|
| |
|
(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 |
| |
| |
(4) | The provisions of Schedule 10 (returns, enquiries, assessments and |
| 5 |
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 |
| |
day on which the lease becomes treated as being for a longer fixed |
| 10 |
| |
(5) | For the purposes of section 77 (notifiable transactions) a lease to |
| |
which this paragraph applies is a lease for whatever is its fixed |
| |
| |
Treatment of leases for indefinite term |
| 15 |
4 (1) | For the purposes of this Part (except section 77 (notifiable |
| |
| |
(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, |
| |
(b) | if the lease continues after the end of the term resulting |
| 20 |
from the application of paragraph (a), it is treated as if it |
| |
were a lease for a fixed term of two years, |
| |
(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, |
| 25 |
| |
(2) | No account shall be taken for the purposes of this Part of any other |
| |
statutory provision in England and Wales or Northern Ireland |
| |
deeming a lease for an indefinite period to be a lease for a different |
| |
| 30 |
(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 |
| |
that additional tax is payable in respect of a transaction or that tax |
| |
is payable in respect of a transaction where none was payable |
| |
| 35 |
(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 |
| 40 |
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 |
| |
| 45 |
(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 |
| |
day on which the lease becomes treated as being for a longer fixed |
| |
| |
(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 |
(5) | References in this paragraph to a lease for an indefinite period |
| |
| |
(a) | a periodic tenancy or other interest or right terminable by |
| |
| |
(b) | a tenancy at will in England and Wales or Northern |
| 10 |
| |
(c) | any other interest or right terminable by notice at any time. |
| |
Treatment of successive linked leases |
| |
5 (1) | This paragraph applies where— |
| |
(a) | successive leases are granted or treated as granted |
| 15 |
(whether at the same time or at different times) of the same |
| |
or substantially the same premises, and |
| |
(b) | those grants are linked transactions. |
| |
(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 |
| 20 |
| |
(b) | for a term equal to the aggregate of the terms of all the |
| |
| |
(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 |
| 25 |
the purposes of this Part except section 81A (return or further |
| |
return in consequence of later linked transaction). |
| |
| |
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 |
| 30 |
other matters but not apportioned, shall be treated as entirely rent. |
| |
(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. |
| 35 |
Variable or uncertain rent |
| |
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. |
| 40 |
(2) | As regards rent payable in respect of any period before the end of |
| |
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. |
| |
(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 |
| 5 |
the highest amount of rent payable in respect of any consecutive |
| |
twelve month period in the first five years of the term. |
| |
| 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 |
| 10 |
where rent payable ceases to be uncertain). |
| |
(5) | No account shall be taken for the purposes of this Part of any |
| |
provision for rent to be adjusted in line with the retail prices index. |
| |
First rent review in final quarter of fifth year |
| |
| 15 |
(a) | a lease contains provision under which the rent may be |
| |
| |
(b) | under that provision the first (or only) such adjustment— |
| |
(i) | is to an amount that (before the adjustment) is |
| |
| 20 |
(ii) | has effect from a date (the “review date”) that is |
| |
expressed as falling five years after a specified date, |
| |
| |
(c) | the specified date falls within the three months before the |
| |
beginning of the term of the lease, |
| 25 |
| 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 |
| |
term of the lease and ending with the review date. |
| |
| References to the fifth year of the term of the lease shall be read |
| |
| 30 |
Adjustment where rent ceases to be uncertain |
| |
8 (1) | Where the provisions of section 51(1) and (2) (contingent, |
| |
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, |
| 35 |
| |
(b) | the amount of rent payable in respect of the first five years |
| |
of the term of the lease ceases to be uncertain at an earlier |
| |
| |
| the following provisions have effect to require or permit |
| 40 |
reconsideration of how this Part applies to the transaction (and to |
| |
any transaction in relation to which it is a linked transaction). |
| |
