to be charged in accordance with this

paragraph.

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          (2)      The conditions are as follows—

 

 

Finance Bill
Schedule 9 — Stamp duty land tax: right to buy, shared ownership leases etc

    183

 

              (a)             the lease must be of a dwelling;

              (b)             the lease must give the lessee or lessees exclusive use of the dwelling;

              (c)             the lease must provide for the lessee or lessees to acquire the

reversion;

              (d)             the lease must be granted partly in consideration of rent and partly

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in consideration of a premium calculated by reference to—

                    (i)                   the market value of the dwelling, or

                    (ii)                  a sum calculated by reference to that value;

              (e)             the lease must contain a statement of—

                    (i)                   the market value of the dwelling, or

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                    (ii)                  the sum calculated by reference to that value,

                              by reference to which the premium is calculated.

          (3)      An election for tax to be charged in accordance with this paragraph must be

included in the land transaction return made in respect of the grant of the

lease, or in an amendment of that return, and is irrevocable, so that the

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return may not be amended so as to withdraw the election.

          (4)      Where this paragraph applies the chargeable consideration for the grant of

the lease shall be taken to be the amount stated in the lease in accordance

with sub-paragraph (2)(e)(i) or (ii).

                   As to the tax treatment of the acquisition of the reversion in pursuance of the

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lease, see paragraph 3.

          (5)      Section 118 (meaning of “market value”) does not apply in relation to the

reference in sub-paragraph (2)(e) above to the market value of the dwelling.

Transfer of reversion under shared ownership lease where election made for market value

treatment

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  3        The transfer of the reversion to the lessee or lessees under the terms of a lease

to which paragraph 2 applies (shared ownership lease: election for market

value treatment) is exempt from charge if—

              (a)             an election was made for tax to be charged in accordance with that

paragraph, and

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              (b)             any tax chargeable in respect of the grant of the lease has been paid.

Shared ownership lease: election where staircasing allowed

  4       (1)      This paragraph applies where—

              (a)             a lease is granted by a qualifying body or in pursuance of the

preserved right to buy,

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              (b)             the conditions in sub-paragraph (2) below are met, and

              (c)             the purchaser elects for tax to be charged in accordance with this

paragraph.

          (2)      The conditions are as follows—

              (a)             the lease must be of a dwelling;

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              (b)             the lease must give the lessee or lessees exclusive use of the dwelling;

              (c)             the lease must provide that the lessee or lessees may, on the payment

of a sum, require the terms of the lease to be altered so that the rent

payable under it is reduced;

 

 

Finance Bill
Schedule 9 — Stamp duty land tax: right to buy, shared ownership leases etc

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              (d)             the lease must be granted partly in consideration of rent and partly

in consideration of a premium calculated by reference to—

                    (i)                   the premium obtainable on the open market for the grant of

a lease containing the same terms as the lease but with the

substitution of the minimum rent for the rent payable under

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the lease, or

                    (ii)                  a sum calculated by reference to that premium;

              (e)             the lease must contain a statement of the minimum rent and of—

                    (i)                   the premium obtainable on the open market, or

                    (ii)                  the sum calculated by reference to that premium,

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                              by reference to which the premium is calculated.

          (3)      An election for tax to be charged in accordance with this paragraph must be

included in the land transaction return made in respect of the grant of the

lease, or in an amendment of that return, and is irrevocable, so that the

return may not be amended so as to withdraw the election.

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          (4)      Where this paragraph applies—

              (a)             the rent in consideration of which the lease is granted shall be taken

to be the minimum rent stated in the lease in accordance with sub-

paragraph (2)(e), and

              (b)             the chargeable consideration for the grant other than rent shall be

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taken to be the amount stated in the lease in accordance with sub-

paragraph (2)(e)(i) or (ii).

          (5)      In this paragraph the “minimum rent” means the lowest rent which could

become payable under the lease if it were altered as mentioned in sub-

paragraph (2)(c) at the date when the lease is granted.

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Shared ownership leases: meaning of “qualifying body” and “preserved right to buy”

  5       (1)      This paragraph has effect for the purposes of paragraphs 2 and 4 (shared

ownership leases: election as to basis of taxation).

          (2)      A “qualifying body” means—

              (a)             a local housing authority within the meaning of the Housing Act

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1985 (c. 68);

              (b)             a housing association within the meaning of—

                    (i)                   the Housing Associations Act 1985 (c. 69), or

                    (ii)                  Part 2 of the Housing (Northern Ireland) Order 1992 (S.I.

1992/1725 (N.I. 15));

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              (c)             a housing action trust established under Part 3 of the Housing Act

1988 (c. 50);

              (d)             the Northern Ireland Housing Executive;

              (e)             the Commission for the New Towns;

              (f)             a development corporation established by an order made, or having

40

effect as if made, under the New Towns Act 1981 (c. 64).

