|
| |
|
(2) | Sub-paragraph (1) does not apply to an increase of rent in |
| |
pursuance of a provision contained in the lease (but see paragraph |
| |
| |
Increase of rent treated as grant of new lease: abnormal increase after fifth year |
| |
14 (1) | This paragraph applies if, after the end of the fifth year of the term |
| 5 |
| |
(a) | the amount of rent payable increases (or is increased) in |
| |
accordance with the provisions of the lease, and |
| |
(b) | the rent payable as a result (“the new rent”) is such that the |
| |
increase falls to be regarded as abnormal (see paragraph |
| 10 |
| |
(2) | The increase in rent is treated as if it were the grant of a lease in |
| |
consideration of the excess rent. |
| |
(3) | The excess rent is the difference between the new rent and the rent |
| |
| 15 |
(4) | The rent previously taxed is— |
| |
(a) | where the provisions of this paragraph have not |
| |
previously applied to a rent increase under the lease, the |
| |
rent that is assumed to be payable after the fifth year of the |
| |
term of the lease (in accordance with paragraph 7(3)); |
| 20 |
(b) | where the provisions of this paragraph have previously so |
| |
applied, the rent payable as a result of the last increase in |
| |
relation to which the provisions of this paragraph applied. |
| |
(5) | The deemed grant is treated as— |
| |
(a) | made on the date on which the increased rent first became |
| 25 |
| |
(b) | for a term equal to the unexpired part of the original lease, |
| |
| and as linked with the grant of the original lease (and with any |
| |
other transaction with which that transaction is linked). |
| |
(6) | The assumption in paragraph 7(3) (that the rent does not change |
| 30 |
after the end of the fifth year of the term of a lease) does not apply |
| |
for the purposes of this paragraph or paragraph 15 except for the |
| |
purpose of determining the rent previously taxed. |
| |
Increase of rent after fifth year: whether regarded as abnormal |
| |
15 | Whether an increase in rent is to be regarded for the purposes of |
| 35 |
paragraph 14 as abnormal is determined as follows:— |
| |
| |
| Find the start date, which is— |
| |
(a) | where the provisions of that paragraph have not |
| |
previously applied to a rent increase under the lease, the |
| 40 |
beginning of the period by reference to which the rent |
| |
assumed to be payable after the fifth year of the term of the |
| |
lease is determined in accordance with paragraph 7(3); |
| |
(b) | where the provisions of that paragraph have previously so |
| |
applied, the date of the last increase in relation to which the |
| 45 |
provisions of that paragraph applied. |
| |
|
| |
|
| |
|
| |
| Divide the period between the start date and the date on which the |
| |
new rent first becomes payable (“the reference period”) into— |
| |
(a) | successive periods of twelve months running from the |
| |
| 5 |
(b) | any remaining period which does not fall within |
| |
| |
| |
| Find the factor by which the retail prices index has increased over |
| |
each period identified in step two. |
| 10 |
| This is a figure expressed as a decimal and determined by the |
| |
formula—![equation: over[id[plus[times[char[R],char[D]],minus[times[char[R],char[I]]]]],times[char[R],
char[I]]]](missing.gif) |
| |
| |
| RD is the retail prices index for the month in which the last |
| |
day of the period in question falls, and |
| 15 |
| RI is the retail prices index for the month in which the first |
| |
day of the period in question falls. |
| |
| If, in relation to any period, RD is equal to or less than RI, the factor |
| |
by which the retail prices index has increased over the period in |
| |
question shall be treated as nil. |
| 20 |
| If, in relation to any period, the figure determined in accordance |
| |
with the formula would be a figure having more than 3 decimal |
| |
places, round it to the nearest third decimal place. |
| |
| |
| Find the relevant factor for each period identified in step two. |
| 25 |
| This is a figure expressed as a decimal and determined by the |
| |
formula—![equation: plus[num[1.00000000,"1"],id[(*i2i*)cross[num[0.05000000,"0.05"],over[char[m],num[
12.00000000,"12"]]]],char[r]]](missing.gif) |
| |
| |
| m is the number of months in the period in question (treating |
| |
part of a month as a whole month), and |
| 30 |
| r is the factor by which the retail prices index has increased |
| |
over the period in question, determined under step three. |
| |
| If, in relation to any period, the figure determined in accordance |
| |
with the formula would have more than 3 decimal places, round it |
| |
to the nearest third decimal place. |
| 35 |
|
| |
|
| |
|
| |
| Find the uplift factor for the reference period as follows. |
| |
| If there is only one period identified in step two, the uplift factor |
| |
for the reference period is the relevant factor for that period. |
| |
| If there are only two periods identified in step two, the uplift factor |
| 5 |
for the reference period is calculated by multiplying the relevant |
| |
factors for those periods. |
| |
| If there are more than two periods identified in step two, the uplift |
| |
factor for the reference period is calculated by— |
| |
(a) | multiplying the relevant factors for the first two periods, |
| 10 |
(b) | multiplying the result by the relevant factor for the next |
| |
| |
(c) | if there are further periods, multiplying the result by the |
| |
relevant factor for the next period, |
| |
| until all periods have been taken into account. |
| 15 |
| If the uplift factor for the reference period would be a figure |
| |
having more than 3 decimal places, round it to the nearest third |
| |
| |
| |
| The rent increase is regarded as abnormal if the new rent is greater |
| 20 |
than:![equation: cross[char[R],times[char[U],char[F]]]](missing.gif) |
| |
| |
| R is the rent previously taxed (see paragraph 14(4)), and |
| |
| UF is the uplift factor for the reference period. |
| |
Surrender of existing lease in return for new lease |
| 25 |
16 | Where a lease is granted in consideration of the surrender of an |
| |
existing lease between the same parties— |
| |
(a) | the grant of the new lease does not count as chargeable |
| |
consideration for the surrender, and |
| |
(b) | the surrender does not count as chargeable consideration |
| 30 |
for the grant of the new lease. |
| |