(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 |
| 45 |
becomes clear that it will not occur, and |
| |
|
| |
|
| |
|
(b) | in the case of uncertain or unascertained rent, the amount |
| |
| |
(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 |
| 5 |
transaction or that tax is payable where none was payable |
| |
| |
(a) | the purchaser must make a return to the Inland Revenue |
| |
within 30 days of the date referred to in sub-paragraph |
| |
| 10 |
(b) | the return must contain a self-assessment of the 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 |
| |
rates in force at the effective date of the transaction, and |
| 15 |
(d) | the return must be accompanied by payment of any tax or |
| |
| |
(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 |
| 20 |
land transaction return), subject to the adaptation that references |
| |
to the effective date of the transaction shall be read as references to |
| |
the date referred to in sub-paragraph (1)(a) or (b). |
| |
(5) | 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 less tax is payable in |
| 25 |
respect of the transaction than has already been paid— |
| |
(a) | the purchaser may, within the period allowed for |
| |
amendment of the land transaction return, amend the |
| |
| |
(b) | after the end of that period he may (if the land transaction |
| 30 |
return is not so amended) make a claim to the Inland |
| |
Revenue for repayment of the amount overpaid. |
| |
Rent for overlap period in case of grant of further lease |
| |
9 (1) | This paragraph applies where— |
| |
(a) | A surrenders an existing lease to B (“the old lease”) and in |
| 35 |
consideration of that surrender B grants a lease to A of the |
| |
same or substantially the same premises (“the new lease”), |
| |
(b) | the tenant under a lease (“the old lease”) of premises to |
| |
which Part 2 of the Landlord and Tenant Act 1954 or the |
| |
Business Tenancies (Northern Ireland) Order 1996 applies |
| 40 |
makes a request for a new tenancy (“the new lease”) which |
| |
| |
(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 |
| 45 |
| |
(2) | For the purposes of this Part the rent payable under the new lease |
| |
in respect of any period falling within the overlap period is treated |
| |
as reduced by the amount of the rent that would have been |
| |
payable in respect of that period under the old lease. |
| 50 |
|
| |
|
| |
|
(3) | The overlap period is the period between the date of grant of the |
| |
new lease and what would have been the end of the term of the old |
| |
lease had it not been terminated. |
| |
(4) | The rent that would have been payable under the old lease shall be |
| |
taken to be the amount taken into account in determining the |
| 5 |
stamp duty land tax chargeable in respect of the acquisition of the |
| |
| |
(5) | This paragraph does not have effect so as to require the rent |
| |
payable under the new lease to be treated as a negative amount. |
| |
Tenants’ obligations etc that do not count as chargeable consideration |
| 10 |
10 (1) | In the case of the grant of a lease none of the following counts as |
| |
chargeable consideration— |
| |
(a) | any undertaking by the tenant to repair, maintain or insure |
| |
the demised premises (in Scotland, the leased premises); |
| |
(b) | any undertaking by the tenant to pay any amount in |
| 15 |
respect of services, repairs, maintenance or insurance or |
| |
the landlord’s costs of management; |
| |
(c) | any other obligation undertaken by the tenant that is not |
| |
such as to affect the rent that a tenant would be prepared |
| |
to pay in the open market; |
| 20 |
(d) | any guarantee of the payment of rent or the performance |
| |
of any other obligation of the tenant under the lease; |
| |
(e) | any penal rent, or increased rent in the nature of a penal |
| |
rent, payable in respect of the breach of any obligation of |
| |
the tenant under the lease. |
| 25 |
(2) | Where sub-paragraph (1) applies in relation to an obligation, a |
| |
payment made in discharge of the obligation does not count as |
| |
chargeable consideration. |
| |
(3) | The release of any such obligation as is mentioned in sub- |
| |
paragraph (1) does not count as chargeable consideration in |
| 30 |
relation to the surrender of the lease. |
| |
Cases where assignment of lease treated as grant of lease |
| |
11 (1) | If the grant of a lease (“the original lease”) is exempt from charge |
| |
by virtue of any of the provisions specified in sub-paragraph (2), |
| |
the first assignment of the lease that is not exempt from charge by |
| 35 |
virtue of any of those provisions is treated for the purposes of this |
| |
Part as if it were the grant of a lease by the assignor. |
| |
| |
(a) | section 57A (sale and leaseback arrangements); |
| |
