Finance Bill

House of Commons

Session 2003 - 04
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Other Bills before Parliament

Finance Bill

Finance Bill
Part 6 — Other taxes
237

Stamp duty land tax
283
Notification, registration and penalties
(1)
Part 4 of the Finance Act 2003 (stamp duty land tax) is amended as follows.
(2)
In section 77 (notifiable transactions)—
(a)
after subsection (2) insert—
5
“(2A)
The assignment of a lease is notifiable if—
(a)
the grant of the lease, if occurring at the time of the
assignment, would be notifiable, or
(b)
there is consideration for the assignment that is
chargeable at a rate of 1% or higher, or would be so
10
chargeable but for a relief.”;
(b)
in subsection (3), for “unless it is exempt from charge under Schedule
3” substitute “unless—
(a)
the acquisition is exempt from charge under Schedule 3,
or
15
(b)
the land consists entirely of residential property and the
chargeable consideration for the acquisition, together
with that of any linked transactions, is less than £1,000”;
(c)
after subsection (5) (inserted by paragraph 4(3) of Schedule 37 to this
Act) insert—
20
“(6)
In this section “relief” does not include any exemption from
charge under Schedule 3.”.
(3)
In section 79 (registration of land transactions etc), in subsection (1)(b), after
“any register maintained by the Keeper of the Registers of Scotland” insert
“(other than the Register of Community Interests in Land)”.
25
(4)
In section 99 (general provisions about penalties), after subsection (2) insert—
“(2A)
Where a person is liable to more than one tax-related penalty in respect
of the same land transaction, each penalty after the first shall be
reduced so that his liability to such penalties, in total, does not exceed
the amount of whichever is (or, but for this subsection, would be) the
30
greatest one.”.
(5)
In Schedule 6 (disadvantaged areas relief)—
(a)
for the heading of Part 4 substitute “Supplementary”;
(b)
after paragraph 12 insert—
“Notification of transactions
35
13
For the purposes of section 77 (which specifies what land
transactions are notifiable) no account shall be taken of any
provision of this Schedule to the effect that consideration
does not count as chargeable consideration.”.
284
Claims not included in returns
40
(1)
Part 4 of the Finance Act 2003 (stamp duty land tax) is amended as follows.

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Part 6 — Other taxes
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(2)
After section 82 insert—
“82A
Claims not included in returns
Schedule 11A has effect with respect to claims not included in returns.”.
(3)
After Schedule 11 insert the Schedule set out in Schedule 38 to this Act.
(4)
In section 80 (adjustment where contingency ceases or consideration is
5
ascertained), in subsection (4) (claim for repayment), for the words from “the
amount” to the end substitute—
“(a)
the purchaser may, within the period allowed for amendment
of the land transaction return, amend the return accordingly;
(b)
after the end of that period he may (if the land transaction
10
return is not so amended) make a claim to the Inland Revenue
for repayment of the amount overpaid”.
(5)
In section 111 (claim for repayment if regulations under general power not
approved) in subsection (1), for the words from “any amount” to the end
substitute “a claim may be made to the Inland Revenue for repayment of any
15
tax, interest or penalty that would not have been payable but for the
regulations”.
(6)
In section 113 (functions conferred on “the Inland Revenue”), after subsection
(3) insert—
“(3A)
The following functions of the Inland Revenue under Schedule 11A
20
(claims not included in returns) are functions of the Board—
(a)
functions under paragraph 2(1) (form of claims),
(b)
functions relating to a claim made to the Board.”.
(7)
In Schedule 10 (returns, enquiries, assessments and appeals), in paragraph 33
(relief in case of double assessment)—
25
(a)
in sub-paragraph (1), for “relief under this paragraph” substitute “to the
Inland Revenue against the double charge”;
(b)
omit sub-paragraphs (2) and (3).
(8)
In paragraph 34 of that Schedule (relief in case of mistake in return)—
(a)
in sub-paragraph (1), for “relief under this paragraph” substitute “to the
30
Inland Revenue against the double charge”;
(b)
in sub-paragraph (2), omit “by notice in writing given to the Inland
Revenue”;
(c)
omit sub-paragraph (3).
285
Assents and appropriations by personal representatives
35
(1)
In Schedule 3 to the Finance Act 2003 (stamp duty land tax: transactions
exempt from charge), after paragraph 3 insert—
“Assents and appropriations by personal representatives
3A    (1)
The acquisition of property by a person in or towards satisfaction of
his entitlement under or in relation to the will of a deceased person,
40
or on the intestacy of a deceased person, is exempt from charge.

