Finance Bill

House of Commons

Session 2003 - 04
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Finance Bill

Finance Bill
Schedule 37 — Stamp duty land tax and stamp duty
Part 2 — Re-enactment, with changes, of amendments made by section 109 regulations
537

      (2)
Where in Scotland there is a lease constituted by concluded
missives of let (“the first lease”) and at some later time a lease is
executed (“the second lease”)—
(a)
the first lease is treated as if it were surrendered at that
time, and
5
(b)
the second lease is treated for the purposes of paragraph 9
(rent for overlap period in case of grant of further lease) as
if it were granted in consideration of that surrender.
      (3)
Where in Scotland—
(a)
there is an agreement (including missives of let not
10
constituting a lease) under which a lease is to be executed,
and
(b)
the agreement is substantially performed without a lease
having been executed,

the agreement is treated as if it were the grant of a lease in
15
accordance with the agreement (“the notional lease”), beginning
with the date of substantial performance.

The effective date of the transaction is when the agreement is
substantially performed.
      (4)
Where sub-paragraph (3) applies and at some later time a lease is
20
executed—
(a)
the notional lease is treated as if it were surrendered at that
time, and
(b)
the lease itself is treated for the purposes of paragraph 9 as
if it were granted in consideration of that surrender.
25
      (5)
References in sub-paragraphs (2) to (4) to the execution of a lease
are to the execution of a lease that either is in conformity with, or
relates to substantially the same property and period as, the
missives of let or other agreement.
      (6)
Where sub-paragraph (3) applies and the agreement is (to any
30
extent) afterwards rescinded or annulled, or is for any other
reason not carried into effect, the tax paid by virtue of that sub-
paragraph shall (to that extent) be repaid by the Inland Revenue.

Repayment must be claimed by amendment of the land
transaction return made in respect of the agreement.”.
35
      (3)
In section 51 (contingent, uncertain or unascertained consideration), after
subsection (4) add—
“(5)
This section applies in relation to chargeable consideration
consisting of rent only to the extent that it is applied by paragraph 7
of Schedule 17A.”.
40
      (4)
In section 80 (adjustment where contingency ceases or consideration
becomes certain)—
(a)
in subsection (3) for “land transaction return” substitute “return
under section 76 (general requirement to make land transaction
return), subject to the adaptation that references to the effective date
45
of the transaction shall be read as references to the date of the event
as a result of which the return is required”; and

Finance Bill
Schedule 37 — Stamp duty land tax and stamp duty
Part 2 — Re-enactment, with changes, of amendments made by section 109 regulations
538

(b)
after subsection (4) add—
“(5)
This section does not apply so far as the consideration
consists of rent (see paragraph 8 of Schedule 17A).”.
      (5)
In section 87 (interest on unpaid tax), in subsection (3) (meaning of “the
relevant date”), after paragraph (aa) (inserted by paragraph 19(3) above)
5
insert—
“(ab)
in the case of an amount payable under paragraph 3(3) or 4(3)
of Schedule 17A (leases that continue after a fixed term and
treatment of leases for an indefinite term), the day on which
the lease becomes treated as being for a longer fixed term;”.
10
      (6)
In section 90 (application to defer payment in case of contingent or uncertain
consideration), after subsection (6) add—
“(7)
This section does not apply so far as the consideration consists of
rent.”.
      (7)
In the table in section 122 (index of defined expressions), in the second
15
column of the entry for “lease and related expressions” for “section 120”
substitute “Schedule 17A”.
      (8)
In paragraph 7 of Schedule 19 (commencement and transitional provisions:
earlier related transactions under stamp duty), after sub-paragraph (3)
add—
20
     “(4)
For the purposes of paragraph 5 of Schedule 17A (treatment of
successive linked leases) no account shall be taken of any
transaction that is not an SDLT transaction.”.
Abolition of stamp duty: application to duplicates and counterparts
23
In section 125(5) (abolition of stamp duty except on instruments relating to
25
stock or marketable securities: instruments to which the section applies)—
(a)
in paragraph (a), after “instrument effecting a land transaction”,
(b)
in paragraph (b), after “instrument effecting a transaction other than
a land transaction”, and
(c)
in the second sentence, after “instrument effecting both a land
30
transaction and a transaction other than a land transaction”,

insert “(or any duplicate or counterpart of such an instrument)”.
Application of transitional provisions to certain contracts
24
In Schedule 19 (commencement and transitional provisions), after
paragraph 4 (contracts entered into before the implementation date) insert—
35
“Contracts substantially performed after implementation date
4A
Where—
(a)
a transaction is effected in pursuance of a contract entered
into before the first relevant date,
(b)
the contract is substantially performed, without having
40
been completed, after the implementation date, and
(c)
there is subsequently an event within paragraph 3(3) by
virtue of which the transaction is an SDLT transaction,

