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Finance Bill
Schedule 37 — Stamp duty land tax and stamp duty
Part 1 — Amendments to Part 4 of the Finance Act 2003: general

539

 

           

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

executed—

(a)   

the notional lease is treated as if it were surrendered at that

5

time, and

(b)   

the lease itself is treated for the purposes of paragraph 9 as

if it were granted in consideration of that surrender.

      (5)  

References in sub-paragraphs (2) to (4) to the execution of a lease

are to the execution of a lease that either—

10

(a)   

is in conformity with the missives of let, or

(b)   

relates to substantially the same property and period as the

missives of let.

      (6)  

Where sub-paragraph (3) applies and the agreement is (to any

extent) afterwards rescinded or annulled, or is for any other

15

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.”.

Transfer of rights after 10th July 2003 relating to earlier contract: applicability of SDLT regime

20

12         

In Schedule 19 (commencement and transitional provisions), in paragraph 3

(contract entered into before first relevant date), for paragraph (c) of sub-

paragraph (3) substitute—

“(c)   

if on or after that date there is an assignment, subsale or

other transaction (relating to the whole or part of the

25

subject-matter of the contract) as a result of which a person

other than the purchaser under the contract becomes

entitled to call for a conveyance to him.”.

Commencement

13    (1)  

Paragraph 4, and paragraphs 7 and 8 so far as relating to the section 44A

30

inserted by that paragraph, apply in relation to any contract entered into

after 17th March 2004.

      (2)  

Paragraph 5, and paragraphs 7 and 8 so far as relating to the section 45A

inserted by that paragraph, apply in relation to any transfer of rights

occurring after that date.

35

      (3)  

Subject to sub-paragraphs (4) and (5), the amendments made by the other

provisions of this Part of this Schedule apply in relation to any transaction

of which the effective date is after 17th March 2004.

      (4)  

Paragraph 12 does not apply in relation to a contract that was substantially

performed before 17th March 2004.

40

      (5)  

Paragraphs 6 and 11 (which contain amendments the effect of which is

reproduced in Part 2 of this Schedule) do not apply in relation to any

transaction of which the effective date is on or after the day on which this Act

is passed.

      (6)  

In this paragraph—

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

540

 

“effective date” and “substantially performed” have the same

meaning as in Part 4 of the Finance Act 2003 (as amended by this

Part of this Schedule);

“transfer of rights” has the same meaning as in section 45 of that Act

or, as the case may require, section 45A of that Act (inserted by

5

paragraph 5(5)).

Part 2

Re-enactment, with changes, of amendments made by section 109 regulations

Introduction and revocation

14    (1)  

This Part of this Schedule contains amendments to Parts 4 and 5 of the

10

Finance Act 2003 (c. 14) (stamp duty land tax and stamp duty)

corresponding, subject to certain changes, to those made by the Stamp Duty

and Stamp Duty Land Tax (Variation of the Finance Act 2003) (No. 2)

Regulations 2003 (S.I. 2003/2816) (made under section 109 of that Act).

      (2)  

Those regulations are revoked.

15

Meaning of taking possession

15    (1)  

Section 44 (contract and conveyance) is amended as follows.

      (2)  

In subsection (5)(a) (meaning of “substantial performance”: purchaser

taking possession), after “the purchaser” insert “, or a person connected with

the purchaser,”.

20

      (3)  

In subsection (6) (meaning of taking possession)—

(a)   

for paragraph (a) substitute—

“(a)   

possession includes receipt of rents and profits or the

right to receive them, and”; and

(b)   

in paragraph (b), for “the purchaser takes possession” substitute

25

“possession is taken”.

      (4)  

After subsection (10) add—

“(11)   

Section 839 of the Taxes Act 1988 (connected persons) has effect for

the purposes of this section.”.

Relief for sale and leaseback arrangements

30

16         

After section 57 (disadvantaged areas relief) insert—

“57A    

Sale and leaseback arrangements

(1)   

The leaseback element of a sale and leaseback arrangement is exempt

from charge if the qualifying conditions specified below are met.

(2)   

A “sale and leaseback” arrangement means an arrangement under

35

which—

(a)   

A transfers or grants to B a major interest in land (the “sale”),

and

(b)   

out of that interest B grants a lease to A (the “leaseback”).

(3)   

The qualifying conditions are—

40

 

 

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

541

 

(a)   

that the sale transaction is entered into wholly or partly in

consideration of the leaseback transaction being entered into,

(b)   

that the only other consideration (if any) for the sale is the

payment of money or the assumption, satisfaction or release

of a debt (or both),

5

(c)   

that the sale is not a transfer of rights within the meaning of

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

(d)   

where A and B are both bodies corporate at the effective date

10

of the leaseback transaction, that they are not members of the

same group for the purposes of group relief (see paragraph 1

of Schedule 7) at that date.

