|
| |
|
| |
3 | In section 44 (contract and conveyance), after subsection (9) insert— |
| |
| |
(a) | paragraph 12A of Schedule 17A applies (agreement for |
| |
| 5 |
(b) | paragraph 19(3) to (6) of Schedule 17A applies (missives of let |
| |
| |
| it applies in place of subsections (4), (8) and (9).”. |
| |
Contract providing for conveyance to third party |
| |
4 (1) | After section 44 insert— |
| 10 |
“44A | Contract providing for conveyance to third party |
| |
(1) | This section applies where a contract is entered into under which a |
| |
chargeable interest is to be conveyed by one party to the contract (A) |
| |
at the direction or request of the other (B)— |
| |
(a) | to a person (C) who is not a party to the contract, or |
| 15 |
(b) | either to such a person or to B. |
| |
(2) | B is not regarded as entering into a land transaction by reason of |
| |
entering into the contract, but the following provisions have effect. |
| |
(3) | If the contract is substantially performed B is treated for the purposes |
| |
of this Part as acquiring a chargeable interest, and accordingly as |
| 20 |
entering into a land transaction. |
| |
| The effective date of the transaction is when the contract is |
| |
| |
(4) | Where the contract is (to any extent) afterwards rescinded or |
| |
annulled, or is for any other reason not carried into effect, the tax |
| 25 |
paid by virtue of subsection (3) shall (to that extent) be repaid by the |
| |
| |
| Repayment must be claimed by amendment of the land transaction |
| |
return made in respect of the contract. |
| |
(5) | Subject to subsection (6), section 44 (contract and conveyance) does |
| 30 |
not apply (except so far as it defines “substantial performance”) in |
| |
relation to the contract. |
| |
| |
(a) | this section applies by virtue of subsection (1)(b), and |
| |
(b) | by reason of B’s direction or request, A becomes obliged to |
| 35 |
convey a chargeable interest to B, |
| |
| section 44 applies to that obligation as it applies to a contract for a |
| |
land transaction that is to be completed by a conveyance. |
| |
(7) | Section 44 applies in relation to any contract between B and C, in |
| |
respect of the chargeable interest referred to in subsection (1) above, |
| 40 |
that is to be completed by a conveyance. |
| |
| References to completion in that section, as it so applies, include |
| |
references to conveyance by A to C of the subject matter of the |
| |
contract between B and C. |
| |
|
| |
|
| |
|
(8) | In this section “contract” includes any agreement and “conveyance” |
| |
includes any instrument.”. |
| |
(2) | In section 48 (chargeable interests), after subsection (6) insert— |
| |
“(7) | This section has effect subject to subsection (3) of section 44A |
| |
(contract and conveyance to third party).”. |
| 5 |
(3) | In section 77 (notifiable transactions), after subsection (4) insert— |
| |
“(5) | A land transaction that a person is treated as entering into by virtue |
| |
of subsection (3) of section 44A (contract and conveyance to third |
| |
| |
Contract and conveyance: effect of transfer of rights |
| 10 |
5 (1) | Section 45 (contract and conveyance: effect of transfer of rights) is amended |
| |
| |
| |
(a) | after paragraph (b) insert “, and |
| |
(c) | paragraph 12B of Schedule 17A (assignment of |
| 15 |
agreement for lease) does not apply.”; |
| |
(b) | at the end insert “, and references to the transferor and the transferee |
| |
shall be read accordingly”. |
| |
(3) | For subsection (5) substitute— |
| |
“(5) | Where a transfer of rights relates to part only of the subject-matter of |
| 20 |
the original contract (“the relevant part”)— |
| |
(a) | subsection (8)(b) of section 44 (restriction of charge to tax on |
| |
subsequent conveyance) has effect as if the reference to the |
| |
amount of tax chargeable on that contract were a reference to |
| |
an appropriate proportion of that amount, and |
| 25 |
(b) | a reference in the second sentence of subsection (3) above to |
| |
the original contract, or a reference in subsection (4) above to |
| |
the secondary contract arising from an earlier transfer of |
| |
rights, is to that contract so far as relating to the relevant part |
| |
(and that contract so far as not relating to the relevant part |
| 30 |
