• Home
• Parliamentary business
• MPs, Lords & offices
• About Parliament
• Get involved
• Visiting
• Education

• House of Commons
• House of Lords
• What's on
• Bills & legislation
• Committees
• Publications & records
• Parliament TV
• News
• Topics

House of Commons

Session 2002 - 03 Internet Publications Other Bills before Parliament

Finance Bill

Finance Bill Part 4 — Stamp duty land tax     70
(d)           an institution that is the sole or main residence of at least 90% of its
residents and does not fall within any of paragraphs (a) to (f) of
subsection (3).
(3)    For the purposes of subsection (1) a building used for any of the following
purposes is not used as a dwelling—	5
(a)           a home or other institution providing residential accommodation for
children;
(b)           a hall of residence for students in further or higher education;
(c)           a home or other institution providing residential accommodation with
personal care for persons in need of personal care by reason of old age,	10
disablement, past or present dependence on alcohol or drugs or past or
present mental disorder;
(d)           a hospital or hospice;
(e)           a prison or similar establishment;
(f)           a hotel or inn or similar establishment.	15
(4)    Where a building is used for a purpose specified in subsection (3), no account
shall be taken for the purposes of subsection (1)(a) of its suitability for any
other use.
(5)    Where a building that is not in use is suitable for use for at least one of the
purposes specified in subsection (2) and at least one of those specified in	20
subsection (3)—
(a)           if there is one such use for which it is most suitable, or if the uses for
which it is most suitable are all specified in the same sub-paragraph, no
account shall be taken for the purposes of subsection (1)(a) of its
suitability for any other use,	25
(b)           otherwise, the building shall be treated for those purposes as suitable
for use as a dwelling.
(6)    In this section “building” includes part of a building.
(7)    Where six or more separate dwellings are the subject of a single transaction
involving the transfer of a major interest in, or the grant of a lease over, them,	30
then, for the purposes of this Part as it applies in relation to that transaction,
those dwellings are treated as not being residential property.
(8)    The Treasury may by order—
(a)           amend subsections (2) and (3) so as to change or clarify the cases where
use of a building is, or is not to be, use of a building as a dwelling for	35
the purposes of subsection (1);
(b)           amend or repeal subsection (7) and the reference to that subsection in
subsection (1).
Any such order may contain such incidental, supplementary, consequential or
transitional provision as appears to the Treasury to be necessary or expedient.	40
117   Meaning of “major interest” in land
(1)    References in this Part to a “major interest” in land shall be construed as
follows.
(2)    In relation to land in England or Wales, the references are to—
(a)           an estate in fee simple absolute, or	45
(b)           a term of years absolute,
Finance Bill Part 4 — Stamp duty land tax     71
whether subsisting at law or in equity.
(3)    In relation to land in Scotland, the references are to—
(a)           the interest of an owner of land, or
(b)           the right of a tenant over property subject to a lease.
(4)    In relation to land in Northern Ireland, the references are to—	5
(a)           any freehold estate, or
(b)           any leasehold estate,
whether subsisting at law or in equity.
118   Meaning of “market value”
For the purposes of this Part “market value” shall be determined as for the	10
purposes of the Taxation of Chargeable Gains Act 1992 (c. 12) (see sections 272
to 274 of that Act).
119   Meaning of “effective date” of a transaction
(1)    Except as otherwise provided, the effective date of a land transaction for the
purposes of this Part is the date of completion.	15
(2)    Other provision as to the effective date of certain descriptions of land
transaction is made by—
section 44(3) (contract and conveyance: contract substantially performed
without having been completed), and
section 46(3) (options and rights of pre-emption).	20
120   Meaning of “lease” and related expressions
(1)    In the application of this Part to England and Wales or Northern Ireland “lease”
means—
(a)           an interest or right in or over land for a term of years (whether fixed or
periodic), or	25
(b)           a tenancy at will or other interest or right in or over land terminable by
notice at any time.
(2)    In this Part—
(a)           references to a lease for a definite term are to a lease for a fixed term,
and	30
(b)           references to a lease for an indefinite term are to—
(i)                 a periodic tenancy or other interest or right terminable by a
period of notice,
(ii)                a tenancy at will in England and Wales or Northern Ireland, or
(iii)               any other interest or right terminable by notice at any time.	35
(3)    A lease granted for a fixed term and thereafter until determined is treated for
the purposes of this Part as a lease for a definite term equal to the fixed term