Finance Bill
Schedule 37 — Stamp duty land tax and stamp duty
Part 2 — Re-enactment, with changes, of amendments made by section 109 regulations
539


the effective date of the transaction shall be taken to be the date of
the event referred to in paragraph (c) (and not the date of
substantial performance).
Application of provisions in case of transfer of rights
4B    (1)
This paragraph applies where section 44 (contract and
5
conveyance) has effect in accordance with section 45 (effect of
transfer of rights).
      (2)
Any reference in paragraph 3, 4 or 4A to the date when a contract
was entered into (or made) shall be read, in relation to a contract
deemed to exist by virtue of section 45(3) (deemed secondary
10
contract with transferee), as a reference to the date of the
assignment, subsale or other transaction in question.”.
Stamping of contract or agreement where transaction on completion or grant of lease subject to
stamp duty land tax
25    (1)
In Schedule 19 (commencement and transitional provisions), after
15
paragraph 7 (earlier related transactions under stamp duty) insert—
“Stamping of contract where transaction on completion subject to stamp duty land
tax
7A    (1)
This paragraph applies where—
(a)
a contract that apart from paragraph 7 of Schedule 13 to the
20
Finance Act 1999 (contracts chargeable as conveyances on
sale) would not be chargeable with stamp duty is entered
into before the implementation date,
(b)
a conveyance made in conformity with the contract is
effected on or after the implementation date, and
25
(c)
the transaction effected on completion is an SDLT
transaction or would be but for an exemption or relief from
stamp duty land tax.
      (2)
If in those circumstances the contract is presented for stamping
together with a Revenue certificate as to compliance with the
30
provisions of this Part of this Act in relation to the transaction
effected on completion—
(a)
the payment of stamp duty land tax on that transaction or,
as the case may be, the fact that no such tax was payable
shall be denoted on the contract by a particular stamp, and
35
(b)
the contract shall be deemed thereupon to be duly
stamped.
      (3)
In this paragraph “conveyance” includes any instrument.”.
      (2)
In paragraph 8 of Schedule 19 (time for stamping agreement for lease: lease
subject to stamp duty land tax)—
40
(a)
for the heading substitute “Stamping of agreement for lease where
grant of lease subject to stamp duty land tax”, and
(b)
in sub-paragraph (1) for the opening words substitute “This
paragraph applies where—”.

Finance Bill
Schedule 38 — Stamp duty land tax: claims not included in returns
540

      (3)
For sub-paragraph (2) of that paragraph substitute—
     “(2)
If in those circumstances the agreement is presented for stamping
together with a Revenue certificate as to compliance with the
provisions of this Part of this Act in relation to the grant of the
lease—
5
(a)
the payment of stamp duty land tax in respect of the grant
of the lease or, as the case may be, the fact that no such tax
was payable shall be denoted on the agreement by a
particular stamp, and
(b)
the agreement shall be deemed thereupon to be duly
10
stamped.”.
      (4)
In section 122 (index of defined expressions), at the appropriate place
insert—

“Revenue certificate
section 79(3)(a)”.

Commencement
15
26
This Part of this Schedule 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.
Schedule 38
Section 284

Stamp duty land tax: claims not included in returns
20

The following is the Schedule inserted after Schedule 11 to the Finance Act
2003 —
“Schedule 11A
Section 82A

Stamp duty land tax: claims not included in returns
Introductory
25
1
This Schedule applies to a claim under any provision of this Part
other than a claim that is required to be made in, or by amendment
to, a return under this Part.

References in this Schedule to a claim shall be read accordingly.
Making of claims
30
2     (1)
A claim must be made in such form as the Inland Revenue may
determine.
      (2)
The form of claim must provide for a declaration to the effect that
all the particulars given in the form are correctly stated to the best
of the claimant’s information and belief.
35
      (3)
The form of claim may require—
(a)
a statement of the amount of tax that will be required to be
discharged or repaid in order to give effect to the claim;

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Schedule 38 — Stamp duty land tax: claims not included in returns
541

(b)
such information as is reasonably required for the purpose
of determining whether and, if so, the extent to which the
claim is correct;
(c)
the delivery with the claim of such statements and
documents, relating to the information contained in the
5
claim, as are reasonably required for the purpose
mentioned in paragraph (b).
      (4)
A claim for repayment of tax may not be made unless the claimant
has documentary evidence that the tax has been paid.
Duty to keep and preserve records
10
3     (1)
A person who may wish to make a claim must—
(a)
keep such records as may be needed to enable him to make
a correct and complete claim, and
(b)
preserve those records in accordance with this paragraph.
      (2)
The records must be preserved until the latest of the following
15
times—
(a)
the end of the period of twelve months beginning with day
on which the claim was made;
(b)
where there is an enquiry into the claim, or into an
amendment of the claim, the time when the enquiry is
20
completed;
(c)
where the claim is amended and there is there is no
enquiry into the amendment, the time when the Inland
Revenue no longer have power to enquire into the
amendment.
25
      (3)
The duty under this paragraph to preserve records may be
satisfied by the preservation of the information contained in them.
      (4)
Where information is so preserved a copy of any document
forming part of the records is admissible in evidence in any
proceedings before the Commissioners to the same extent as the
30
records themselves.
      (5)
A person who fails to comply with this paragraph in relation to a
claim that he makes is liable to a penalty not exceeding £3,000,
subject to the following exception.
      (6)
No penalty is incurred if the Inland Revenue are satisfied that any
35
facts that they reasonably require to be proved, and that would
have been proved by the records, are proved by other
documentary evidence provided to them.
Amendment of claim by claimant
4     (1)
The claimant may amend his claim by notice to the Inland
40
Revenue.
      (2)
No such amendment may be made—
(a)
more than twelve months after the day on which the claim
was made, or
(b)
if the Inland Revenue give notice under paragraph 7
45
(notice of enquiry), during the period—