shall be treated as a separate contract).”. |
| |
(4) | After that subsection insert— |
| |
“(5A) | In relation to a land transaction treated as taking place by virtue of |
| |
| |
(a) | references in Schedule 7 (group relief) to the vendor shall be |
| 35 |
read as references to the vendor under the original contract; |
| |
(b) | other references in this Part to the vendor shall be read, |
| |
where the context permits, as referring to either the vendor |
| |
under the original contract or the transferor.”. |
| |
(5) | After section 45 insert— |
| 40 |
“45A | Contract providing for conveyance to third party: effect of transfer of |
| |
| |
(1) | This section applies where— |
| |
|
| |
|
| |
|
(a) | a contract (“the original contract”) is entered into under |
| |
which a chargeable interest is to be conveyed by one party to |
| |
the contract (A) at the direction or request of the other (B)— |
| |
(i) | to a person (C) who is not a party to the contract, or |
| |
(ii) | either to such a person or to B, |
| 5 |
| |
(b) | there is an assignment or other transaction (relating to the |
| |
whole or part of the subject-matter of the original contract) as |
| |
a result of which a person (D) becomes entitled to exercise |
| |
any of B’s rights under the original contract in place of B. |
| 10 |
| References in the following provisions of this section to a transfer of |
| |
rights are to any such assignment or other transaction. |
| |
(2) | D is not regarded as entering into a land transaction by reason of the |
| |
transfer of rights, but section 44A (contract providing for conveyance |
| |
to third party) has effect in accordance with the following provisions |
| 15 |
| |
(3) | That section applies as if— |
| |
(a) | D had entered into a contract (a “secondary contract”) in the |
| |
same terms as the original contract except with D as a party |
| |
| 20 |
(b) | the consideration due from D under the secondary contract |
| |
| |
(i) | so much of the consideration under the original |
| |
contract as is referable to the subject-matter of the |
| |
transfer of rights and is to be given (directly or |
| 25 |
indirectly) by D or a person connected with him, and |
| |
(ii) | the consideration given for the transfer of rights. |
| |
(4) | The substantial performance of the original contract shall be |
| |
| |
(a) | it occurs at the same time as, and in connection with, the |
| 30 |
substantial performance of the secondary contract, or |
| |
(b) | it occurs after the transfer of rights. |
| |
(5) | Where there are successive transfers of rights, subsection (3) has |
| |
effect in relation to each of them. |
| |
(6) | The substantial performance of the secondary contract arising from |
| 35 |
an earlier transfer of rights shall be disregarded if— |
| |
(a) | it occurs at the same time as, and in connection with, the |
| |
substantial performance of the secondary contract arising |
| |
from a subsequent transfer of rights, or |
| |
(b) | it occurs after that subsequent transfer. |
| 40 |
(7) | Where a transfer of rights relates to only part of the subject matter of |
| |
the original contract, or to only some of the rights under that |
| |
| |
(a) | a reference in subsection (3)(a) or (4) to the original contract, |
| |
or a reference in subsection (6) to the secondary contract |
| 45 |
arising from an earlier transfer, is to that contract so far as |
| |
relating to that part or those rights, and |
| |
(b) | that contract so far as not relating to that part or those rights |
| |
shall be treated as a separate contract. |
| |
|
| |
|
| |
|
(8) | The effective date of a land transaction treated as entered into by |
| |
virtue of subsection (3) is not earlier than the date of the transfer of |
| |
| |
(9) | In relation to a such a transaction— |
| |
(a) | references in Schedule 7 (group relief) to the vendor shall be |
| 5 |
| |
(b) | other references in this Part to the vendor shall be read, |
| |
where the context permits, as referring to either A or B. |
| |
(10) | Section 839 of the Taxes Act 1988 (connected persons) applies for the |
| |
purposes of subsection (3)(b). |
| 10 |
(11) | In this section “contract” includes any agreement.”. |
| |
(6) | In section 122 (index of defined expressions), in the entry for “vendor” insert |
