Stamp duty land tax: determination of penalties and related appeals
Determination of penalties and appeals
1 The provisions of this Schedule apply in relation to penalties under this Part
of this Act.
Determination of penalty by officer of the Board
2 (1) An officer of the Board authorised for the purposes of this paragraph may
make a determination—
(a) imposing the penalty, and
(b) setting it at such amount as in the officer’s opinion is correct or
(2) Notice of the determination must be served on the person liable to the
(3) The notice must also state—
(a) the date on which the notice is issued, and
(b) the time within which an appeal against the determination may be
(4) A penalty determined under this paragraph is due and payable at the end of
the period of 30 days beginning with the date of issue of the notice of
(5) Where an officer of the Board has decided to impose a penalty, and has taken
all other decisions needed for arriving at the amount of the penalty, he may
entrust to any other officer of the Board responsibility for completing the
determination procedure, whether by means involving the use of a
computer or otherwise, including responsibility for serving notice of the
Alteration of penalty determination
3 (1) After notice has been served of the determination of a penalty, the
determination cannot be altered except in accordance with this paragraph or
(2) If it is discovered by an authorised officer that the amount of the penalty is
or has become insufficient, the officer may make a determination in a further
amount so that the penalty is set at the amount which in the officer’s opinion
is correct or appropriate.
(3) If in the case of a tax-related penalty it is discovered by an authorised officer
that the amount taken into account as the amount of tax is or has become
excessive, he may revise the determination so that the penalty is set at the
amount that is correct.
Where more than the correct amount has already been paid the appropriate
amount shall be repaid.
(4) In this paragraph an “authorised officer” means an officer of the Board
authorised by the Board for the purposes of this paragraph.
Liability of personal representatives
4 If a person liable to a penalty has died—
(a) any determination that could have been made in relation to that
person may be made in relation to his personal representatives, and
(b) any penalty imposed on them is a debt due from and payable out of
the person’s estate.
Appeal against penalty determination
5 (1) An appeal lies to the General or Special Commissioners against the
determination of a penalty.
(2) Notice of appeal must be given in writing to the officer of the Board by
whom the determination was made within 30 days of the date of issue of the
notice of determination.
(3) An appeal may be brought out of time with the consent of the Board or the
(4) On an application to them for such consent, the Board—
(a) shall give their consent if they are satisfied that there was a
reasonable excuse for not bringing the appeal within the time limit,
(b) if they are not so satisfied, shall refer the matter for determination by
(5) The notice of appeal must specify the grounds of appeal, but on the hearing
of the appeal the Commissioners may allow the appellant to put forward a
ground not specified in the notice of appeal, and take it into consideration,
if satisfied that the omission was not deliberate or unreasonable.
(6) On an appeal under this paragraph the Commissioners may—
(a) if it appears to them that no penalty has been incurred, set the
(b) if the amount determined appears to them to be appropriate, confirm
(c) if the amount determined appears to them to be excessive, reduce it
to such other amount (including nil) as appears to them to be
(d) if the amount determined appears to them to be insufficient, increase
it to such amount, not exceeding the permitted maximum, as they
6 (1) Section 56A of the Taxes Management Act 1970 (general right of appeal on
point of law) applies in relation to a decision of the Commissioners under
(2) Without prejudice to that right of appeal, an appeal lies against the amount
of a penalty determined by the Commissioners on an appeal under
paragraph 5, at the instance of the person liable to the penalty—
(a) to the High Court, or
(b) in Scotland, to the Court of Session sitting as the Court of Exchequer.
(3) On an appeal under sub-paragraph (2) the court has the same powers as are
conferred on the Commissioners by paragraph 5(6) above.
Penalty proceedings before the court
7 (1) Where in the opinion of the Board the liability of a person for a penalty arises
by reason of his fraud, or the fraud of another person, proceedings for the
penalty may be brought—
(a) in the High Court, or
(b) in Scotland, in the Court of Session sitting as the Court of Exchequer.
(2) Proceedings under this paragraph in England and Wales shall be brought—
(a) by and in the name of the Board as an authorised department for the
purposes of the Crown Proceedings Act 1947 (c. 44), or
(b) in the name of the Attorney General.
Any such proceedings shall be deemed to be civil proceedings by the Crown
within the meaning of Part 2 of the Crown Proceedings Act 1947.