(4)   

In this section—

   

“debt” means an obligation, whether certain or contingent, to

15

pay a sum of money either immediately or at a future date;

and

   

“money” means money in sterling or another currency.”.

Relief for certain acquisitions of residential property

17    (1)  

For sections 58 and 59 (relief for certain exchanges of residential property

20

and relocation relief) substitute—

“58A    

Relief for certain acquisitions of residential property

Schedule 6A provides for relief in the case of certain acquisitions of

residential property.”.

      (2)  

After Schedule 6 insert—

25

“Schedule 6A

Section 58A

 

Relief for certain acquisitions of residential property

Acquisition by house-building company from individual acquiring new dwelling

1     (1)  

Where a dwelling (“the old dwelling”) is acquired by a house-

building company from an individual (whether alone or with

30

other individuals), the acquisition is exempt from charge if the

following conditions are met.

      (2)  

The conditions are—

(a)   

that the individual (whether alone or with other

individuals) acquires from the house-building company a

35

new dwelling,

(b)   

that the individual—

(i)   

occupied the old dwelling as his only or main

residence at some time in the period of two years

ending with the date of its acquisition, and

40

(ii)   

intends to occupy the new dwelling as his only or

main residence,

(c)   

that each acquisition is entered into in consideration of the

other, 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

542

 

(d)   

that the area of land acquired by the house-building

company does not exceed the permitted area.

      (3)  

Where the conditions in sub-paragraph (2)(a) to (c) are met but the

area of land acquired by the house-building company exceeds the

permitted area, the chargeable consideration for the acquisition is

5

taken to be the amount calculated by deducting the market value

of the permitted area from the market value of the old dwelling.

      (4)  

A “house-building company” means a company that carries on the

business of constructing or adapting buildings or parts of

buildings for use as dwellings.

10

           

References in this paragraph to such a company include any

company connected with it.

      (5)  

In this paragraph—

(a)   

references to the acquisition of the new dwelling are to the

acquisition, by way of grant or transfer, of a major interest

15

in the dwelling;

(b)   

references to the acquisition of the old dwelling are to the

acquisition, by way of transfer, of a major interest in the

dwelling; and

(c)   

references to the market value of the old dwelling and of

20

the permitted area are, respectively, to the market value of

that major interest in the dwelling and of that interest so far

as it relates to that area.

Acquisition by property trader from individual acquiring new dwelling

2     (1)  

Where a dwelling (“the old dwelling”) is acquired by a property

25

trader from an individual (whether alone or with other

individuals), the acquisition is exempt from charge if the

following conditions are met.

      (2)  

The conditions are—

(a)   

that the acquisition is made in the course of a business that

30

consists of or includes acquiring dwellings from

individuals who acquire new dwellings from house-

building companies,

(b)   

that the individual (whether alone or with other

individuals) acquires a new dwelling from a house-

35

building company,

(c)   

that the individual—

(i)   

occupied the old dwelling as his only or main

residence at some time in the period of two years

ending with the date of its acquisition, and

40

(ii)   

intends to occupy the new dwelling as his only or

main residence,

(d)   

that the property trader does not intend—

(i)   

to spend more than the permitted amount on

refurbishment of the old dwelling, or

45

(ii)   

to grant a lease or licence of the old dwelling, or

(iii)   

to permit any of its principals or employees (or any

person connected with any of its principals or

employees) to occupy the old dwelling, 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

543

 

(e)   

that the area of land acquired by the property trader does

not exceed the permitted area.

           

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

the individual for a period of no more than six months.

      (3)  

Where the conditions in sub-paragraph (2)(a) to (d) are met, but

5

the area of land acquired by the property trader exceeds the

permitted area, the chargeable consideration for the acquisition is

taken to be the amount calculated by deducting the market value

of the permitted area from the market value of the old dwelling.

      (4)  

The provisions of paragraph 1(4) (meaning of “house-building

10

company” etc) also have effect for the purposes of this paragraph.

      (5)  

In this paragraph—

(a)   

references to the acquisition of a new dwelling are to the

acquisition, by way of grant or transfer, of a major interest

in the dwelling;

15

(b)   

references to the acquisition of the old dwelling are to the

acquisition, by way of transfer, of a major interest in the

dwelling; and

(c)   

references to the market value of the old dwelling and of

the permitted area are, respectively, to the market value of

20

that major interest in the dwelling and of that interest so far

as it relates to that area.

Acquisition by property trader from personal representatives

3     (1)  

Where a dwelling is acquired by a property trader from the

personal representatives of a deceased individual, the acquisition

25

is exempt from charge if the following conditions are met.

