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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

546

 

(a)   

references to the acquisition of the dwelling are to the

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

dwelling;

(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; and

(c)   

references to an individual’s employer include a

prospective employer.

Acquisition by property trader in case of relocation of employment

10

6     (1)  

Where a dwelling is acquired by a property 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—

15

(a)   

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

consists of or includes acquiring dwellings from

individuals in connection with a change of residence

resulting from relocation of employment,

(b)   

that the individual occupied the dwelling as his only or

20

main residence at some time in the period of two years

ending with the date of the acquisition,

(c)   

that the acquisition is made in connection with a change of

residence by the individual resulting from relocation of

employment,

25

(d)   

that the consideration for the acquisition does not exceed

the market value of the dwelling,

(e)   

that the property trader does not intend—

(i)   

to spend more than the permitted amount on

refurbishment of the dwelling, or

30

(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

(f)   

that the area of land acquired does not exceed the

35

permitted area.

           

Paragraph (e)(ii) does not apply to the grant of a 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 (e) are met but the

area of land acquired exceeds the permitted area, the chargeable

40

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.

      (4)  

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

the individual’s place of employment due to—

45

(a)   

his becoming employed by a new employer,

(b)   

an alteration of the duties of his employment, or

(c)   

an alteration of the place where he normally performs

those duties.

 

 

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

547

 

      (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

individual to have his residence within a reasonable daily

travelling distance of his new place of employment, and

5

(b)   

his former residence is not within a reasonable daily

travelling distance of that place.

           

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

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

of his employment after the relocation.

10

      (6)  

In this paragraph—

(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

15

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.

Meaning of “dwelling”, “new dwelling” and “the permitted area”

7     (1)  

“Dwelling” includes land occupied and enjoyed with the dwelling

20

as its garden or grounds.

      (2)  

A building or part of a building is a “new dwelling” if—

(a)   

it has been constructed for use as a single dwelling and has

not previously been occupied, or

(b)   

it has been adapted for use as a single dwelling and has not

25

been occupied since its adaptation.

      (3)  

“The permitted area”, in relation to a dwelling, means land

occupied and enjoyed with the dwelling as its garden or grounds

that does not exceed—

(a)   

an area (inclusive of the site of the dwelling) of 0.5 of a

30

hectare, or

(b)   

such larger area as is required for the reasonable

enjoyment of the dwelling as a dwelling having regard to

its size and character.

      (4)  

Where sub-paragraph (3)(b) applies, the permitted area is taken to

35

consist of that part of the land that would be the most suitable for

occupation and enjoyment with the dwelling as its garden or

grounds if the rest of the land were separately occupied.

Meaning of “property trader” and “principal”

8     (1)  

A “property trader” means—

40

(a)   

a company,

(b)   

a limited liability partnership, or

(c)   

a partnership whose members are all either companies or

limited liability partnerships,

           

that carries on the business of buying and selling dwellings.

45

      (2)  

In relation to a property trader a “principal” means—

(a)   

in the case of a company, a director;

 

 

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

548

 

(b)   

in the case of a limited liability partnership, a member;

(c)   

in the case of a partnership whose members are all either

companies or limited liability partnerships, a member or a

person who is a principal of a member.

      (3)  

For the purposes of this Schedule—

5

(a)   

anything done by or in relation to a company connected

with a property trader is treated as done by or in relation

to that property trader, and

(b)   

references to the principals or employees of a property

trader include the principals or employees of any such

10

company.

Meaning of “refurbishment” and “the permitted amount”

9     (1)  

“Refurbishment” of a dwelling means the carrying out of works

that enhance or are intended to enhance the value of the dwelling,

but does not include—

15

(a)   

cleaning the dwelling, or

(b)   

works required solely for the purpose of ensuring that the

dwelling meets minimum safety standards.

      (2)  

The “permitted amount”, in relation to the refurbishment of a

dwelling, is—

20

(a)   

£10,000, or

(b)   

5% of the consideration for the acquisition of the dwelling,

           

whichever is the greater, but subject to a maximum of £20,000.

Connected companies etc

10         

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

25

the purposes of this Schedule.

Withdrawal of relief under this Schedule

11    (1)  

Relief under this Schedule is withdrawn in the following

circumstances.

      (2)  

Relief under paragraph 2 (acquisition by property trader from

30

individual acquiring new dwelling) is withdrawn if the property

trader—

(a)   

spends more than the permitted amount on refurbishment

of the old dwelling, or

(b)   

grants a lease or licence of the old dwelling, or

35

(c)   

permits any of its principals or employees (or any person

connected with any of its principals or employees) to

occupy the old dwelling.

           

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

individual for a period of no more than six months.

40

      (3)  

Relief under paragraph 3 (acquisition by property trader from

personal representatives) is withdrawn if the property trader—

(a)   

spends more than the permitted amount on refurbishment

of the dwelling, or

(b)   

grants a lease or licence of the dwelling, or

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

549

 

(c)   

permits any of its principals or employees (or any person

connected with any of its principals or employees) to

occupy the dwelling.

      (4)  

Relief under paragraph 4 (acquisition by property trader from

individual where chain of transactions breaks down) is

5

withdrawn if the property trader—

(a)   

spends more than the permitted amount on refurbishment

of the old dwelling, or

(b)   

grants a lease or licence of the old dwelling, or

(c)   

permits any of its principals or employees (or any person

10

connected with any of its principals or employees) to

occupy the old dwelling.

           

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

individual for a period of no more than six months.

      (5)  

Relief under paragraph 6 (acquisition by property trader in case of

15

relocation of employment) is withdrawn if the property trader—

(a)   

spends more than the permitted amount on refurbishment

of the dwelling, or

(b)   

grants a lease or licence of the dwelling, or

(c)   

permits any of its principals or employees (or any person

20

connected with any of its principals or employees) to

occupy the dwelling.

           

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

25

amount that would have been chargeable in respect of the

acquisition but for the relief.”.

      (3)  

In section 81 (further return where relief withdrawn)—

(a)   

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

paragraph (a) insert—

30

“(za)   

paragraph 11 of Schedule 6A (relief for certain

acquisitions of residential property),”; and

(b)   

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

(a) insert—

“(za)   

in relation to the withdrawal of relief under Schedule

35

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

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

      (4)  

In section 87 (interest on unpaid tax)—

(a)   

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

sub-paragraph (i) insert—

40

“(ia)   

Schedule 6A (relief for certain acquisitions of

residential property),”; and

(b)   

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

(a) insert—

“(za)   

in relation to the withdrawal of relief under Schedule

45

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

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

 

 

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

550

 

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.

5

(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,

10

(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

15

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

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

20

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

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

25

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

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

30

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

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

35

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

the transaction to which it relates shall be read as requiring

40

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.

(3)   

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

45

section 76 in respect of the later 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

551

 

      (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

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

“(aa)   

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

5

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

20         

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

“81B    

Declaration by person authorised to act on behalf of individual

10

(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).

(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

15

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

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

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

20

   

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

25

(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—

30

“(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.”.

35

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.”.

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

552

 

      (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

5

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.

10

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

15

(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—

(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

20

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—

(a)   

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

term and no longer,

25

(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,

(c)   

if the lease continues after the end of the term resulting

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

30

for a fixed term two years longer than the original fixed

term,

           

and so on.

      (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

35

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

40

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,

 

 

 
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