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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. | |
| |
| |
|
| |
| |
(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 | |
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|
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| |
(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 | |
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| |
(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— | |
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| |
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| |
| |
(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— | |
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| |
| |
(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. | |
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