          (3)      A lease is granted “in pursuance of the preserved right to buy” if—

              (a)             the vendor is a person against whom the right to buy under Part 5 of

the Housing Act 1985 is exercisable by virtue of section 171A of that

Act (preservation of right to buy on disposal to private sector

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landlord),

 

 

Finance Bill
Schedule 10 — Stamp duty land tax: returns, enquiries, assessments and appeals
Part 1 — Land transaction returns

    185

 

              (b)             the lessee is, or lessees are, the qualifying person for the purposes of

the preserved right to buy, and

              (c)             the lease is of a dwelling that is the qualifying dwelling-house in

relation to the purchaser.

Rent to mortgage or rent to loan: chargeable consideration

5

  6       (1)      The chargeable consideration for a rent to mortgage or rent to loan

transaction is determined in accordance with this paragraph.

          (2)      A “rent to mortgage transaction” means—

              (a)             the transfer of a dwelling to a person, or

              (b)             the grant of a lease of a dwelling to a person,

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                   pursuant to the exercise by that person of the right to acquire on rent to

mortgage terms under Part 5 of the Housing Act 1985 (c. 68).

          (3)      The chargeable consideration for such a transaction is equal to the price that,

by virtue of section 126 of the Housing Act 1985, would be payable for—

              (a)             a transfer of the dwelling to the person (where the rent to mortgage

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transaction is a transfer), or

              (b)             the grant of a lease of the dwelling to the person (where the rent to

mortgage transaction is the grant of a lease),

                   if the person were exercising the right to buy under Part 5 of that Act.

          (4)      A “rent to loan transaction” means the execution of a heritable disposition in

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favour of a person pursuant to the exercise by that person of the right to

purchase a house by way of the rent to loan scheme in Part 3 of the Housing

(Scotland) Act 1987 (c. 26).

          (5)      The chargeable consideration for such a transaction is equal to the price that,

by virtue of section 62 of the Housing (Scotland) Act 1987, would be payable

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for the house if the person were exercising the right to purchase under

section 61 of that Act.

Schedule 10

Section 78

 

Stamp duty land tax: returns, enquiries, assessments and appeals

Part 1

30

Land transaction returns

Contents of return

  1       (1)      A land transaction return must—

              (a)             be in the prescribed form,

              (b)             contain the prescribed information, and

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              (c)             include a declaration by the purchaser (or each of them) that the

return is to the best of his knowledge correct and complete.

          (2)      In sub-paragraph (1) “prescribed” means prescribed by regulations made by

the Inland Revenue.

          (3)      The regulations may make different provision for different kinds of return.

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Finance Bill
Schedule 10 — Stamp duty land tax: returns, enquiries, assessments and appeals
Part 1 — Land transaction returns

    186

 

          (4)      Regulations under sub-paragraph (1)(b) may require the provision of

information corresponding to any of the particulars formerly required

under—

              (a)             Schedule 2 to the Finance Act 1931 (c. 28) (requirement to deliver

particulars of land transactions in Great Britain), or

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              (b)             section 244 of the Finance Act 1994 (c. 9) (corresponding provision

for Northern Ireland).

          (5)      The return is treated as containing any information provided by the

purchaser for the purpose of completing the return.

Meaning of filing date and delivery of return

10

  2       (1)      References in this Part of this Act to the filing date, in relation to a land

transaction return, are to the last day of the period within which the return

must be delivered.

          (2)      References in this Part of this Act to the delivery of a land transaction return

are to the delivery of a return that—

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              (a)             complies with the requirements of paragraph 1(1) (contents of

return), and

              (b)             is accompanied by payment of any tax required to accompany the

return.

Failure to deliver return: flat-rate penalty

20

  3       (1)      A person who is required to deliver a land transaction return and fails to do

so by the filing date is liable to a flat-rate penalty under this paragraph.

                   He may also be liable to a tax-related penalty under paragraph 4.

          (2)      The penalty is—

              (a)             £100 if the return is delivered within three months after the filing

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date, and

              (b)             £200 in any other case.

Failure to deliver return: tax-related penalty

  4       (1)      A purchaser who is required to deliver a land transaction return in respect

of a chargeable transaction and fails to do so within twelve months after the

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filing date is liable to a tax-related penalty under this paragraph.

                   This is in addition to any flat-rate penalty under paragraph 3.

          (2)      The penalty is an amount not exceeding the amount of tax chargeable in

respect of the transaction.

Formal notice to deliver return: daily penalty

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  5       (1)      If it appears to the Inland Revenue—

              (a)             that a purchaser required to deliver a land transaction return in

respect of a chargeable transaction has failed to do so, and

              (b)             that the filing date has now passed,

                   they may issue a notice requiring him to deliver a land transaction return in

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respect of the transaction.

          (2)      The notice must specify—

 

 

 
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