| |
at the end “(see too sections 45(5A) and 45A(9))”. |
| |
Relief for sale and leaseback arrangements |
| |
6 (1) | Section 57A (sale and leaseback arrangements) (inserted by the Stamp Duty |
| 15 |
and Stamp Duty Land Tax (Variation of the Finance Act 2003) (No. 2) |
| |
Regulations 2003 (S.I. 2003/2816)) is amended as follows. |
| |
(2) | In subsection (3) (the qualifying conditions), for paragraph (b) substitute— |
| |
“(aa) | that the sale transaction is entered into wholly or partly in |
| |
consideration of the leaseback transaction being entered into, |
| 20 |
(b) | that the only other consideration (if any) for the sale is the |
| |
payment of money or the assumption, satisfaction or release |
| |
| |
(3) | After paragraph (c) of that subsection insert— |
| |
“(d) | that the sale is not a transfer of rights within the meaning of |
| 25 |
section 45 (contract and conveyance: effect of transfer of |
| |
rights) or 45A (contract providing for conveyance to third |
| |
party: effect of transfer of rights), and |
| |
(e) | where A and B are both bodies corporate at the effective date |
| |
of the leaseback transaction, that they are not members of the |
| 30 |
same group for the purposes of group relief (see paragraph 1 |
| |
of Schedule 7) at that date.”. |
| |
(4) | Omit subsection (4) (chargeable consideration for sale taken to be not less |
| |
| |
Registration of land transactions |
| 35 |
7 | In section 79 (registration of land transactions etc), in subsection (2) |
| |
(transactions to which section does not apply), for the words from “other |
| |
than” to the end of paragraph (b) substitute “other than a transaction treated |
| |
| |
(a) | under subsection (4) of section 44 (contract and conveyance) |
| 40 |
or under that section as it applies by virtue of section 45 |
| |
(contract and conveyance: effect of transfer of rights), or |
| |
(b) | under subsection (3) of section 44A (contract providing for |
| |
conveyance to third party) or under that section as it applies |
| |
by virtue of section 45A (contract providing for conveyance |
| 45 |
to third party: effect of transfer of rights).”. |
| |
|
| |
|
| |
|
“Effective date” of a transaction |
| |
8 | In section 119 (meaning of “effective date” of a transaction), in subsection (2) |
| |
(cases where effective date is not date of completion)— |
| |
(a) | after the entry for section 44(4) insert— |
| |
| “section 44A(3) (contract providing for conveyance to |
| 5 |
| |
| section 45A(8) (contract providing for conveyance to |
| |
third party: effect of transfer of rights),”; |
| |
| |
| “paragraph 12A(2) of Schedule 17A (agreement for lease |
| 10 |
followed by substantial performance), |
| |
| paragraph 12B(3) of that Schedule (assignment of |
| |
agreement for lease occurring after agreement |
| |
substantially performed), and |
| |
| paragraph 19(3) of that Schedule (missives of let etc in |
| 15 |
Scotland followed by substantial performance).”. |
| |
| |
9 (1) | Schedule 4 (chargeable consideration) is amended as follows. |
| |
(2) | In paragraph 10 (carrying out of works), after sub-paragraph (2) insert— |
| |
“(2A) | Where subsection (8) of section 44 (contract and conveyance) |
| 20 |
applies, so that there are two notifiable transactions (the first being |
| |
the contract and the second being the transaction effected on |
| |
completion), the condition in sub-paragraph (2)(a) is treated as |
| |
met in relation to the second transaction if it is met in relation to |
| |
| 25 |
(3) | In paragraph 17 (arrangements involving public or educational bodies) |
| |
(inserted by the Stamp Duty Land Tax (Amendment of Schedule 4 to the |
| |
Finance Act 2003) Regulations 2003 (S.I. 2003/3293)), after sub-paragraph (4) |
| |
| |
“(4A) | Sub-paragraphs (3) and (4) shall be disregarded for the purposes |
| 30 |
of determining whether the land transaction in question is |
| |
| |
Provisions relating to leases |
| |
10 | In Schedule 5 (amount of tax chargeable: rent), after paragraph 1 insert— |
| |
“Amounts payable in respect of periods before grant of lease |
| 35 |
1A | For the purposes of this Part “rent” does not include any |
| |
chargeable consideration for the grant of a lease that is payable in |
| |
respect of a period before the grant of the lease.” |
| |