together with such further period as must elapse before the earliest date at
which the lease can be determined.
(4)    In the application of this Part to Scotland references to the reversion on a lease	40
shall be read as references to the interest of the landlord in the property subject
to the lease.
Finance Bill Part 4 — Stamp duty land tax     72
121   Minor definitions
In this Part—
“assignment”, in Scotland, means assignation;
“completion”, in Scotland, means the settlement of the transaction;
“employee” includes an office-holder and related expressions have a	5
corresponding meaning;
“jointly entitled” means—
(a)                 in England and Wales, beneficially entitled as joint tenants or
tenants in common,
(b)                 in Scotland, entitled as joint owners or owners in common,	10
(c)                 in Northern Ireland, beneficially entitled as joint tenants,
tenants in common or coparceners;
“land” includes—
(a)                 buildings and structures, and
(b)                 land covered by water;	15
“registered social landlord” means—
(a)                 in relation to England and Wales, a body registered as a social
landlord in a register maintained under section 1(1) of the
Housing Act 1996 (c. 52);
(b)                 in relation to Scotland, a body registered in the register	20
maintained under section 57 of the Housing (Scotland) Act 2001
(asp 10);
(c)                 in relation to Northern Ireland, a housing association registered
in the register maintained under Article 14 of the Housing
(Northern Ireland) Order 1992 (S.I. 1992/1725 (N.I. 15));	25
“standard security” has the meaning given by the Conveyancing and
Feudal Reform (Scotland) Act 1970 (c. 35);
“statutory provision” means any provision made by or under an Act of
Parliament, an Act of the Scottish Parliament or any Northern Ireland
legislation;	30
“surrender”, in Scotland, means renunciation;
“tax”, unless the context otherwise requires, means tax under this Part.
122   Index of defined expressions
In this Part the expressions listed below are defined or otherwise explained by
the provisions indicated—	35
acquisition relief Schedule 7, paragraph 8(1)     assignment (in Scotland) section 121     bare trust Schedule 16, paragraph 1(2)     the Board (in relation to the section 42(3)     Inland Revenue)     40   chargeable consideration section 50 and Schedule 4     chargeable interest section 48(1)     chargeable transaction section 49
Finance Bill Part 4 — Stamp duty land tax     73
charities relief Schedule 8, paragraph 1(1)     closure notice Schedule 10, paragraph 23(1) (in       relation to a land transaction       return); Schedule 11, paragraph       16(1) (in relation to a self-   5     certificate)     company section 100 (except as otherwise       expressly provided)     completion (in Scotland) section 121     contingent (in relation to section 51(3)   10   consideration)       delivery (in relation to a land Schedule 10, paragraph 2(2)     transaction return)       discovery assessment Schedule 10, paragraph 28(1)     effective date (in relation to a section 119   15   land transaction)       employee section 121     exempt interest section 48(2) to (5)     filing date (in relation to a land Schedule 10, paragraph 2(1)     transaction return)     20   implementation date Schedule 19, paragraph 2(2)     the Inland Revenue section 113     jointly entitled section 121     land section 121     land transaction section 43(1)   25   land transaction return section 76(1)     lease (and related expressions) section 120     linked transactions section 108     main subject-matter (in relation section 43(6)     to a land transaction)     30   major interest (in relation to section 117     land)       market value section 118     notice of enquiry Schedule 10, paragraph 12(1) (in       relation to a land transaction   35     return); Schedule 11, paragraph       7(1) (in relation to a self-       certificate)
Finance Bill Part 4 — Stamp duty land tax     74
notifiable (in relation to a land section 77     transaction)       partnership (and related Schedule 15, paragraphs 1 to 4     expressions)       purchaser section 43(4)   5   rate of tax section 55(7)     reconstruction relief Schedule 7, paragraph 7(1)     registered social landlord section 121     residential property section 116     Revenue determination Schedule 10, paragraph 25(1)   10   self-assessment section 76(3)(a)     self-certificate section 79(3)(b)     settlement Schedule 16, paragraph 1(1)     standard security section 121     statutory provision section 121   15   subject-matter (in relation to a section 43(6)     land transaction)       substantial performance (in section 44(4) to (6)     relation to a contract)       surrender (in Scotland) section 121   20   tax section 121     uncertain (in relation to section 51(3)     consideration)       unit holder section 101(4)     unit trust scheme section 101(4)   25   vendor section 43(4)
Final provisions
123   Consequential amendments
(1)    Schedule 18 contains certain amendments consequential on the provisions of
this Part.	30
(2)    The Treasury may by regulations make such other amendments and repeals as
appear to them appropriate in consequence of the provisions of this Part.
