Problem communicating with remote server...
          House of Commons portcullis
House of Commons
Session 2002 - 03
Internet Publications
Other Bills before Parliament

Finance Bill


Finance Bill
Part 4 — Stamp duty land tax

    50

 

 73    Alternative property finance: land sold to financial institution and re-sold to

individual

     (1)    This section applies where arrangements are entered into between an

individual and a financial institution under which—

           (a)           the institution—

5

                  (i)                 purchases a major interest in land (“the first transaction”), and

                  (ii)                sells that interest to the individual (“the second transaction”),

and

           (b)           the individual grants the institution a legal mortgage over that interest.

     (2)    The first transaction is exempt from charge if the vendor is—

10

           (a)           the individual concerned, or

           (b)           another financial institution by whom the interest was acquired under

other arrangements of the kind mentioned in section 72(1) entered into

between it and the individual.

     (3)    The second transaction is exempt from charge if the financial institution

15

complies with the provisions of this Part relating to the first transaction

(including the payment of any tax chargeable).

     (4)    This section does not apply if—

           (a)           the individual enters into the arrangements as trustee and any

beneficiary of the trust is not an individual, or

20

           (b)           the individual enters into the arrangements as partner and any of the

other partners is not an individual.

     (5)    In this section—

           (a)           “financial institution” means—

                  (i)                 a bank within the meaning of section 840A of the Taxes Act

25

1988, or

                  (ii)                a building society within the meaning of the Building Societies

Act 1986 (c. 53);

           (b)           “legal mortgage”—

                  (i)                 in relation to land in England or Wales, means a legal mortgage

30

as defined in section 205(1)(xvi) of the Law of Property Act 1925

(c. 20);

                  (ii)                in relation to land in Scotland, means a standard security;

                  (iii)               in relation to land in Northern Ireland, means a mortgage by

conveyance of a legal estate or by demise or sub-demise or a

35

charge by way of legal mortgage.

     (6)    References in this section to an individual shall be read, in relation to times

after the death of the individual concerned, as references to his personal

representatives.

 74    Collective enfranchisement by leaseholders

40

     (1)    This section applies where a chargeable transaction is entered into by an RTE

company in pursuance of a right of collective enfranchisement.

     (2)    In that case, the rate of tax is determined by reference to the fraction of the

relevant consideration produced by dividing the total amount of that

consideration by the number of flats in respect of which the right of collective

45

enfranchisement is being exercised.

 

 

Finance Bill
Part 4 — Stamp duty land tax

    51

 

     (3)    The tax chargeable is then determined by applying that rate to the chargeable

consideration for the transaction.

     (4)    In this section—

           (a)           “RTE company” has the meaning given by section 4A of the Leasehold

Reform, Housing and Urban Development Act 1993 (c. 28);

5

           (b)           “right of collective enfranchisement” means the right exercisable by an

RTE company under—

                  (i)                 Part 1 of the Landlord and Tenant Act 1987 (c. 31), or

                  (ii)                Chapter 1 of Part 1 of the Leasehold Reform, Housing and

Urban Development Act 1993; and

10

           (c)           “flat” has the same meaning as in the Act conferring the right of

collective enfranchisement.

     (5)    References in this section to the relevant consideration have the same meaning

as in section 55.

 75    Crofting community right to buy

15

     (1)    This section applies where—

           (a)           a chargeable transaction is entered into in pursuance of the crofting

community right to buy, and

           (b)           under that transaction two or more crofts are being bought.

     (2)    In that case, the rate of tax is determined by reference to the fraction of the

20

relevant consideration produced by dividing the total amount of that

consideration by the number of crofts being bought.

     (3)    The tax chargeable is then determined by applying that rate to the amount of

the chargeable consideration for the transaction in question.

     (4)    In this section “crofting community right to buy” means the right exercisable

25

by a crofting community body under Part 3 of the Land Reform (Scotland) Act

2003 (asp 2).

     (5)    References in this section to the relevant consideration have the same meaning

as in section 55.

Returns and other administrative matters

30

 76    Duty to deliver land transaction return

     (1)    In the case of every notifiable transaction the purchaser must deliver a return

(a “land transaction return”) to the Inland Revenue before the end of the period

of 30 days after the effective date of the transaction.

     (2)    The Inland Revenue may by regulations amend subsection (1) so as to require

35

a land transaction return to be delivered before the end of such shorter period

after the effective date of the transaction as may be prescribed or, if the

regulations so provide, on that date.

     (3)    A land transaction return in respect of a chargeable transaction must—

           (a)           include an assessment (a “self-assessment”) of the tax that, on the basis

40

of the information contained in the return, is chargeable in respect of

the transaction, and

 

 

Finance Bill
Part 4 — Stamp duty land tax

    52

 

           (b)           be accompanied by payment of the amount chargeable.

