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Finance Bill
Part 4 — Stamp duty land tax

    33

 

 47    Exchanges

     (1)    Where a land transaction is entered into by the purchaser (alone or jointly)

wholly or partly in consideration of another land transaction being entered

into by him (alone or jointly) as vendor, this Part applies in relation to each

transaction as if each were distinct and separate from the other.

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     (2)    A transaction is treated for the purposes of this Part as entered into by the

purchaser wholly or partly in consideration of another land transaction being

entered into by him as vendor in any case where an obligation to give

consideration for a land transaction that a person enters into as purchaser is

met wholly or partly by way of that person entering into another transaction as

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vendor.

     (3)    As to the amount of the chargeable consideration in the case of exchanges and

similar transactions, see—

                    paragraphs 5 and 6 of Schedule 4 (exchanges, partition etc), and

                    section 58 (part-exchange of residential property).

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Chargeable interests, chargeable transactions and chargeable consideration

 48    Chargeable interests

     (1)    In this Part “chargeable interest” means—

           (a)           an estate, interest, right or power in or over land in the United

Kingdom, or

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           (b)           the benefit of an obligation, restriction or condition affecting the value

of any such estate, interest, right or power,

            other than an exempt interest.

     (2)    The following are exempt interests—

           (a)           any security interest;

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           (b)           a licence to use or occupy land;

           (c)           in England and Wales or Northern Ireland—

                  (i)                 a tenancy at will;

                  (ii)                an advowson, franchise or manor.

     (3)    In subsection (2)—

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           (a)           “security interest” means an interest or right (other than a rentcharge)

held for the purpose of securing the payment of money or the

performance of any other obligation; and

           (b)           “franchise” means a grant from the Crown such as the right to hold a

market or fair, or the right to take tolls.

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     (4)    In the application of this Part in Scotland the reference in subsection (3)(a) to a

rentcharge shall be read as a reference to a feu duty or a payment mentioned

in section 56(1) of the Abolition of Feudal Tenure etc. (Scotland) Act 2000

(asp 5).

     (5)    The Treasury may by regulations provide that any other description of interest

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or right in relation to land in the United Kingdom is an exempt interest.

     (6)    The regulations may contain such supplementary, incidental and transitional

provision as appears to the Treasury to be appropriate.

 

 

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 49    Chargeable transactions

     (1)    A land transaction is a chargeable transaction if it is not a transaction that is

exempt from charge.

     (2)    Schedule 3 provides for certain transactions to be exempt from charge.

            Other transactions are exempt from charge under other provisions of this Part.

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 50    Chargeable consideration

     (1)    Schedule 4 makes provision as to the chargeable consideration for a

transaction.

     (2)    The Treasury may by regulations amend or repeal the provisions of this Part

relating to chargeable consideration and make such other provision as appears

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to them appropriate with respect to—

           (a)           what is to count as chargeable consideration, or

           (b)           the determination of the amount of chargeable consideration.

     (3)    The regulations may make different provision in relation to different

descriptions of transaction or consideration and different circumstances.

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 51    Contingent, uncertain or unascertained consideration

     (1)    Where the whole or part of the chargeable consideration for a transaction is

contingent, the amount or value of the consideration shall be determined for

the purposes of this Part on the assumption that the outcome of the

contingency will be such that the consideration is payable or, as the case may

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be, does not cease to be payable.

     (2)    Where the whole or part of the chargeable consideration for a transaction is

uncertain or unascertained, its amount or value shall be determined for the

purposes of this Part on the basis of a reasonable estimate.

     (3)    In this Part—

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                    “contingent”, in relation to consideration, means—

                  (a)                 that it is to be paid or provided only if some uncertain future

event occurs, or

                  (b)                 that it is to cease to be paid or provided if some uncertain future

event occurs; and

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                    “uncertain”, in relation to consideration, means that its amount or value

depends on uncertain future events.

     (4)    This section has effect subject to—

                    section 80 (adjustment where contingency ceases or consideration is

ascertained), and

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                    section 90 (application to defer payment in case of contingent or uncertain

consideration).

 52    Annuities etc: chargeable consideration limited to twelve years’ payments

     (1)    This section applies to so much of the chargeable consideration for a land

transaction as consists of an annuity payable—

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           (a)           for life, or

           (b)           in perpetuity, or

 

 

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Part 4 — Stamp duty land tax

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           (c)           for an indefinite period, or

           (d)           for a definite period exceeding twelve years.

     (2)    For the purposes of this Part the consideration to be taken into account is

limited to twelve years’ annual payments.

     (3)    Where the amount payable varies, or may vary, from year to year, the twelve

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highest annual payments shall be taken.

            No account shall be taken for the purposes of this Schedule of any provision for

adjustment of the amount payable in line with the retail price index.

     (4)    References in this section to annual payments are to payments in respect of

each successive period of twelve months beginning with the effective date of

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the transaction.

