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Finance Bill
Schedule 37 — Stamp duty land tax and stamp duty
Part 2 — Re-enactment, with changes, of amendments made by section 109 regulations

523

 

           

Paragraph (b) does not apply to the grant of lease or licence to the

individual for a period of no more than six months.

      (6)  

Where relief is withdrawn the amount of tax chargeable is the

amount that would have been chargeable in respect of the

acquisition but for the relief.”.

5

      (3)  

In section 81 (further return where relief withdrawn)—

(a)   

in subsection (1) (obligation to deliver a further return), before

paragraph (a) insert—

“(za)   

paragraph 11 of Schedule 6A (relief for certain

acquisitions of residential property),”; and

10

(b)   

in subsection (4) (meaning of disqualifying event), before paragraph

(a) insert—

“(za)   

in relation to the withdrawal of relief under Schedule

6A, an event mentioned in paragraph (a), (b) or (c) of

paragraph 11(2), (3), (4) or (5) of that Schedule;”.

15

      (4)  

In section 87 (interest on unpaid tax)—

(a)   

in subsection (3)(a) (relevant date where relief is withdrawn), before

sub-paragraph (i) insert—

“(ia)   

Schedule 6A (relief for certain acquisitions of

residential property),”; and

20

(b)   

in subsection (4) (meaning of disqualifying event), before paragraph

(a) insert—

“(za)   

in relation to the withdrawal of relief under Schedule

6A an event mentioned in paragraph (a), (b) or (c) of

paragraph 11(2), (3), (4) or (5) of that Schedule;”.

25

Initial transfer of assets to trustees of unit trust scheme

18         

After section 64 insert—

“64A    

Initial transfer of assets to trustees of unit trust scheme

(1)   

The acquisition of a chargeable interest by trustees of a unit trust

scheme is exempt from charge if the following conditions are met.

30

(2)   

The conditions are that—

(a)   

immediately before the acquisition—

(i)   

there were no assets held by the trustees for the

purposes of the scheme, and

(ii)   

there were no units of the scheme in issue,

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(b)   

the only consideration for the acquisition is the issue of units

in the scheme to the vendor, and

(c)   

immediately after the acquisition the vendor is the only unit

holder of the scheme.”.

Return or further return in consequence of later linked transaction

40

19    (1)  

After section 81 (further return where relief withdrawn) insert—

“81A    

Return or further return in consequence of later linked transaction

(1)   

Where the effect of a transaction (“the later transaction”) that is

linked to an earlier transaction is that the earlier transaction becomes

 

 

Finance Bill
Schedule 37 — Stamp duty land tax and stamp duty
Part 2 — Re-enactment, with changes, of amendments made by section 109 regulations

524

 

notifiable, or that additional tax is payable in respect of the earlier

transaction or that tax is payable in respect of the earlier transaction

where none was payable before—

(a)   

the purchaser under the earlier transaction must deliver a

return or further return in respect of that transaction before

5

the end of the period of 30 days after the effective date of the

later transaction,

(b)   

the return must include a self-assessment of the amount of

tax chargeable as a result of the later transaction,

(c)   

the tax so chargeable is to be calculated by reference to the

10

rates in force at the effective date of the earlier transaction,

and

(d)   

the return must be accompanied by payment of the tax or

additional tax payable.

(2)   

The provisions of Schedule 10 (returns, enquiries, assessments and

15

other matters) apply to a return under this section as they apply to a

return under section 76 (general requirement to deliver land

transaction return), with the following adaptations—

(a)   

in paragraph 5 (formal notice to deliver return), the

requirement in sub-paragraph (2)(a) that the notice specify

20

the transaction to which it relates shall be read as requiring

both the earlier and later transactions to be specified;

(b)   

references to the effective date of the transaction to which the

return relates shall be read as references to the effective date

of the later transaction.

25

(3)   

This section does not affect any requirement to make a return under

section 76 in respect of the later transaction.”.