 77    Notifiable transactions

     (1)    This section specifies what land transactions are notifiable.

     (2)    The grant of a lease is notifiable if—

           (a)           the lease is for a contractual term of seven years or more and is granted

5

for chargeable consideration, or

           (b)           the lease is for a contractual term of less than seven years and either—

                  (i)                 the chargeable consideration consists or includes a premium in

respect of which tax is chargeable at a rate of 1% or higher, or

                  (ii)                the chargeable consideration consists of or includes rent in

10

respect of which tax is chargeable at a rate of 1% or higher,

                         or, in either case, in respect of which tax would be so chargeable but for

a relief.

     (3)    Any other acquisition of a major interest in land is notifiable unless it is exempt

from charge under Schedule 3.

15

     (4)    An acquisition of a chargeable interest other than a major interest in land is

notifiable if there is chargeable consideration in respect of which tax is

chargeable at a rate of 1% or higher, or in respect of which tax would be so

chargeable but for a relief.

 78    Returns, enquiries, assessments and related matters

20

     (1)    Schedule 10 has effect with respect to land transaction returns, assessments

and related matters.

     (2)    In that Schedule—

                    Part 1 contains general provisions about returns;

                    Part 2 imposes a duty to keep and preserve records;

25

                    Part 3 makes provision for enquiries into returns;

                    Part 4 provides for a Revenue determination if no return is delivered;

                    Part 5 provides for Revenue assessments;

                    Part 6 provides for relief in case of excessive assessment; and

                    Part 7 provides for appeals against Revenue decisions on tax.

30

     (3)    The Treasury may by regulations make such amendments of that Schedule,

and such consequential amendments of any other provisions of this Part, as

appear to them to be necessary or expedient from time to time.

 79    Registration of land transactions etc

     (1)    A land transaction to which this section applies, or (as the case may be) a

35

document effecting or evidencing a land transaction to which this section

applies, shall not be registered, recorded or otherwise reflected in an entry

made—

           (a)           in England and Wales, in the register of title maintained by the Chief

Land Registrar,

40

           (b)           in Scotland, in any register maintained by the Keeper of the Registers of

Scotland, or

 

 

Finance Bill
Part 4 — Stamp duty land tax

    53

 

           (c)           in Northern Ireland, in any register maintained by the Land Registry of

Northern Ireland or in the Registry of Deeds for Northern Ireland,

            unless there is produced, together with the relevant application, a certificate as

to compliance with the requirements of this Part in relation to the transaction.

            This does not apply where the entry is required to be made without any

5

application or so far as the entry relates to an interest or right other than the

chargeable interest acquired by the purchaser under the land transaction that

gives rise to the application.

     (2)    This section applies to every land transaction other than—

           (a)           a transaction that is exempt from charge by virtue of section 48(2) to (5)

10

(exempt interests);

           (b)           a transaction that is exempt from charge by virtue of any other

exemption or relief and the subject-matter of the transaction does not

consist of, or include, a major interest in land;

           (c)           a contract to which section 44(3) applies (treatment of contract

15

substantially performed without having been completed) or a transfer

of rights (within the meaning of section 45) under such a contract.

     (3)    The certificate must be either—

           (a)           a certificate by the Inland Revenue (a “Revenue certificate”) that a land

transaction return has been delivered in respect of the transaction, or

20

           (b)           a certificate by the purchaser (a “self-certificate”) that no land

transaction return is required in respect of the transaction.

     (4)    The Inland Revenue may make provision by regulations about Revenue

certificates.

            The regulations may, in particular—

25

           (a)           make provision as to the conditions to be met before a certificate is

issued;

           (b)           prescribe the form and content of the certificate;

           (c)           make provision about the issue of duplicate certificates if the original is

lost or destroyed;

30

           (d)           provide for the issue of multiple certificates where a return is made

relating to more than one transaction.

     (5)    Schedule 11 makes further provision about self-certificates.

            In that Schedule—

                    Part 1 contains general provisions,

35

                    Part 2 imposes a duty to keep and preserve records, and

                    Part 3 makes provision for enquiries into self-certificates.

     (6)    The registrar (in Scotland, the Keeper of the Registers of Scotland)—

           (a)           shall allow the Inland Revenue to inspect any certificates or self-

certificates produced to him under this section and in his possession,

40

and

           (b)           may enter into arrangements for affording the Inland Revenue other

information and facilities for verifying that the requirements of this

Part have been complied with.