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      (2)
Sub-paragraph (1) does not apply if the person acquiring the
property gives any consideration for it, other than the assumption of
secured debt.
      (3)
In this paragraph—
“debt” means an obligation, whether certain or contingent, to
5
pay a sum of money either immediately or at a future date,
and
“secured debt” means debt that, immediately after the death of
the deceased person, is secured on the property.”.
(2)
In Schedule 4 to that Act (stamp duty land tax: chargeable consideration), in
10
paragraph 8 (debt as consideration), after sub-paragraph (2) insert—
    “(2A)
Where a land transaction would be exempt from charge under
paragraph 3A of Schedule 3 (assents and appropriations by personal
representatives) but for sub-paragraph (2) of that paragraph (cases
where person acquiring property gives consideration for it), the
15
chargeable consideration for the transaction does not include the
amount of any secured debt assumed.

“Secured debt” has the same meaning as in that paragraph.”.
(3)
The amendments made by this section are deemed always to have had effect.
286
Charitable trusts
20
(1)
In Schedule 8 to the Finance Act 2003 (stamp duty land tax: charities relief),
after paragraph 2 insert—
“Charitable trusts
3     (1)
This Schedule applies in relation to a charitable trust as it applies in
relation to a charity.
25
      (2)
In this paragraph “charitable trust” means—
(a)
a trust of which all the beneficiaries are charities, or
(b)
a unit trust scheme in which all the unit holders are charities,

and “charity” has the same meaning as in paragraph 1.
      (3)
In this Schedule as it applies by virtue of this paragraph—
30
(a)
references to the purchaser in paragraphs (a) and (b) of
paragraph 1(2) are to the beneficiaries or unit holders, or any
of them;
(b)
the reference to the purchaser in paragraph 2(3)(a) is to any of
the beneficiaries or unit holders.”.
35
(2)
This section applies in relation to any transaction of which the effective date
(within the meaning of Part 4 of the Finance Act 2003 ) is on or after the day on
which this Act is passed.
287
Shared ownership leases
(1)
In Schedule 9 to the Finance Act 2003 (stamp duty land tax: right to buy, shared
40

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ownership leases etc), after paragraph 4 insert—
“Shared ownership lease: treatment of staircasing transaction
4A    (1)
This paragraph applies where under a shared ownership lease—
(a)
the lessee or lessees have the right, on the payment of a sum,
to require the terms of the lease to be altered so that the rent
5
payable under it is reduced, and
(b)
by exercising that right the lessee or lessees acquire an
interest, additional to one already held, calculated by
reference to the market value of the dwelling and expressed
as a percentage of the dwelling or its value (a “share of the
10
dwelling”).
      (2)
Such an acquisition is exempt from charge if—
(a)
an election was made for tax to be charged in accordance with
paragraph 2 or, as the case may be, paragraph 4 and any tax
chargeable in respect of the grant of the lease has been paid,
15
or
(b)
immediately after the acquisition the total share of the
dwelling held by the lessee or lessees does not exceed 80%.
      (3)
In this paragraph “shared ownership lease” means a lease granted—
(a)
by a qualifying body, or
20
(b)
in pursuance of the preserved right to buy,