(3) Proceedings under this paragraph in Scotland shall be brought in the name
of the Advocate General for Scotland.
(4) Proceedings under this paragraph in Northern Ireland shall be brought—
(a) by and in the name of the Board as an authorised department for the
purposes of the Crown Proceedings Act 1947 as for the time being in
force in Northern Ireland, or
(b) in the name of the Advocate General for Northern Ireland.
Any such proceedings shall be deemed to be civil proceedings within the
meaning of Part 2 of the Crown Proceedings Act 1947 as for the time being
in force in Northern Ireland.
(5) If in proceedings under this paragraph the court does not find that fraud is
proved but considers that the person concerned is nevertheless liable to a
penalty, the court may determine a penalty notwithstanding that, but for the
opinion of the Board as to fraud, the penalty would not have been a matter
for the court.
(6) Paragraph 2 (determination of penalty by officer of the Board) does not
apply where proceedings are brought under this paragraph.
(7) In relation to any time before the coming into force of section 2(1) of the
Justice (Northern Ireland) Act 2002 (c. 26), the reference in sub-paragraph
(4)(b) to the Advocate General for Northern Ireland shall be read as a
reference to the Attorney General for Northern Ireland.
Time limit for determination of penalties
8 (1) The following time limits apply in relation to the determination of penalties
under this Schedule.
(2) The general rule is that—
(a) no penalty may be determined under paragraph 2 (determination by
officer of Board), and
(b) no proceedings for a penalty may be brought under paragraph 7
(penalty proceedings before the court),
more than six years after the date on which the penalty was incurred or, in
the case of a daily penalty, began to be incurred.
This rule is subject to the following provisions of this paragraph,
(3) Where the amount of a penalty is to be ascertained by reference to the tax
chargeable in respect of a transaction, a penalty may be determined under
paragraph 2, or proceedings for a penalty may be begun under paragraph 7,
at any time within three years after the final determination of the amount of
tax by reference to which the amount of the penalty is to be determined.
(4) Sub-paragraph (3) does not apply where a person has died and the
determination would be made in relation to his personal representatives if
the tax was charged in an assessment made more than six years after the
effective date of the transaction to which it relates.
(5) A penalty under section 96 (penalty for assisting in preparation of incorrect
return) may be determined by an officer of the Board, or proceedings for
such a penalty may be commenced before a court, at any time within 20
years after the date on which the penalty was incurred.
Stamp duty land tax: partnerships
1 In this Part of this Act a “partnership” means—
(a) a partnership within the Partnership Act 1890 (c. 39),
(b) a limited partnership registered under the Limited Partnerships Act
1907 (c. 24), or
(c) a limited liability partnership formed under the Limited Liability
Partnerships Act 2000 (c. 12) or the Limited Liability Partnerships
Act (Northern Ireland) 2002 (c. 12 (N. I.)),
or a firm or entity of a similar character to any of those mentioned above
formed under the law of a country or territory outside the United Kingdom.
Legal personality of partnership disregarded
2 (1) For the purposes of this Part of this Act—
(a) a chargeable interest held by or on behalf of a partnership is treated
as held by or on behalf of the partners, and
(b) a land transaction entered into for the purposes of a partnership is
treated as entered into by or on behalf of the partners,
and not by or on behalf of the partnership as such.
(2) Sub-paragraph (1) applies notwithstanding that the partnership is regarded
as a legal person, or as a body corporate, under the law of the country or
territory under which it is formed.
Continuity of partnership
3 For the purposes of this Part of this Act a partnership is treated as the same
partnership notwithstanding a change in membership if any person who
was a member before the change remains a member after the change.
Partnership not to be regarded as unit trust scheme etc
4 A partnership is not to be regarded for the purposes of this Part of this Act
as a unit trust scheme or an open ended investment company.
Ordinary partnership transactions
5 (1) This Part of this Schedule applies to transactions entered into as purchaser
by or on behalf of the members of a partnership, other than transactions
within Part 3 of this Schedule (transactions excluded from stamp duty land
Responsibility of partners
6 (1) Anything required or authorised to be done under this Part of this Act by or
in relation to the purchaser under the transaction is required or authorised
to be done by or in relation to all the responsible partners.
(2) The responsible partners in relation to a transaction are—
(a) the persons who are partners at the effective date of the transaction,
(b) any person who becomes a member of the partnership after the
effective date of the transaction.