 80    Adjustment where contingency ceases or consideration is ascertained

45

     (1)    Where section 51 (contingent, uncertain or unascertained consideration)

applies in relation to a transaction and—

 

 

Finance Bill
Part 4 — Stamp duty land tax

    54

 

           (a)           in the case of contingent consideration, the contingency occurs or it

becomes clear that it will not occur, or

           (b)           in the case of uncertain or unascertained consideration, an amount

relevant to the calculation of the consideration, or any instalment of

consideration, becomes ascertained,

5

            the following provisions have effect to require or permit reconsideration of

how this Part applies to the transaction (and to any transaction in relation to

which it is a linked transaction).

     (2)    If the effect of the new information is that a transaction becomes notifiable or

chargeable, or that additional tax is payable in respect of a transaction or that

10

tax is payable where none was payable before—

           (a)           the purchaser must make a return to the Inland Revenue within 30

days,

           (b)           the return must contain a self-assessment of the tax chargeable in

respect of the transaction on the basis of the information contained in

15

the return,

           (c)           the tax so chargeable is to be calculated by reference to the rates in force

at the effective date of the transaction, and

           (d)           the return must be accompanied by payment of the tax or additional tax

payable.

20

     (3)    The provisions of Schedule 10 (returns, enquiries, assessments and other

matters) apply to a return under this section as they apply to a land transaction

return.

     (4)    If the effect of the new information is that less tax is payable in respect of a

transaction than has already been paid, the amount overpaid shall on a claim

25

by the purchaser be repaid together with interest as from the date of payment.

 81    Further return where relief withdrawn

     (1)    Where relief is withdrawn to any extent under—

           (a)           Part 1 of Schedule 7 (group relief),

           (b)           Part 2 of that Schedule (reconstruction or acquisition relief), or

30

           (c)           Schedule 8 (charities relief),

            the purchaser must deliver a further return before the end of the period of 30

days after the date on which the disqualifying event occurred.

     (2)    The return must—

           (a)           include a self-assessment of the amount of tax chargeable, and

35

           (b)           be accompanied by payment of the tax chargeable.

     (3)    The provisions of Schedule 10 (returns, assessments and other matters) apply

to a return under this section as they apply to a land transaction return, with

the following adaptations—

           (a)           references to the transaction to which the return relates shall be read as

40

references to the disqualifying event;

           (b)           references to the effective date of the transaction shall be read as

references to the date on which the disqualifying event occurs.

     (4)    In this section “the disqualifying event” means—

 

 

Finance Bill
Part 4 — Stamp duty land tax

    55

 

           (a)           in relation to the withdrawal of group relief, the purchaser ceasing to

be a member of the same group as the vendor within the meaning of

Part 1 of Schedule 7;

           (b)           in relation to the withdrawal of reconstruction or acquisition relief, the

change of control of the acquiring company mentioned in paragraph

5

9(1)(a) of Schedule 7 or, as the case may be, the event mentioned in

paragraph 11(1)(a) or (2)(a) of that Schedule;

           (c)           in relation to the withdrawal of charities relief, a disqualifying event as

defined in paragraph 2(3) of Schedule 8.

 82    Loss or destruction of, or damage to, return etc

10

     (1)    This section applies where—

           (a)           a return delivered to the Inland Revenue, or

           (b)           any other document relating to tax made by or provided to the Inland

Revenue,

            has been lost or destroyed, or been so defaced or damaged as to be illegible or

15

otherwise useless.

     (2)    The Inland Revenue may treat the return as not having been delivered or the

document as not having been made or provided.

     (3)    Anything done on that basis shall be as valid and effective for all purposes as

it would have been if the return had not been made or the document had not

20

been made or provided.

     (4)    But if as a result a person is charged with tax and he proves to the satisfaction

of the General or Special Commissioners having jurisdiction in the case that he

has already paid tax in respect of the transaction in question, relief shall be

given, by reducing the charge or by repayment as the case may require.

25

 83    Formal requirements as to assessments, penalty determinations etc

     (1)    An assessment, determination, notice or other document required to be used in

assessing, charging, collecting and levying tax or determining a penalty under

this Part must be in accordance with the forms prescribed from time to time by

the Board and a document in the form so prescribed and supplied or approved

30

by the Board is valid and effective.

     (2)    Any such assessment, determination, notice or other document purporting to

be made under this Part is not ineffective—

           (a)           for want of form, or

           (b)           by reason of any mistake, defect or omission in it,

35

            if it is substantially in conformity with this Part and its intended effect is

reasonably ascertainable by the person to whom it is directed.

     (3)    The validity of an assessment or determination is not affected—

           (a)           by any mistake in it as to—

                  (i)                 the name of a person liable, or

40

                  (ii)                the amount of the tax charged, or

           (b)           by reason of any variance between the notice of assessment or

determination and the assessment or determination itself.

 

 

 
previous section contents continue
 
House of Commons home page Houses of Parliament home page House of Lords home page search page enquiries

© Parliamentary copyright 2003
Revised 19 June 2003