      (2)  

In section 81(3) for “land transaction return” substitute “return under section

76 (general requirement to deliver land transaction return)”.

      (3)  

In section 87 (interest on unpaid tax), in subsection (3) (meaning of “the

30

relevant date”), after paragraph (a) insert—

“(aa)   

in the case of an amount payable under section 81A in respect

of an earlier transaction because of the effect of a later linked

transaction, the effective date of the later transaction;”.

Declaration by person authorised to act on behalf of purchaser

35

20         

After section 81A (inserted by paragraph 19 above) insert—

“81B    

Declaration by person authorised to act on behalf of individual

(1)   

This section applies to the declaration mentioned in paragraph

1(1)(c) of Schedule 10 or paragraph 2(1)(c) of Schedule 11

(declaration that return or self-certificate is correct and complete).

40

(2)   

The requirement that an individual make such a declaration (alone

or jointly with others) is treated as met if a declaration to that effect

is made by a person authorised to act on behalf of that individual in

relation to the matters to which the return or certificate relates.

(3)   

For the purposes of this section a person is not regarded as

45

authorised to act on behalf of an individual unless he is so authorised

by a power of attorney in writing, signed by that individual.

 

 

Finance Bill
Schedule 37 — Stamp duty land tax and stamp duty
Part 2 — Re-enactment, with changes, of amendments made by section 109 regulations

525

 

   

In this subsection as it applies in Scotland “power of attorney”

includes factory and commission.

(4)   

Nothing in this section affects the making of a declaration in

accordance with—

(a)   

section 100(2) (persons through whom a company acts), or

5

(b)   

section 106(1) or (2) (person authorised to act on behalf of

incapacitated person or minor).”.

Crown application

21    (1)  

Section 107 (Crown application) is amended as follows.

      (2)  

For subsection (1) (extent of Crown application) substitute—

10

“(1)   

This Part binds the Crown, subject to the following provisions of this

section.”.

      (3)  

After subsection (3) add—

“(4)   

Nothing in this section shall be read as making the Crown liable to

prosecution for an offence.”.

15

Further provision relating to leases

22    (1)  

For section 120 (meaning of “lease” and other supplementary provisions)

substitute—

“120    

Further provisions relating to leases

Schedule 17A contains further provisions relating to leases.”.

20

      (2)  

After Schedule 17 insert—

“Schedule 17A

Section 120

 

Further provisions relating to leases

Meaning of “lease”

1          

In the application of this Part to England and Wales or Northern

25

Ireland “lease” means—

(a)   

an interest or right in or over land for a term of years

(whether fixed or periodic), or

(b)   

a tenancy at will or other interest or right in or over land

terminable by notice at any time.

30

Leases for a fixed term

2          

In the application of the provisions of this Part to a lease for a fixed

term, no account shall be taken of—

(a)   

any contingency as a result of which the lease may

determine before the end of the fixed term, or

35

(b)   

any right of either party to determine the lease or renew it.

Leases that continue after a fixed term

3     (1)  

This paragraph applies to—

 

 

Finance Bill
Schedule 37 — Stamp duty land tax and stamp duty
Part 2 — Re-enactment, with changes, of amendments made by section 109 regulations

526

 

(a)   

a lease for a fixed term and thereafter until determined, or

(b)   

a lease for a fixed term that may continue beyond the fixed

term by operation of law.

      (2)  

For the purposes of this Part (except section 77 (notifiable

transactions)), a lease to which this paragraph applies is treated—

5

(a)   

in the first instance as if it were a lease for the original fixed

term and no longer,

(b)   

if the lease continues after the end of that term, as if it were

a lease for a fixed term one year longer than the original

fixed term,

10

(c)   

if the lease continues after the end of the term resulting

from the application of paragraph (b), as if it were a lease

for a fixed term two years longer than the original fixed

term,

           

and so on.

