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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. | 5 |
(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 | 10 |
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). | 15 |
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 | 20 |
(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; | 25 |
(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)— | 30 |
(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. | 35 |
(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 | 40 |
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. | 5 |
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 | 10 |
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. | 15 |
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 | 20 |
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— | 25 |
“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 | 30 |
“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 | 35 |
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— | 40 |
(a) for life, or | |
(b) in perpetuity, or | |
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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 | 5 |
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 | 10 |
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 | 15 |
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 | 20 |
(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 | 25 |
(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. | 30 |
(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 | 35 |
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. | 40 |
(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. | 5 |
(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 | 10 |
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 | 15 |
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, | 20 |
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 | 25 |
(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 | 30 |
(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 | | 35 | | | 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% | | |
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(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— | 15 |
(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— | 20 |
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 | 25 |
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 | 30 |
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 | 35 |
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. | 5 |
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— | 10 |
(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 | 15 |
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 | 20 |
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 | 25 |
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. | 30 |
(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. | 35 |
(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. | 40 |
(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. | 45 |
(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; | 5 |
(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. | 10 |
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 | 15 |
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 | 20 |
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 | 25 |
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 | 30 |
(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 | 35 |
(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. | 40 |
(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. | 45 |
Section 839 of the Taxes Act 1988 (connected persons) applies for the purposes | |
of paragraph (b). | |
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