in relation to which the conditions in paragraph 2(2) or 4(2) are met.
      (4)
Section 118 (meaning of “market value”) does not apply in relation to
the references in this paragraph to the market value of the
dwelling.”.
25
(2)
In sub-paragraph (1) of paragraph 5 of that Schedule (meaning of “qualifying
body” and “preserved right to buy”) for “2 and 4” substitute “2, 4 and 4A”.
(3)
In Schedule 19 to that Act (stamp duty land tax: commencement and
transitional provisions), in paragraph 7 (earlier related transactions under
stamp duty), for sub-paragraph (2) substitute—
30
“(2)
In paragraph 3 of Schedule 9 (relief for transfer of reversion under
shared ownership lease where election made for market value
treatment) and paragraph 4A of that Schedule (shared ownership
lease: treatment of staircasing transaction) as they apply in a case
where the original lease was granted before the implementation
35
date—
(a)
a reference to a lease to which paragraph 2 of that Schedule
applies shall be read as a reference to a lease to which section
97 of the Finance Act 1980 applied (which made provision for
stamp duty corresponding to that paragraph), and
40
(b)
a reference to an election having been made for tax to be
charged in accordance with paragraph 2 or 4 of that Schedule
shall be read as a reference to the lease having contained a
statement of the parties’ intention such as is mentioned in
section 97(2)(d) of the Finance Act 1980 or, as the case may be,
45
paragraph (d) of section 108(5) of the Finance Act 1981 (which
made provision for stamp duty corresponding to paragraph
4).”.

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(4)
Subsections (1) and (2) apply in relation to an acquisition after 17th March 2004.
(5)
Subsection (3) is deemed to have come into force on 1st December 2003.
288
Application to certain partnership transactions
Schedule 39 to this Act (which makes provision with respect to the application
of stamp duty land tax to certain transactions involving partnerships) has
5
effect.
289
Liability of partners
In paragraph 7 of Schedule 15 to the Finance Act 2003 (c. 14) (stamp duty land
tax: joint and several liability of responsible partners) after sub-paragraph (1)
insert—
10
    “(1A)
No amount may be recovered by virtue of sub-paragraph (1)(a) or (b)
from a person who did not become a responsible partner until after
the effective date of the transaction in respect of which the tax is
payable.”
Part 7
15
Disclosure of tax avoidance schemes
290
Meaning of “notifiable arrangements” and “notifiable proposal”
(1)
In this Part “notifiable arrangements” means any arrangements which—
(a)
fall within any description prescribed by the Treasury by regulations,
(b)
enable any person to obtain an advantage in relation to any tax that is
20
so prescribed in relation to arrangements of that description, and
(c)
are such that the main benefit, or one of the main benefits, that might
be expected to arise from the arrangements is the obtaining of that
advantage.
(2)
In this Part “notifiable proposal” means a proposal for arrangements which, if
25
entered into, would be notifiable arrangements (whether the proposal relates
to a particular person or to any person who may seek to take advantage of it).
291
Meaning of “promoter”
(1)
For the purposes of this Part a person is a promoter—
(a)
in relation to a notifiable proposal, if, in the course of a trade, profession
30
or business which involves the provision to other persons of services
relating to taxation,—
(i)
he is to any extent responsible for the design of the proposed
arrangements, or
(ii)
he makes the notifiable proposal available for implementation
35
by other persons, and
(b)
in relation to notifiable arrangements, if he is by virtue of paragraph
(a)(ii) a promoter in relation to a notifiable proposal which is
implemented by those arrangements or if, in the course of a trade,
profession or business which involves the provision to other persons of
40
services relating to taxation, he is to any extent responsible for—

