Miscellaneous and supplementary
39 Service of notices
Any notice to be given to any person for the purposes of this Part may be given
by sending it by post in a letter addressed to that person or his representative
at the last or usual residence or place of business of that person or
40 Penalties not to be deducted for income tax or corporation tax purposes
In section 827 of the Taxes Act 1988 (no deduction for penalties etc) after
subsection (1D) insert—
“(1E) Where a person is liable to make a payment by way of a penalty under
section 25 or 26 of the Finance Act 2003 (evasion of, or contravention of
relevant rule relating to, certain taxes and duties under the
management of the Commissioners of Customs and Excise etc) the
payment shall not be allowed as a deduction in computing any income,
profits or losses for any tax purposes.”.
41 Regulations and orders
(1) Any power conferred on the Treasury by this Part to make regulations or an
order includes power—
(a) to make different provision for different cases, and
(b) to make incidental, consequential, supplemental or transitional
provision or savings.
(2) Any power conferred on the Treasury by this Part to make regulations or an
order shall be exercisable by statutory instrument.
(3) Any statutory instrument containing regulations under this Part shall be
subject to annulment in pursuance of a resolution of the House of Commons.
Stamp duty land tax
42 The tax
(1) A tax (to be known as “stamp duty land tax”) shall be charged in accordance
with this Part on land transactions.
(2) The tax is chargeable—
(a) whether or not there is any instrument effecting the transaction,
(b) if there is such an instrument, whether or not it is executed in the
United Kingdom, and
(c) whether or not any party to the transaction is present, or resident, in the
(3) The tax is under the care and management of the Commissioners of Inland
Revenue (referred to in this Part as “the Board”).
43 Land transactions
(1) In this Part a “land transaction” means any acquisition of a chargeable interest.
As to the meaning of “chargeable interest” see section 48.
(2) Except as otherwise provided, this Part applies however the acquisition is
effected, whether by act of the parties, by order of a court or other authority, by
or under any statutory provision or by operation of law.
(3) For the purposes of this Part—
(a) the creation of a chargeable interest is—
(i) an acquisition by the person becoming entitled to the interest
(ii) a disposal by the person whose interest or right is subject to the
(b) the surrender or release of a chargeable interest is—
(i) an acquisition of that interest by any person whose interest or
right is benefitted or enlarged by the transaction, and
(ii) a disposal by the person ceasing to be entitled to that interest;
(c) the variation of a chargeable interest is—
(i) an acquisition of a chargeable interest by the person benefitting
from the variation, and
(ii) a disposal of a chargeable interest by the person whose interest
is subject to or limited by the variation.
(4) References in this Part to the “purchaser” and “vendor”, in relation to a land
transaction, are to the person acquiring and the person disposing of the subject-
matter of the transaction.
These expressions apply even if there is no consideration given for the
(5) A person is not treated as a purchaser unless he has given consideration for, or
is a party to, the transaction.
(6) References in this Part to the subject-matter of a land transaction are to the
chargeable interest acquired (the “main subject-matter”), together with any
interest or right appurtenant or pertaining to it that is acquired with it.
44 Contract and conveyance
(1) This section applies where a contract for a land transaction is entered into
under which the transaction is to be completed by a conveyance.
(2) If the transaction is completed without previously having been substantially
performed, the contract and the transaction effected on completion are treated
as parts of a single land transaction.
In this case the effective date of the transaction is the date of completion.
(3) If the contract is substantially performed without having been completed, the
contract is treated as if it were itself the transaction provided for in the contract.
In this case the effective date of the transaction is when the contract is
(4) A contract is “substantially performed” when—
(a) the purchaser takes possession of the whole, or substantially the whole,
of the subject-matter of the contract, or
(b) a substantial amount of the consideration is paid or provided.
(5) For the purposes of subsection (4)(a)—
(a) a purchaser takes possession if he receives, or becomes entitled to
receive rents and profits, and
(b) it is immaterial whether the purchaser takes possession under the
contract or under a licence or lease of a temporary character.
(6) For the purposes of subsection (4)(b) a substantial amount of the consideration
is paid or provided—
(a) if none of the consideration is rent, where the whole or substantially the
whole of the consideration is paid or provided;
(b) if the only consideration is rent, when the first payment of rent is made;
(c) if the consideration includes both rent and other consideration, when—
(i) the whole or substantially the whole of the consideration other
than rent is paid or provided, or
(ii) the first payment of rent is made.
(7) Where subsection (3) applies and the contract is subsequently completed by a
(a) both the contract and the transaction effected on completion are
notifiable transactions, and
(b) tax is chargeable on the latter transaction to the extent (if any) that the
amount of tax chargeable on it is greater than the amount of tax
chargeable on the contract.
(8) Where subsection (3) applies and the contract is (to any extent) afterwards
rescinded or annulled, or is for any other reason not carried into effect, the tax
paid by virtue of that subsection shall (to that extent) be repaid by the Inland
Repayment must be claimed by amendment of the land transaction return
made in respect of the contract.
(9) In this section—
(a) references to completion are to completion of the land transaction
proposed, between the same parties, in substantial conformity with the
(b) “contract” includes any agreement and “conveyance” includes any
45 Contract and conveyance: effect of transfer of rights
(1) This section applies where—
(a) a contract for a land transaction (“the original contract”) is entered into
under which the transaction is to be completed by a conveyance, and
(b) there is an assignment, subsale or other transaction (relating to the
whole or part of the subject-matter of the original contract) as a result
of which a person other than the original purchaser becomes entitled to
call for a conveyance to him.
References in the following provisions of this section to a transfer of rights are
to any such assignment, subsale or other transaction.
(2) Where this section applies, section 44 (contract and conveyance) has effect in
accordance with the following provisions of this section.
(3) That section applies as if there were a contract for a land transaction—
(a) in relation to which the transferee is the purchaser, and
(b) under which the consideration for the transaction is—
(i) the consideration under the original contract or so much of it as
is referable to the subject-matter of the transfer of rights and
remains to be paid or provided, and
(ii) the consideration given for the transfer of rights.
This does not affect the operation of 44 in relation to the original contract,
except that the references to completion shall be read as including completion
by a conveyance to the transferee under the transfer of rights.
(4) Where there are successive transfers of rights, subsection (3) applies in relation
to each of them.
This does not affect the operation of section 44 in relation to a previous transfer
of rights, except that the references to completion shall be read as including
completion by a conveyance to the transferee under the subsequent transfer of
(5) Where a transfer of rights relates to part only of the subject-matter of the
original contract, subsection (7)(b) of section 44 (restriction of charge to tax on
subsequent conveyance) has effect as if the reference to the amount of tax
chargeable on that contract were a reference to an appropriate proportion of
(6) In this section “contract” includes any agreement and “conveyance” includes
46 Options and rights of pre-emption
(1) The acquisition of—
(a) an option binding the grantor to enter into a land transaction, or
(b) a right of pre-emption preventing the grantor from entering into, or
restricting the right of the grantor to enter into, a land transaction,
is a land transaction distinct from any land transaction resulting from the
exercise of the option or right.
They may be “linked transactions” (see section 108).
(2) The reference in subsection (1)(a) to an option binding the grantor to enter into
a land transaction includes an option requiring the grantor either to enter into
a land transaction or to discharge his obligations under the option in some
(3) The effective date of the transaction in the case of the acquisition of an option
or right such as is mentioned in subsection (1) is when the option or right is
acquired (as opposed to when it becomes exercisable).
(4) Nothing in this section applies to so much of an option or right of pre-emption
as constitutes or forms part of a land transaction apart from this section.