| Paragraph 5 (exchanges) of Schedule 4 (chargeable consideration) |
| |
does not apply in such a case. |
| |
Assignment of lease: assumption of obligations by assignee |
| |
17 | In the case of an assignment of a lease the assumption by the |
| 35 |
assignee of the obligation— |
| |
| |
(b) | to perform or observe any other undertaking of the tenant |
| |
| |
| does not count as chargeable consideration for the assignment. |
| 40 |
|
| |
|
| |
|
| |
18 (1) | In the case of the grant, assignment or surrender of a lease a |
| |
reverse premium does not count as chargeable consideration. |
| |
(2) | A “reverse premium” means— |
| |
(a) | in relation to the grant of a lease, a premium moving from |
| 5 |
the landlord to the tenant; |
| |
(b) | in relation to the assignment of a lease, a premium moving |
| |
from the assignor to the assignee; |
| |
(c) | in relation to the surrender of a lease, a premium moving |
| |
from the tenant to the landlord. |
| 10 |
Provisions relating to leases in Scotland |
| |
19 (1) | In the application of this Part to Scotland— |
| |
(a) | any reference to the term of a lease is to the period of the |
| |
| |
(b) | any reference to the reversion on a lease is to the interest of |
| 15 |
the landlord in the property subject to the lease. |
| |
(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 |
| 20 |
| |
(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. |
| |
| 25 |
(a) | there is an agreement (including missives of let not |
| |
constituting a lease) under which a lease is to be executed, |
| |
| |
(b) | the agreement is substantially performed without a lease |
| |
| 30 |
| 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 when the agreement is |
| |
| 35 |
(4) | Where sub-paragraph (3) applies and at some later time a lease is |
| |
| |
(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 as |
| 40 |
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 is in conformity with, or |
| |
relates to substantially the same property and period as, the |
| |
missives of let or other agreement. |
| 45 |
(6) | Where sub-paragraph (3) 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- |
| |
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.”. |
| |
(3) | In section 51 (contingent, uncertain or unascertained consideration), after |
| 5 |
| |
“(5) | This section applies in relation to chargeable consideration |
| |
consisting of rent only to the extent that it is applied by paragraph 7 |
| |
| |
(4) | In section 80 (adjustment where contingency ceases or consideration |
| 10 |
| |
(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 |
| |
of the transaction shall be read as references to the date of the event |
| 15 |
as a result of which the return is required”; and |
| |
(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 |
| 20 |
relevant date”), after paragraph (aa) (inserted by paragraph 19(3) above) |
| |
| |
“(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 |
| 25 |
the lease becomes treated as being for a longer fixed term;”. |
| |
(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 |
| |
| 30 |
(7) | In the table in section 122 (index of defined expressions), in the second |
| |
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) |
| 35 |
| |
“(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 |
| 40 |
23 | In section 125(5) (abolition of stamp duty except on instruments relating to |
| |
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 |
| |
| 45 |
(c) | in the second sentence, after “instrument effecting both a land |
| |
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— |
| |
“Contracts substantially performed after implementation date |
| 5 |
| |
(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 |
| |
been completed, after the implementation date, and |
| 10 |
(c) | there is subsequently an event within paragraph 3(3) by |
| |
virtue of which the transaction is an SDLT transaction, |
| |
| 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). |
| 15 |
Application of provisions in case of transfer of rights |
| |
4B (1) | This paragraph applies where section 44 (contract and |
| |
conveyance) has effect in accordance with section 45 (effect of |
| |
| |
(2) | Any reference in paragraph 3, 4 or 4A to the date when a contract |
| 20 |
was entered into (or made) shall be read, in relation to a contract |
| |
deemed to exist by virtue of section 45(3) (deemed secondary |
| |
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 |
| 25 |
| |
25 (1) | In Schedule 19 (commencement and transitional provisions), after |
| |
paragraph 7 (earlier related transactions under stamp duty) insert— |
| |
“Stamping of contract where transaction on completion subject to stamp duty land |
| |
| 30 |
7A (1) | This paragraph applies where— |
| |
(a) | a contract that apart from paragraph 7 of Schedule 13 to the |
| |
Finance Act 1999 (contracts chargeable as conveyances on |
| |
sale) would not be chargeable with stamp duty is entered |
| |
into before the implementation date, |
| 35 |
(b) | a conveyance made in conformity with the contract is |
| |
effected on or after the implementation date, and |
| |
(c) | the transaction effected on completion is an SDLT |
| |
transaction or would be but for an exemption or relief from |
| |
| 40 |
(2) | If in those circumstances the contract 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 transaction |
| |
| |
(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 |
| 5 |
(b) | the contract shall be deemed thereupon to be duly |
| |
| |
(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)— |
| 10 |
(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—”. |
| |
(3) | For sub-paragraph (2) of that paragraph substitute— |
| 15 |
“(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 |
| |
| |
(a) | the payment of stamp duty land tax in respect of the grant |
| 20 |
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 |
| |
| |
(b) | the agreement shall be deemed thereupon to be duly |
| |
| 25 |
(4) | In section 122 (index of defined expressions), at the appropriate place |
| |
| |
|
| |
26 | This Part of this Schedule applies in relation to any transaction of which the |
| 30 |
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. |
| |
| |
| |
Stamp duty land tax: claims not included in returns |
| |
| The following is the Schedule inserted after Schedule 11 to the Finance Act |
| 35 |
|
| |
|