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Schedule 38 — Stamp duty land tax: claims not included in returns
542

(i)
beginning with the day on which notice is given,
and
(ii)
ending with the day on which the enquiry under
that paragraph is completed.
Correction of claim by Revenue
5
5     (1)
The Inland Revenue may by notice to the claimant amend a claim
so as to correct obvious errors or omissions in the claim (whether
errors of principle, arithmetical mistakes or otherwise).
      (2)
No such correction may be made—
(a)
more than nine months after the day on which the claim
10
was made, or
(b)
if the Inland Revenue give notice under paragraph 7
(notice of enquiry), during the period—
(i)
beginning with the day on which notice is given,
and
15
(ii)
ending with the day on which the enquiry under
that paragraph is completed.
      (3)
A correction under this paragraph is of no effect if, within three
months from the date of issue of the notice of correction, the
claimant gives notice rejecting the correction.
20
      (4)
Notice under sub-paragraph (3) must be given to the officer of the
Board by whom the notice of correction was given.
Giving effect to claims and amendments
6     (1)
As soon as practicable after a claim is made, or is amended under
paragraph 4 or 5, the Inland Revenue shall give effect to the claim
25
or amendment by discharge or repayment of tax.
      (2)
Where the Inland Revenue enquire into a claim or amendment—
(a)
sub-paragraph (1) does not apply until a closure notice is
given under paragraph 11 (completion of enquiry), and
then it applies subject to paragraph 13 (giving effect to
30
amendments under paragraph 11), but
(b)
the Inland Revenue may at any time before then give effect
to the claim or amendment, on a provisional basis, to such
extent as they think fit.
Notice of enquiry
35
7     (1)
The Inland Revenue may enquire into a person’s claim or
amendment of a claim if they give him notice of their intention to
do so (“notice of enquiry”) before the end of the period of nine
months after the day on which the claim or amendment was made.
      (2)
A claim or amendment that has been the subject of one notice of
40
enquiry may not be the subject of another.
Notice to produce documents etc for purposes of enquiry
8     (1)
If the Inland Revenue give a person a notice of enquiry, they may
by notice in writing require him—

Finance Bill
Schedule 38 — Stamp duty land tax: claims not included in returns
543

(a)
to produce to them such documents in his possession or
power, and
(b)
to provide them with such information, in such form,

as they may reasonably require for the purposes of the enquiry.
      (2)
A notice given to a person under this paragraph (which may be
5
given at the same time as the notice of enquiry) must specify the
time (which must not be less than 30 days) within which he is to
comply with it.
      (3)
In complying with a notice under this paragraph copies of
documents may be produced instead of originals, but—
10
(a)
the copies must be photographic or other facsimiles, and
(b)
the Inland Revenue may by notice require the original to
be produced for inspection.

A notice under paragraph (b) must specify the time (which must
not be less than 30 days) within which the person is to comply
15
with it.
      (4)
The Inland Revenue may take copies of, or make extracts from,
any documents produced to them under this paragraph.
      (5)
A notice under this paragraph does not oblige a person to produce
documents or provide information relating to the conduct of any
20
pending appeal by him.
Appeal against notice to produce documents etc
9     (1)
An appeal may be brought against a requirement imposed by a
notice under paragraph 8 to produce documents or provide
information.
25
      (2)
Notice of appeal must be given—
(a)
in writing,
(b)
within 30 days after the issue of the notice appealed
against,
(c)
to the officer of the Board by whom that notice was given.
30
      (3)
An appeal under this paragraph shall be heard and determined in
the same way as an appeal against an assessment.
      (4)
On an appeal under this paragraph the Commissioners—
(a)
shall set aside the notice so far as it requires the production
of documents, or the provision of information, that
35
appears to them not reasonably required for the purposes
of the enquiry, and
(b)
shall confirm the notice so far as it requires the production
of documents, or the provision of information, that
appears to them reasonably required for the purposes of
40
the enquiry.
      (5)
A notice that is confirmed by the Commissioners (or so far as it is
confirmed) has effect as if the period specified in it for complying
was 30 days from the determination of the appeal.
      (6)
The decision of the Commissioners on an appeal under this
45
paragraph is final.