(3) This paragraph has effect subject to paragraph 8 (representative partners).
Joint and several liability of responsible partners
7 (1) Where the responsible partners are liable—
(a) to make a payment of tax or to interest on unpaid tax,
(b) to make a payment in accordance with an assessment under
paragraph 29 of Schedule 10 (recovery of excessive repayment), or
(c) to a penalty under this Part of this Act or to interest on such a
the liability is a joint and several liability of those partners.
(2) No amount may be recovered by virtue of sub-paragraph (1)(c) from a
person who did not become a responsible partner until after the relevant
(3) The relevant time for this purpose is—
(a) in relation to so much of a penalty as is payable in respect of any day,
or to interest on so much of a penalty as is so payable, the beginning
of that day;
(b) in relation to any other penalty, or interest on such a penalty, the time
when the act or omission occurred that caused the penalty to become
8 (1) Anything required or authorised to be done by or in relation to the
responsible partners may instead be done by or in relation to any
representative partner or partners.
(2) This includes making the declaration required by paragraph 1(1)(c) of
Schedule 10 or paragraph 2(1)(c) of Schedule 11 (declaration that return or
self-certificate is complete and correct).
(3) A representative partner means a partner nominated by a majority of the
partners to act as the representative of the partnership for the purposes of
this Part of this Act.
(4) Any such nomination, or the revocation of such a nomination, has effect only
after notice of the nomination, or revocation, has been given to the Inland
Transactions excluded from stamp duty land tax
9 (1) This Part of this Schedule excludes from stamp duty land tax—
(a) the transfer of an interest in land into a partnership (paragraph 10),
(b) the acquisition of an interest in a partnership (paragraph 11), or
(c) the transfer of an interest in land out of a partnership (paragraph 12).
(2) In this Part of this Schedule—
(a) references to an interest in land include any interest or right that
would be a chargeable interest but for being excluded from stamp
duty land tax, and
(b) references to the transfer of an interest in land include—
(i) the grant or creation of an interest in land,
(ii) the variation of an interest in land, and
(iii) the surrender or release of an interest in land.
Transfer of interest in land into a partnership
10 (1) This paragraph applies to a transaction by which—
(a) a partner transfers an interest in land to a partnership, or
(b) a person transfers an interest in land to a partnership in return for an
interest in the partnership
whether in connection with the formation of the partnership or in a case
where the partnership already exists.
(2) There is a transfer of an interest in land to a partnership in any case where
an interest in land that was not partnership property becomes partnership
(3) A transaction to which this paragraph applies is excluded from stamp duty
Acquisition of partnership interest
11 An acquisition of an interest in a partnership is excluded from stamp duty
Transfer of interest in land out of a partnership
12 (1) This paragraph applies to a transaction by which an interest in land is
transferred from a partnership to a person in consideration of his ceasing to
be a member of the partnership or reducing his interest in the partnership.
(2) There is a transfer of an interest in land from a partnership in any case where
an interest in land that was partnership property ceases to be partnership
(3) For the purposes of this paragraph property that was partnership property
before the partnership was dissolved or otherwise ceased to exist shall be
treated as remaining partnership property until it is distributed.
(4) A transaction to which this paragraph applies is excluded from stamp duty
Effect of exclusion of transaction from stamp duty land tax
13 (1) A transaction that is excluded from stamp duty land tax by this Part of this
Schedule shall be treated for the purposes of this Part of this Act as if it were
not a land transaction.
(2) Nothing in section 125 (abolition of stamp duty except in relation to stock or
marketable securities), or in Part 2 of Schedule 20 (amendments and repeals
consequential on that section), affects the application of the enactments
relating to stamp duty in relation to an instrument effecting a transaction
that is excluded from stamp duty land tax by this Part of this Schedule.
(3) In Part 1 of Schedule 20 (provisions supplementing that section) references
to stock or marketable securities shall be read as including any property that
is the subject-matter of a transaction excluded from stamp duty land tax by
this Part of this Schedule.
Construction of references to partnership property
14 Any reference in this Part of this Schedule to partnership property is to an
interest or right held by or on behalf of a partnership, or the members of a
partnership, for the purposes of the partnership business.
Stamp duty land tax: trusts and powers
Meaning of “settlement” and “bare trust”
1 (1) In this Part “settlement” means a trust that is not a bare trust.