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(i)
the design of the arrangements, or
(ii)
the organisation or management of the arrangements.
(2)
A person is not to be treated as a promoter for the purposes of this Part by
reason of anything done in prescribed circumstances.
292
Duties of promoter
5
(1)
The promoter must, within the prescribed period after the relevant date,
provide the Board in the prescribed manner with prescribed information
relating to any notifiable proposal.
(2)
In subsection (1) “the relevant date” means the earlier of the following—
(a)
the date on which the promoter makes a notifiable proposal available
10
for implementation by any other person, or
(b)
the date on which the promoter first becomes aware of any transaction
forming part of the proposed arrangements.
(3)
The promoter must, within the prescribed period after the date on which he
first becomes aware of any transaction forming part of any notifiable
15
arrangements, provide the Board in the prescribed manner with prescribed
information relating to those arrangements, unless those arrangements
implement a proposal in respect of which notice has been given under
subsection (1).
(4)
Where two or more persons are promoters in relation to the same notifiable
20
proposal or notifiable arrangements, compliance by any of them with
subsection (1) or (3) discharges the duty under either of those subsections of the
other or others.
(5)
Where a person is a promoter in relation to two or more notifiable proposals or
sets of notifiable arrangements which are substantially the same (whether they
25
relate to the same parties or different parties), he need not provide information
under subsection (1) or (3) if he has already provided information under either
of those subsections in relation to any of the other proposals or arrangements.
293
Duty of person dealing with promoter outside United Kingdom
(1)
Any person (“the client”) who enters into any transaction forming part of any
30
notifiable arrangements in relation to which—
(a)
a promoter is resident outside the United Kingdom, and
(b)
no promoter is resident in the United Kingdom,

must, within the prescribed period after doing so, provide the Board in the
prescribed manner with prescribed information relating to the notifiable
35
arrangements.
(2)
Compliance with section 292(1) by any promoter in relation to the notifiable
arrangements discharges the duty of the client under subsection (1).
294
Duty of parties to notifiable arrangements not involving promoter
Any person who enters into any transaction forming part of notifiable
40
arrangements as respects which neither he nor any other person in the United
Kingdom is liable to comply with section 292 (duties of promoter) or section
293 (duty of person dealing with promoter outside the United Kingdom) must

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at the prescribed time provide the Board in the prescribed manner with
prescribed information relating to the notifiable arrangements.
295
Arrangements to be given reference number
(1)
Where a person complies with section 292(1) or (3), 293(1) or 294 in relation to
any notifiable proposal or notifiable arrangements, the Board may within 30
5
days—
(a)
allocate a reference number to the notifiable arrangements or, in the
case of a notifiable proposal, to the proposed notifiable arrangements,
and
(b)
if it does so, notify the person of that number.
10
(2)
In this Part “reference number”, in relation to any notifiable arrangements,
means the reference number allocated under this section.
296
Duty of promoter to notify client of number
(1)
Any promoter who is providing services to any person (“the client”) in
connection with notifiable arrangements must, within 30 days after the
15
relevant date, provide the client in the prescribed form with prescribed
information relating to any reference number that has been notified to the
promoter by the Board—
(a)
in relation to those arrangements, or
(b)
in relation to arrangements which are substantially the same as those
20
arrangements (whether made between the same parties or different
parties).
(2)
In subsection (1) “the relevant date” means—
(a)
the date on which the promoter first becomes aware of any transaction
forming part of the notifiable arrangements, or
25
(b)
if later, the date on which the number is notified to the promoter under
section 295.
297
Duty of parties to notifiable arrangements to notify Board of number, etc.
(1)
Any person who is a party to any notifiable arrangements must at the
prescribed time or times provide the Board in the prescribed form and manner
30
with prescribed information relating to—
(a)
any reference number notified to him under section 295 by the Board or
under section 296 by the promoter, and
(b)
the time when he obtains or expects to obtain by virtue of the
arrangements an advantage in relation to any relevant tax.
35
(2)
For the purposes of subsection (1) a tax is a “relevant tax” in relation to any
notifiable arrangements if it is prescribed in relation to arrangements of that
description by regulations under section 290.
(3)
Regulations under subsection (1) may—
(a)
require the number and other information to be included in any return
40
or account which the person is required by or under any enactment to
deliver to the Board, and
(b)
require the number and other information to be provided separately to
the Board in the prescribed form and in the prescribed manner.