      (2)  

The conditions are—

(a)   

that the acquisition is made in the course of a business that

consists of or includes acquiring dwellings from personal

representatives of deceased individuals,

30

(b)   

that the deceased individual occupied the dwelling as his

only or main residence at some time in the period of two

years ending with the date of his death,

(c)   

that the property trader does not intend—

(i)   

to spend more than the permitted amount on

35

refurbishment of the dwelling, or

(ii)   

to grant a lease or licence of the dwelling, or

(iii)   

to permit any of its principals or employees (or any

person connected with any of its principals or

employees) to occupy the dwelling, and

40

(d)   

that the area of land acquired does not exceed the

permitted area.

      (3)  

Where the conditions in sub-paragraph (2)(a) to (c) are met, but the

area of land acquired exceeds the permitted area, the chargeable

consideration for the acquisition is taken to be the amount

45

calculated by deducting the market value of the permitted area

from the market value of the dwelling.

      (4)  

In this paragraph—

 

 

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

544

 

(a)   

references to the acquisition of the dwelling are to the

acquisition, by way of transfer, of a major interest in the

dwelling; and

(b)   

references to the market value of the dwelling and of the

permitted area are, respectively, to the market value of that

5

major interest in the dwelling and of that interest so far as

it relates to that area.

Acquisition by property trader from individual where chain of transactions breaks

down

4     (1)  

Where a dwelling (“the old dwelling”) is acquired by a property

10

trader from an individual (whether alone or with other

individuals), the acquisition is exempt from charge if—

(a)   

the individual has made arrangements to sell a dwelling

(“the old dwelling”) and acquire another dwelling (“the

second dwelling”),

15

(b)   

the arrangements to sell the old dwelling fail, and

(c)   

the acquisition of the old dwelling is made for the purpose

of enabling the individual’s acquisition of the second

dwelling to proceed,

           

and the following conditions are met.

20

      (2)  

The conditions are—

(a)   

that the acquisition is made in the course of a business that

consists of or includes acquiring dwellings from

individuals in those circumstances,

(b)   

that the individual—

25

(i)   

occupied the old dwelling as his only or main

residence at some time in the period of two years

ending with the date of its acquisition, and

(ii)   

intends to occupy the second dwelling as his only

or main residence,

30

(c)   

that the property trader does not intend—

(i)   

to spend more than the permitted amount on

refurbishment of the old dwelling, or

(ii)   

to grant a lease or licence of the old dwelling, or

(iii)   

to permit any of its principals or employees (or any

35

person connected with any of its principals or

employees) to occupy the old dwelling, and

(d)   

that the area of land acquired does not exceed the

permitted area.

           

Paragraph (c)(ii) does not apply to the grant of a lease or licence to

40

the individual for a period of no more than six months.

      (3)  

Where the conditions in sub-paragraph (2)(a) to (c) are met, but the

area of land acquired exceeds the permitted area, the chargeable

consideration for the acquisition is taken to be the amount

calculated by deducting the market value of the permitted area

45

from the market value of the old dwelling.

      (4)  

In this paragraph—

 

 

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

545

 

(a)   

references to the acquisition of the second dwelling are to

the acquisition, by way of grant or transfer, of a major

interest in the dwelling;

(b)   

references to the acquisition of the old dwelling are to the

acquisition, by way of transfer, of a major interest in the

5

dwelling; and

(c)   

references to the market value of the old dwelling and of

the permitted area are, respectively, to the market value of

that major interest in the dwelling and of that interest so far

as it relates to that area.

10

Acquisition by employer in case of relocation of employment

5     (1)  

Where a dwelling is acquired from an individual (whether alone

or with other individuals) by his employer, the acquisition is

exempt from charge if the following conditions are met.

      (2)  

The conditions are—

15

(a)   

that the individual occupied the dwelling as his only or

main residence at some time in the period of two years

ending with the date of the acquisition,

(b)   

that the acquisition is made in connection with a change of

residence by the individual resulting from relocation of

20

employment,

(c)   

that the consideration for the acquisition does not exceed

the market value of the dwelling, and

(d)   

that the area of land acquired does not exceed the

permitted area.

25

      (3)  

Where the conditions in sub-paragraph (2)(a) to (c) are met but the

area of land acquired exceeds the permitted area, the chargeable

consideration for the acquisition is taken to be the amount

calculated by deducting the market value of the permitted area

from the market value of the dwelling.

30

      (4)  

In this paragraph “relocation of employment” means a change of

the individual’s place of employment due to—

(a)   

his becoming an employee of the employer,

(b)   

an alteration of the duties of his employment with the

employer, or

35

(c)   

an alteration of the place where he normally performs

those duties.

      (5)  

For the purposes of this paragraph a change of residence is one

“resulting from” relocation of employment if—

(a)   

the change is made wholly or mainly to allow the

40

individual to have his residence within a reasonable daily

travelling distance of his new place of employment, and

(b)   

his former residence is not within a reasonable daily

travelling distance of that place.

           

The individual’s “new place of employment” means the place

45

where he normally performs, or is normally to perform, the duties

of his employment after the relocation.

      (6)  

In this paragraph—

 

 

 
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