11 (1) | Schedule 17A (further provisions relating to leases) (inserted by the Stamp |
| |
Duty and Stamp Duty Land Tax (Variation of the Finance Act 2003) (No. 2) |
| 40 |
Regulations 2003 (S.I. 2003/2816)) is amended as follows. |
| |
|
| |
|
| |
|
(2) | After paragraph 7 insert— |
| |
“First rent review in final quarter of fifth year |
| |
| |
(a) | a lease contains provision under which the rent may be |
| |
| 5 |
(b) | under that provision the first (or only) such adjustment— |
| |
(i) | is to an amount that (before the adjustment) is |
| |
| |
(ii) | has effect from a date (the “review date”) that is |
| |
expressed as falling five years after a specified date, |
| 10 |
| |
(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 |
| 15 |
term of the lease and ending with the review date. |
| |
| References to the fifth year of the term of the lease shall be read |
| |
| |
(3) | In paragraph 9 (rent for overlap period in case of grant of further lease), in |
| |
sub-paragraph (1), at the end of paragraph (b) insert “, or |
| 20 |
(c) | a person claiming relief against re-entry or forfeiture as |
| |
under-lessee in relation to the original sub-lease (“the old |
| |
lease”) is granted a lease (“the new lease”) in pursuance of |
| |
| |
(4) | After paragraph 12 insert— |
| 25 |
| |
12A (1) | This paragraph applies where in England and Wales or Northern |
| |
| |
(a) | an agreement for a lease is entered into, and |
| |
(b) | the agreement is substantially performed without having |
| 30 |
| |
(2) | The agreement is treated as if it were the grant of a lease in |
| |
accordance with the agreement (“the notional lease”), beginning |
| |
with the date of substantial performance. |
| |
| The effective date of the transaction is that date. |
| 35 |
(3) | Where a lease is subsequently granted in pursuance of the |
| |
| |
(a) | the notional lease is treated as if it were surrendered at that |
| |
| |
(b) | the lease itself is treated for the purposes of paragraph 9 |
| 40 |
(rent for overlap period in case of grant of further lease) as |
| |
if it were granted in consideration of that surrender. |
| |
(4) | Where sub-paragraph (1) applies and the agreement is (to any |
| |
extent) afterwards rescinded or annulled, or is for any other |
| |
reason not carried into effect, the tax paid by virtue of that sub- |
| 45 |
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. |
| |
(5) | In this paragraph “substantially performed” and “completed” |
| |
have the same meanings as in section 44 (contract and |
| |
| 5 |
Assignment of agreement for lease |
| |
12B (1) | This paragraph applies, in place of section 45 (contract and |
| |
conveyance: effect of transfer of rights), where in England and |
| |
Wales or Northern Ireland a person assigns his interest as lessee |
| |
under an agreement for a lease. |
| 10 |
(2) | If the assignment occurs without the agreement having been |
| |
substantially performed, section 44 (contract and conveyance) has |
| |
| |
(a) | the contract were with the assignee and not the assignor, |
| |
| 15 |
(b) | the consideration given by the assignee for entering into |
| |
the contract included any consideration given by him for |
| |
| |
(3) | If the assignment occurs after the agreement has been |
| |
| 20 |
(a) | the assignment is a separate land transaction, and |
| |
(b) | the effective date of that transaction is the date of the |
| |
| |
(4) | Where there are successive assignments, this paragraph has effect |
| |
in relation to each of them.”. |
| 25 |
(5) | In paragraph 16 (surrender of existing lease in return for new lease), at the |
| |
| |
| “Paragraph 5 (exchanges) of Schedule 4 (chargeable |
| |
consideration) does not apply in such a case.”. |
| |
(6) | In paragraph 19 (provisions relating to leases in Scotland), for sub- |
| 30 |
paragraph (2) substitute— |
| |
“(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 |
| 35 |
| |
(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. |
| |
| 40 |
(a) | there are concluded missives of let that do not constitute a |
| |
| |
(b) | the agreement represented by the missives of let is |
| |
substantially performed without a lease having been |
| |
| 45 |
| the missives of let are treated as if they did constitute a lease (“the |
| |
| |
|
| |
|