Finance Bill Part 5 — Stamp duty     75
(3)    The regulations may, in particular, make such provision as the Treasury think
fit for reproducing in relation to stamp duty land tax the effect of enactments
providing for exemption from stamp duty.
124   Commencement and transitional provisions
Schedule 19 makes provision for and in connection with the coming into force	5
of the provisions of this Part.
Part 5
Stamp duty
125   Abolition of stamp duty except on instruments relating to stock or marketable
securities	10
(1)    Stamp duty is chargeable under Schedule 13 of the Finance Act 1999 (c. 16) only
on instruments relating to stock or marketable securities.
(2)    Section 12 of the Finance Act 1895 (c. 16) (collection of stamp duty in cases of
property vested by Act or purchased under statutory powers) does not apply
to property other than stock or marketable securities.	15
(3)    This section shall be construed as one with the Stamp Act 1891 (c. 39).
(4)    Part 1 of Schedule 20 to this Act contains provisions supplementing this section
and Part 2 of that Schedule provides for consequential amendments and
repeals.
(5)    This section and that Schedule apply—	20
(a)           in relation to instruments effecting land transactions that—
(i)                 are SDLT transactions within the meaning of Schedule 19
(stamp duty land tax: commencement and transitional
provisions), or
(ii)                would be such transactions but for an exemption or relief from	25
stamp duty land tax;
(b)           in relation to other instruments, if they are executed on or after the
implementation date for the purposes of stamp duty land tax (see
Schedule 19 to this Act).
(6)    In subsection (5)(a) “land transaction” has the same meaning as in Part 4 of this	30
Act.
(7)    This section and Schedule 20 have effect subject to paragraph 13(2) and (3) of
Schedule 15 to this Act (continued application of stamp duty in relation to
certain partnership transactions).
126   Circumstances in which group relief withdrawn	35
(1)    Section 111 of the Finance Act 2002 (c. 23) (stamp duty: withdrawal of group
relief) is amended as follows.
(2)    In subsection (1)(b) (circumstances in which relief withdrawn: transferee
company ceasing to be member of group within two years) for “two years”
substitute “three years”.	40
Finance Bill Part 5 — Stamp duty     76
(3)    In subsection (1)(c) (circumstances in which relief withdrawn: transferee
company holding estate or interest when it ceases to be member of group)—
(a)           in the opening words—
(i)                 for “it ceases” substitute “the transferee company ceases”, and
(ii)                for “it holds” substitute “it or a relevant associated company	5
holds”;
(b)           in sub-paragraph (i) for “to it” substitute “to the transferee company”;
and
(c)           for the closing words substitute “and that has not subsequently been
transferred at market value by a duly stamped instrument on which ad	10
valorem duty was paid and in respect of which group relief was not
claimed”.
(4)    In subsection (3)—
(a)           after “transferred” insert “to the transferee company”, and
(b)           for “what the transferee company holds at the time it ceases to be a	15
member” substitute “what is held by that company or, as the case may
be, that company and any relevant associated companies, at the time it
or they cease to be members”.
(5)    After subsection (4) insert—
“(4A)              In this section “relevant associated company”, in relation to the	20
transferee company, means a company that—
(a)                 is a member of the same group as the transferee company
immediately before that company ceases to be a member of the
same group as the transferor company, and
(b)                 ceases to be a member of the same group as the transferor	25
company in consequence of the transferee company so
ceasing.”.
(6)    In paragraph 4(3) of Schedule 34 to the Finance Act 2002 (withdrawal of group
relief: supplementary provisions), in paragraph (b)—
(a)           in the opening words—	30
(i)                 for “it ceases” substitute “the transferee company ceases”, and
(ii)                for “it holds” substitute “it or a relevant associated company (as
defined in sub-paragraph (4) below) holds”;
(b)           in sub-paragraph (i) for “to it” substitute “to the transferee company”;
and	35
(c)           for the closing words substitute “and that has not subsequently been
transferred at market value by a duly stamped instrument on which ad
valorem duty was paid and in respect of which group relief was not
claimed”.
(7)    In the closing words of that sub-paragraph, for the words from “as if” to the	40
end substitute “as if the transferee had then ceased to be a member of the same
group as the transferor company and had then held the estate or interest
referred to in paragraph (b).”.
(8)    After that sub-paragraph insert—
“(4)                In sub-paragraph (3)(b) “relevant associated company”, in relation to	45
the transferee company, means a company that is in the same group
as the transferee company immediately before the transferee
company ceases to be a member of the new group and which ceases

© Parliamentary copyright 2003	Revised 19 June 2003