(b) | Part 1 or 2 of Schedule 7 (group relief or reconstruction or |
| 40 |
| |
(c) | section 66 (transfers involving public bodies); |
| |
(d) | Schedule 8 (charities relief); |
| |
(e) | any such regulations as are mentioned in section 123(3) |
| |
(regulations reproducing in relation to stamp duty land tax |
| 45 |
the effect of enactments providing for exemption from |
| |
| |
|
| |
|
| |
|
(3) | The grant is treated as being— |
| |
(a) | for a term equal to the unexpired term of the original lease, |
| |
| |
(b) | on the same terms as those on which the assignee holds |
| |
that lease after the assignment. |
| 5 |
(4) | This paragraph does not apply where the relief in question is |
| |
group relief, reconstruction or acquisition relief or charities relief |
| |
and is withdrawn as a result of a disqualifying event occurring |
| |
before the effective date of the assignment. |
| |
(5) | For the purposes of sub-paragraph (4) “disqualifying event” |
| 10 |
| |
(a) | in relation to the withdrawal of group relief, the purchaser |
| |
ceasing to be a member of the same group as the vendor |
| |
(within the meaning of Part 1 of Schedule 7); |
| |
(b) | in relation to the withdrawal of reconstruction or |
| 15 |
acquisition relief, the change of control of the acquiring |
| |
company mentioned in paragraph 9(1)(a) of that Schedule |
| |
or, as the case may be, the event mentioned in paragraph |
| |
11(1)(a) or (2)(a) of that Schedule; |
| |
(c) | in relation to the withdrawal of charities relief, a |
| 20 |
disqualifying event as defined in paragraph 2(3) of |
| |
| |
Assignment of lease: responsibility of assignee for returns etc |
| |
12 (1) | Where a lease is assigned, anything that but for the assignment |
| |
would be required or authorised to be done by or in relation to the |
| 25 |
assignor under or by virtue of— |
| |
(a) | section 80 (adjustment where contingency ceases or |
| |
consideration is ascertained), |
| |
(b) | section 81A (return or further return in consequence of |
| |
later linked transaction), |
| 30 |
(c) | paragraph 3 or 4 of this Schedule (return or further return |
| |
required where lease for indefinite period continues), or |
| |
(d) | paragraph 8 of this Schedule (adjustment where rent |
| |
| |
| shall, if the event giving rise to the adjustment or return occurs |
| 35 |
after the effective date of the assignment, be done instead by or in |
| |
relation to the assignee. |
| |
(2) | So far as necessary for giving effect to sub-paragraph (1) anything |
| |
previously done by or in relation to the assignor shall be treated as |
| |
if it had been done by or in relation to the assignee. |
| 40 |
(3) | This paragraph does not apply if the assignment falls to be treated |
| |
as the grant of a lease by the assignor (see paragraph 11). |
| |
| |
12A (1) | This paragraph applies where in England and Wales or Northern |
| |
| 45 |
(a) | an agreement for a lease is entered into, and |
| |
|
| |
|
| |
|
(b) | the agreement is substantially performed without having |
| |
| |
(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. |
| 5 |
| The effective date of the transaction is that date. |
| |
(3) | Where a lease is subsequently granted in pursuance of the |
| |
| |
(a) | the notional lease is treated as if it were surrendered at that |
| |
| 10 |
(b) | the lease itself 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. |
| |
(4) | Where sub-paragraph (1) 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. |
| |
(5) | In this paragraph “substantially performed” and “completed” |
| 20 |
have the same meanings as in section 44 (contract and |
| |
| |
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 |
| 25 |
Wales or Northern Ireland a person assigns his interest as lessee |
| |
under an agreement for a lease. |
| |
(2) | If the assignment occurs without the agreement having been |
| |
substantially performed, section 44 (contract and conveyance) has |
| |
| 30 |
(a) | the contract were with the assignee and not the assignor, |
| |
| |
(b) | the consideration given by the assignee for entering into |
| |
the contract included any consideration given by him for |
| |
| 35 |
(3) | If the assignment occurs after the agreement has been |
| |
| |
(a) | the assignment is a separate land transaction, and |
| |
(b) | the effective date of that transaction is the date of the |
| |
| 40 |
(4) | Where there are successive assignments, this paragraph has effect |
| |
in relation to each of them. |
| |
Increase of rent treated as grant of new lease: variation of lease |
| |
13 (1) | Where a lease is varied so as to increase the amount of the rent, the |
| |
variation is treated for the purposes of this Part as if it were the |
| 45 |
grant of a lease in consideration of the additional rent made |
| |
| |
|
| |
|