Amendments proposed to the Finance Bill, As Amended - continued	House of Commons
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Mr Oliver Letwin
Mr Mark Prisk
Mr Andrew Tyrie
Mr George Osborne

12

Page     562,     line     25     [Schedule     37],     at end insert—

'Application of paragraph 14

15A

(1)

Paragraph 14 does not apply to a lease if the following two conditions are met.

    (2)   The first condition is that—

(a)	no chargeable consideration other than rent has been given by the Purchaser in respect of the grant of the lease; and

(b)	no arrangements are in place at the time of the grant of the lease for any chargeable consideration other than rent to be given by the Purchaser in respect of the grant of the lease.

    (3)   The second condition is that the rent payable under the lease as granted was a market rent at the time of grant disregarding any provisions in the lease that operate to increase the rent payable after the fifth year of the term of the lease to an amount that exceeds the market rent at the review date.

    (4)   The market rent of a lease at any time is the rent that the lease might reasonably be expected to fetch at that time in the open market.

    (5)   The review date is a date from which the rent determined as a result of a rent review is payable.'.

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Mr Chancellor of the Exchequer

150

Page     251,     line     27     [Clause     292],     leave out 'against the' and insert 'for relief against any'.

   

Mr Chancellor of the Exchequer

151

Page     251,     line     31     [Clause     292],     leave out 'against the double' and insert 'for relief against any excessive'.

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Mr Chancellor of the Exchequer

152

Page     252,     line     4     [Clause     293],     after '(3)' insert—

'Where sub-paragraph (1) does not apply because of sub-paragraph (2), the chargeable consideration for the transaction is determined in accordance with paragraph 8A(1) of Schedule 4.

(4)'. 

   

Mr Chancellor of the Exchequer

153

Page     252     [Clause     293],     leave out lines 10 to 18.

   

Mr Chancellor of the Exchequer

154

Page     252,     line     19     [Clause     293],     leave out 'amendments made by this section are' and insert 'amendment made by this section is'.

   

Mr Chancellor of the Exchequer

155

Page     252,     line     22     [Clause     294],     at end insert—

"Cases where first condition not fully met

3     (1)

This paragraph applies where—

(a)   a land transaction is not exempt from charge under paragraph 1 because the first condition in that paragraph is not met, but

(b)   the purchaser ("C") intends to hold the greater part of the subject-matter of the transaction for qualifying charitable purposes.

(2)	In such a case—

(a)   the transaction is exempt from charge, but

(b)   for the purposes of paragraph 2 (withdrawal of charities relief) "disqualifying event" includes—

(i)	any transfer by C of a major interest in the whole or any part of the subject-matter of the transaction, or

(ii)	any grant by C at a premium of a low-rental lease of the whole or any part of that subject-matter,

that is not made in furtherance of the charitable purposes of C.

(3)	For the purposes of sub-paragraph (2)(b)(ii)—

(a)   a lease is granted "at a premium" if there is consideration other than rent, and

(b)   a lease is a "low-rental" lease if the annual rent (if any) does not exceed £600 a year.

(4)	In relation to a transaction that, by virtue of this paragraph, is a disqualifying event for the purposes of paragraph 2—

(a)   the date of the event for those purposes is the effective date of the transaction;

(b)   paragraph 2 has effect as if—

(i)	in sub-paragraph (1)(b), for "at the time of" there were substituted "immediately before",

(ii)	in sub-paragraph (4)(a), for "at the time of" there were substituted "immediately before and immediately after", and

(iii)

sub-paragraph (4)(b) were omitted.

(5)	In this paragraph—

"qualifying charitable purposes" has the same meaning as in paragraph 1;

"rent" has the same meaning as in Schedule 5 (amount of tax chargeable: rent) and "annual rent" has the same meaning as in paragraph 9(2) of that Schedule.".'.

   

Mr Chancellor of the Exchequer

156

Page     252,     line     22     [Clause     294],     at end insert—

    '()   After paragraph 3 of that Schedule (inserted by subsection (1) above) insert—'.

   

Mr Chancellor of the Exchequer

157

Page     252,     line     24     [Clause     294],     leave out '3' and insert '4'.