     (5)    For the purposes of this section the amount or value of any payment shall be

determined (if necessary) in accordance with section 51 (contingent, uncertain

or unascertained consideration).

     (6)    References in this section to an annuity include any consideration (other than

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rent) that falls to be paid or provided periodically.

            References to payment shall be read accordingly.

     (7)    Where this section applies—

           (a)           section 80 (adjustment where contingency ceases or consideration is

ascertained) does not apply, and

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           (b)           no application may be made under section 90 (application to defer

payment in case of contingent or uncertain consideration).

 53    Deemed market value where transaction involves connected company

     (1)    Where the purchaser is a company and—

           (a)           the vendor is connected with the purchaser, or

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           (b)           some or all of the consideration for the transaction consists of the issue

or transfer of shares in a company with which the vendor is connected,

            the chargeable consideration for the transaction shall be taken to be not less

than the market value of the subject matter of the transaction as at the effective

date of the transaction.

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     (2)    Section 839 of the Taxes Act 1988 (connected persons) has effect for the

purposes of this section.

     (3)    In this section—

                    “company” means any body corporate;

                    “shares” includes stock and the reference to shares in a company includes

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a reference to securities issued by a company.

     (4)    Where this section applies paragraph 1 of Schedule 3 (exemption of

transactions for which there is no chargeable consideration) does not apply.

            But this section has effect subject to any other provision affording exemption

or relief from stamp duty land tax.

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     (5)    This section is subject to the exceptions provided for in section 54.

 

 

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 54    Exceptions from deemed market value rule

     (1)    Section 53 (chargeable consideration: transaction with connected company)

does not apply in the following cases.

            In the following provisions “the company” means the company that is the

purchaser in relation to the transaction in question.

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     (2)    Case 1 is where immediately after the transaction the company holds the

property as trustee in the course of a business carried on by it that consists of

or includes the management of trusts.

     (3)    Case 2 is where—

           (a)           immediately after the transaction the company holds the property as

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trustee, and

           (b)           the vendor is connected with the company only because of section

839(3) of the Taxes Act 1988.

     (4)    Case 3 is where—

           (a)           the vendor is a company and the transaction is, or is part of, a

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distribution of the assets of that company (whether or not in connection

with its winding up), and

           (b)           it is not the case that—

                  (i)                 the subject-matter of the transaction, or

                  (ii)                an interest from which that interest is derived,

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                         has, within the period of three years immediately preceding the

effective date of the transaction, been the subject of a transaction in

respect of which group relief was claimed by the vendor.

Amount of tax chargeable

 55    Amount of tax chargeable: general

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     (1)    The amount of tax chargeable in respect of a chargeable transaction is a

percentage of the chargeable consideration for the transaction.

     (2)    That percentage is determined by reference to whether the relevant land—

           (a)           consists entirely of residential property (in which case Table A below

applies), or

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           (b)           consists of or includes land that is not residential property (in which

case Table B below applies),

            and, in either case, by reference to the amount of the relevant consideration.

 

Table A: Residential

 
 

Relevant consideration

Percentage

 

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Not more than £60,000

0%

 
 

More than £60,000 but not more

1%

 
 

than £250,000

  
 

More than £250,000 but not

3%

 
 

more than £500,000

  

40

 

More than £500,000

4%

 
 

 

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Table B: Non-residential or mixed

 
 

Relevant consideration

Percentage

 
 

Not more than £150,000

0%

 
 

More than £150,000 but not

1%

 
 

more than £250,000

  

5

 

More than £250,000 but not

3%

 
 

more than £500,000

  
 

More than £500,000

4%

 

     (3)    For the purposes of subsection (2)—

           (a)           the relevant land is the land an interest in which is the main subject-

10

matter of the transaction, and

           (b)           the relevant consideration is the chargeable consideration for the

transaction,

            subject as follows.

     (4)    If the transaction in question is one of a number of linked transactions—

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           (a)           the relevant land is any land an interest in which is the main subject-

matter of any of those transactions, and

           (b)           the relevant consideration is the total of the chargeable consideration

for all those transactions.

     (5)    This section has effect subject to—

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                    section 74 (collective enfranchisement by leaseholders), and

                    section 75 (crofting community right to buy),

            (which provide for the rate of tax to be determined by reference to a fraction of

the relevant consideration).

     (6)    In the case of a transaction for which the whole or part of the chargeable

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consideration is rent this section has effect subject to section 56 and Schedule 5

(amount of tax chargeable: rent).

     (7)    References in this Part to the “rate of tax” are to the percentage determined

under this section.

 56    Amount of tax chargeable: rent

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Schedule 5 provides for the calculation of the tax chargeable where the

chargeable consideration for a transaction consists of or includes rent.

Reliefs

 57    Disadvantaged areas relief

     (1)    Schedule 6 provides for relief in the case of transactions relating to land in a

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disadvantaged area.