15

      (3)  

Where the effect of sub-paragraph (2) in relation to the

continuation of the lease after the end of a fixed term is that

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

payable in respect of a transaction where none was payable

before—

20

(a)   

the purchaser must deliver a return or further return in

respect of that transaction before the end of the period of

30 days after the end of that term,

(b)   

the return must include a self-assessment of the amount of

tax chargeable in respect of the transaction on the basis of

25

the information contained in 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.

30

      (4)  

The provisions of Schedule 10 (returns, enquiries, assessments and

other matters) apply to a return under this paragraph as they

apply to a return under section 76 (general requirement to deliver

land transaction return), with the adaptation that references to the

effective date of the transaction shall be read as references to the

35

day on which the lease becomes treated as being for a longer fixed

term.

      (5)  

For the purposes of section 77 (notifiable transactions) a lease to

which this paragraph applies is a lease for whatever is its fixed

term.

40

Treatment of leases for indefinite term

4     (1)  

For the purposes of this Part (except section 77 (notifiable

transactions))—

(a)   

a lease for an indefinite term is treated in the first instance

as if it were a lease for a fixed term of a year,

45

(b)   

if the lease continues after the end of the term resulting

from the application of paragraph (a), it is treated as if it

were a lease for a fixed term of two years,

 

 

Finance Bill
Schedule 37 — Stamp duty land tax and stamp duty
Part 2 — Re-enactment, with changes, of amendments made by section 109 regulations

527

 

(c)   

if the lease continues after the end of the term resulting

from the application of paragraph (b), it is treated as if it

were a lease for a fixed term of three years,

           

and so on.

      (2)  

No account shall be taken for the purposes of this Part of any other

5

statutory provision in England and Wales or Northern Ireland

deeming a lease for an indefinite period to be a lease for a different

term.

      (3)  

Where the effect of sub-paragraph (1) in relation to the

continuation of the lease after the end of a deemed fixed term is

10

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

is payable in respect of a transaction where none was payable

before—

(a)   

the purchaser must deliver a return or further return in

respect of that transaction before the end of the period of

15

30 days after the end of that term,

(b)   

the return must include a self-assessment of the amount of

tax chargeable in respect of the transaction on the basis of

the information contained in the return,

(c)   

the tax so chargeable is to be calculated by reference to the

20

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.

      (4)  

The provisions of Schedule 10 (returns, enquiries, assessments and

other matters) apply to a return under this paragraph as they

25

apply to a return under section 76 (general requirement to deliver

land transaction return), with the adaptation that references to the

effective date of the transaction shall be read as references to the

day on which the lease becomes treated as being for a longer fixed

term.

30

     (4A)  

For the purposes of section 77 (notifiable transactions) a lease for

an indefinite term is a lease for a term of less then seven years.

      (5)  

References in this paragraph to a lease for an indefinite period

include—

(a)   

a periodic tenancy or other interest or right terminable by

35

a period of notice,

(b)   

a tenancy at will in England and Wales or Northern

Ireland, or

(c)   

any other interest or right terminable by notice at any time.

Treatment of successive linked leases

40

5     (1)  

This paragraph applies where—

(a)   

successive leases are granted or treated as granted

(whether at the same time or at different times) of the same

or substantially the same premises, and

(b)   

those grants are linked transactions.

45

      (2)  

This Part applies as if the series of leases were a single lease—

(a)   

granted at the time of the grant of the first lease in the

series,

 

 

Finance Bill
Schedule 37 — Stamp duty land tax and stamp duty
Part 2 — Re-enactment, with changes, of amendments made by section 109 regulations

528

 

(b)   

for a term equal to the aggregate of the terms of all the

leases, and

(c)   

in consideration of the rent payable under all of the leases.

      (3)  

The grant of later leases in the series is accordingly disregarded for

the purposes of this Part except section 81A (return or further

5

return in consequence of later linked transaction).