   

Mr Chancellor of the Exchequer

158

Page     252,     line     35     [Clause     294],     at end insert—

'(c)   the reference in paragraph 3(2)(b) to the charitable purposes of C is to those of the beneficiaries or unit holders, or any of them.'.

   

Mr Chancellor of the Exchequer

159

Page     252,     line     35     [Clause     294],     at end insert—

    '( )   In paragraph 1(1) of that Schedule, for "this paragraph" substitute "this Schedule".

    ( )   In paragraph 2(1) of that Schedule, for "paragraph 1 (charities relief)" substitute "this Schedule".

    ( )   In section 81 (further return where relief withdrawn), in paragraph (c) of subsection (4) (meaning of "the disqualifying event"), after "paragraph 2(3)" insert "or 3(2)".

    ( )   In section 87 (interest on unpaid tax), in paragraph (c) of subsection (4) (meaning of "the disqualifying event"), after "paragraph 2(3)" insert "or 3(2)".'.

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Mr Chancellor of the Exchequer

166

Page     572,     line     25     [Schedule     39],     leave out 'an interest in land' and insert 'a chargeable interest'.

   

Mr Chancellor of the Exchequer

167

Page     572,     line     29     [Schedule     39],     leave out 'an interest in land' and insert 'a chargeable interest'.

   

Mr Chancellor of the Exchequer

168

Page     572,     line     31     [Schedule     39],     leave out 'an interest in land' and insert 'a chargeable interest'.

   

Mr Chancellor of the Exchequer

169

Page     572,     line     33     [Schedule     39],     leave out 'an interest in land' and insert 'a chargeable interest'.

   

Mr Chancellor of the Exchequer

170

Page     572,     line     34     [Schedule     39],     leave out 'an interest in land' and insert 'a chargeable interest'.

   

Mr Chancellor of the Exchequer

171

Page     572,     line     35     [Schedule     39],     leave out 'an interest in land' and insert 'a chargeable interest'.

   

Mr Chancellor of the Exchequer

172

Page     572,     line     38     [Schedule     39],     leave out 'an interest in land' and insert 'a chargeable interest'.

   

Mr Chancellor of the Exchequer

173

Page     572,     line     39     [Schedule     39],     leave out 'an interest in land' and insert 'a chargeable interest'.

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Mr Chancellor of the Exchequer

174

Page     573,     line     5     [Schedule     39],     leave out 'an interest in land' and insert 'a chargeable interest'.

   

Mr Chancellor of the Exchequer

175

Page     573,     line     8     [Schedule     39],     leave out from 'shall' to end of line 12 and insert—

'(subject to paragraph 11B) be taken to be equal to—

(RCP x MV)+(RCP x AC)

where—

RCP is the relevant chargeable proportion,

MV is the market value of the interest transferred, and

AC is the actual consideration for the transaction.

(2A)	The relevant chargeable proportion in relation to the market value of the interest transferred is—

(100-SLP)%

where SLP is the sum of the lower proportions.

(2B)	The relevant chargeable proportion in relation to the actual consideration for the transaction is—

SLP%

where SLP is the sum of the lower proportions.

(2C)	Paragraph 11A provides for determining the sum of the lower proportions.'.

   

Mr Chancellor of the Exchequer

176

Page     573,     line     13     [Schedule     39],     leave out 'and (3)' and insert 'to (2C)'.

   

Mr Chancellor of the Exchequer

177

Page     573,     line     33     [Schedule     39],     after second 'the' insert 'relevant'.

   

Mr Chancellor of the Exchequer

178

Page     573,     line     37     [Schedule     39],     after second 'the' insert 'relevant'.

   

Mr Chancellor of the Exchequer

179

Page     573,     line     41     [Schedule     39],     leave out from second 'to' to end of line 43 and insert—

'— 

(RCP x MV)+(RCP x AC)

where—

RCP is the relevant chargeable proportion,

MV is the market value of the interest transferred, and

AC is the actual chargeable consideration other than rent.'.

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Mr Chancellor of the Exchequer

180

Page     574     [Schedule     39],     leave out lines 2 to 5 and insert—

'—   

RCP x MV

   where—

RCP is the relevant chargeable proportion, and

MV is the market value of the interest transferred.'.

Prepared 7 Jul 2004