     (2)    In that Schedule—

                    Part 1 defines “disadvantaged area”,

 

 

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                    Part 2 relates to transactions where the land to which the transaction

relates is wholly situated in a disadvantaged area,

                    Part 3 relates to transactions where the land to which the transaction

relates is partly situated in a disadvantaged area, and

                    Part 4 contains supplementary provisions.

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 58    Part-exchange of residential property

     (1)    Where a dwelling (“the old dwelling”) is acquired from an individual (whether

alone or with other individuals) by a house-building company or a company

connected with a house-building company, the chargeable consideration for

the acquisition is taken to be nil if—

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           (a)           the individual (whether alone or with other individuals) acquires from

the house-building company a new dwelling that has a market value in

excess of the market value of the old dwelling,

           (b)           the individual—

                  (i)                 occupied the old dwelling as his only or main residence

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immediately before its acquisition, and

                  (ii)                intends to occupy the new dwelling as his only or main

residence,

           (c)           each acquisition is entered into in consideration of the other,

           (d)           other consideration is also given for the acquisition of the new

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dwelling, and

           (e)           the area of land acquired by the house-building company or the

connected company does not exceed the permitted area.

     (2)    Where the conditions in subsection (1)(a) to (d) are met but the area of land

acquired by the house-building company or the connected company exceeds

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the permitted area, the chargeable consideration for the acquisition is taken to

be the amount calculated by deducting the market value of the permitted area

from the market value of the old dwelling.

     (3)    “Dwelling” includes land occupied and enjoyed with the dwelling as its garden

or grounds.

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     (4)    A building or part of a building is a “new dwelling” if—

           (a)           it has been constructed for use as a single dwelling and has not

previously been occupied, or

           (b)           it has been adapted for use as a single dwelling and has not been

occupied since its adaptation.

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     (5)    A “house-building company” means a company that carries on the business of

constructing or adapting buildings or parts of buildings for use as dwellings.

            Section 839 of the Taxes Act 1988 (connected persons) applies for the purpose

of determining whether a company is connected with a house-building

company.

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     (6)    The “permitted area”, in relation to a dwelling, means land occupied and

enjoyed with the dwelling as its garden or grounds that does not exceed—

           (a)           an area (inclusive of the site of the dwelling) of 0.5 of a hectare, or

           (b)           such larger area as is required for the reasonable enjoyment of the

dwelling as a dwelling having regard to its size and character.

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     (7)    Where subsection (6)(b) applies, the permitted area is taken to consist of that

part of the old dwelling that would be the most suitable for occupation and

 

 

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enjoyment with the dwelling as its garden or grounds if the rest of the land

were separately occupied.

     (8)    In this section—

           (a)           references to the acquisition of the new dwelling are to the acquisition,

by way of grant or transfer, of a major interest in the dwelling;

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           (b)           references to the acquisition of the old dwelling are to the acquisition,

by way of transfer, of a major interest in the dwelling;

           (c)           references to the market value of a dwelling, or of an area of land, are

to the market value of the major interest in the dwelling, or of that

interest so far as it relates to the area in question.

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 59    Relocation relief

     (1)    Where a dwelling is acquired from an employee (whether alone or with other

individuals) by the employer or a relocation company, the acquisition is

exempt from charge if—

           (a)           the individual occupied the dwelling as his only or main residence at

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some time in the period of one year ending with the date of the

acquisition,

           (b)           the acquisition is made in connection with a change of residence by the

individual resulting from relocation of employment,

           (c)           the consideration for the acquisition does not exceed the market value

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of the dwelling, and

           (d)           the area of land acquired does not exceed the permitted area.

     (2)    Where the conditions in subsection (1)(a) to (c) are met but the area of land

acquired exceeds the permitted area, the chargeable consideration for the

acquisition is taken to be the amount calculated by deducting the market value

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of the permitted area from the market value of the dwelling.

     (3)    “Relocation of employment” means a change of the individual’s place of

employment due to—

           (a)           his becoming an employee of the employer,

           (b)           an alteration of the duties of his employment with the employer, or

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           (c)           an alteration of the place where he normally performs those duties.

     (4)    A change of residence is one “resulting from” relocation of employment if—

           (a)           the change is made wholly or mainly to allow the individual to have his

residence within a reasonable daily travelling distance of his new place

of employment, and

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           (b)           the individual’s former residence is not within a reasonable daily

travelling distance of that place.

            The employee’s “new place of employment” means the place where he

normally performs, or is normally to perform, the duties of his employment

after the relocation.

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     (5)    “Relocation company” means—

           (a)           a company carrying on a business consisting of or including provision

of the service of acquiring dwellings in connection with a change of

residence resulting from relocation of employment, or

           (b)           a company connected with such a company.

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            Section 839 of the Taxes Act 1988 (connected persons) applies for the purposes

of paragraph (b).

 

 

 
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