Rent

6     (1)  

For the purposes of this Part a single sum expressed to be payable

in respect of rent, or expressed to be payable in respect of rent and

other matters but not apportioned, shall be treated as entirely rent.

10

      (2)  

Sub-paragraph (1) is without prejudice to the application of

paragraph 4 of Schedule 4 (chargeable consideration: just and

reasonable apportionment) where separate sums are expressed to

be payable in respect of rent and other matters.

Variable or uncertain rent

15

7     (1)  

This paragraph applies to determine the amount of rent payable

under a lease where that amount—

(a)   

varies in accordance with provision in the lease, or

(b)   

is contingent, uncertain or unascertained.

      (2)  

As regards rent payable in respect of any period before the end of

20

the fifth year of the term of the lease—

(a)   

the provisions of this Part apply as in relation to other

chargeable consideration, and

(b)   

the provisions of section 51(1) and (2) accordingly apply if

the amount is contingent, uncertain or unascertained.

25

      (3)  

As regards rent payable in respect of any period after the end of

the fifth year of the term of the lease, the annual amount is

assumed for the purposes of this Part to be, in every case, equal to

the highest amount of rent payable in respect of any consecutive

twelve month period in the first five years of the term.

30

           

In determining that amount take into account (if necessary) any

amounts determined as mentioned in sub-paragraph (2)(b).

      (4)  

This paragraph has effect subject to paragraph 8 (adjustment

where rent payable ceases to be uncertain).

      (5)  

No account shall be taken for the purposes of this Part of any

35

provision for rent to be adjusted in line with the retail prices index.

First rent review in final quarter of fifth year

7A         

Where—

(a)   

a lease contains provision under which the rent may be

adjusted,

40

(b)   

under that provision the first (or only) such adjustment—

(i)   

is to an amount that (before the adjustment) is

uncertain, and

(ii)   

has effect from a date (the “review date”) that is

expressed as falling five years after a specified date,

45

 

 

Finance Bill
Schedule 37 — Stamp duty land tax and stamp duty
Part 2 — Re-enactment, with changes, of amendments made by section 109 regulations

529

 

   

and

(c)   

the specified date falls within the three months before the

beginning of the term of the lease,

           

this Schedule has effect as if references to the first five years of the

term of the lease were to the period beginning with the start of the

5

term of the lease and ending with the review date.

           

References to the fifth year of the term of the lease shall be read

accordingly.”.

Adjustment where rent ceases to be uncertain

8     (1)  

Where the provisions of section 51(1) and (2) (contingent,

10

uncertain or unascertained consideration) apply in relation to a

transaction by virtue of paragraph 7 (uncertain rent) and—

(a)   

the end of the fifth year of the term of the lease is reached,

or

(b)   

the amount of rent payable in respect of the first five years

15

of the term of the lease ceases to be uncertain at an earlier

date,

           

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).

20

      (2)  

For the purposes of this paragraph the amount of rent payable

ceases to be uncertain when—

(a)   

in the case of contingent rent, the contingency occurs or it

becomes clear that it will not occur, and

(b)   

in the case of uncertain or unascertained rent, the amount

25

becomes ascertained.

      (3)  

If the result as regards the rent paid or payable in respect of the

first five years of the term of the lease is that a transaction becomes

notifiable, or that additional tax is payable in respect of a

transaction or that tax is payable where none was payable

30

before—

(a)   

the purchaser must make a return to the Inland Revenue

within 30 days of the date referred to in sub-paragraph

(1)(a) or (b),

(b)   

the return must contain a self-assessment of the tax

35

chargeable in respect of the transaction on the basis of the

information contained in 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 any tax or

40

additional tax payable.

      (4)  

The provisions of Schedule 10 (returns, enquiries, assessment and

other matters) apply to a return under this paragraph as they

apply to a return under section 76 (general requirement to make

land transaction return), subject to the adaptation that references

45

to the effective date of the transaction shall be read as references to

the date referred to in sub-paragraph (1)(a) or (b).

 

 

 
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