Amendments proposed to the Finance Bill, As Amended - continued	House of Commons
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Mr Chancellor of the Exchequer

181

Page     574,     line     5     [Schedule     39],     at end insert—

'(7)	The relevant chargeable proportion in relation to—

(a)   the net present value of the rent payable over the term of a lease, or

(b)   the market value of the interest transferred,

is—

(100-SLP)%

where SLP is the sum of the lower proportions.

(8)	The relevant chargeable proportion in relation to the actual consideration other than rent is—

SLP%

where SLP is the sum of the lower proportions.

(9)	Paragraph 11A provides for determining the sum of the lower proportions.

(10)	This paragraph is subject to paragraph 11B.'.

   

Mr Chancellor of the Exchequer

182

Page     574,     line     5     [Schedule     39],     at end insert—

'Transfer of chargeable interest to a partnership: sum of the lower proportions

11A

(1)

The sum of the lower proportions in relation to a transaction to which paragraph 10 applies is determined as follows:—

Step One

Identify the relevant owner or owners.

A person is a relevant owner if—

(a)   immediately before the transaction, he was entitled to a proportion of the chargeable interest, and

(b)   immediately after the transaction, he is a partner or connected with a partner.

Step Two

For each relevant owner, identify the corresponding partner or partners.

A person is a corresponding partner in relation to a relevant owner if, immediately after the transaction—

(a)   he is a partner, and

(b)   he is the relevant owner or is connected with the relevant owner.

Step Three

For each relevant owner, find the proportion of the chargeable interest to which he was entitled immediately before the transaction.

Apportion that proportion between any one or more of the relevant owner's corresponding partners.

Step Four

Find the lower proportion for each person who is a corresponding partner in relation to one or more relevant owners.

The lower proportion is—

(a)   the proportion of the chargeable interest attributable to the partner, or

(b)   if lower, the partner's partnership share immediately after the transaction.

The proportion of the chargeable interest attributable to the partner is—

(a)   if he is a corresponding partner in relation to only one relevant owner, the proportion (if any) of the chargeable interest apportioned to him (at Step Three) in respect of that owner;

(b)   if he is a corresponding partner in relation to more than one relevant owner, the sum of the proportions (if any) of the chargeable interest apportioned to him (at Step Three) in respect of each of those owners.

Step Five

Add together the lower proportions of each person who is a corresponding partner in relation to one or more relevant owners.

The result is the sum of the lower proportions.

(2)	For the purposes of this paragraph persons who are entitled to a chargeable interest as beneficial joint tenants (or, in Scotland, as joint owners) shall be taken to be entitled to the chargeable interest as beneficial tenants in common (or, in Scotland, as owners in common) in equal shares.

Transfer of chargeable interest to a partnership consisting wholly of bodies corporate

11B

(1)

This paragraph applies where—

(a)   there is a transaction to which paragraph 10 applies;

(b)   immediately after the transaction all the partners are bodies corporate;

(c)   the sum of the lower proportions is 75 or more.

(2)	Paragraphs 10 and 11 have effect with these modifications.

(3)	In paragraph 10, for sub-paragraphs (2) to (2C) substitute—

"(2)	The chargeable consideration for the transaction shall be taken to be equal to the market value of the interest transferred.".

(4)	In paragraph 10(4), for "sub-paragraphs (2) to (2C)" substitute "sub-paragraph (2)".

(5)	In paragraph 11, omit sub-paragraphs (3) and (7) to (9).

(6)	In paragraph 11, for sub-paragraph (4) substitute—

"(4)	If there is chargeable consideration other than rent, that chargeable consideration shall be taken to be equal to the market value of the interest transferred.".

(7)	In paragraph 11, for sub-paragraph (5)(b) substitute—

"(b)   that chargeable consideration shall be taken to be equal to the market value of the interest transferred.".

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

   

Mr Chancellor of the Exchequer

183

Page     574     [Schedule     39],     leave out lines 7 to 11 and insert—

'12

(1)

This paragraph applies where—

(a)   there is a transfer of an interest in a partnership;

(b)   consideration is given for the transfer;

(c)   the relevant partnership property includes a chargeable interest.

(1A)	The transfer—

(a)   shall be taken for the purposes of this Part to be a land transaction;

(b)   is a chargeable transaction.

(1B)

'.

   

Mr Chancellor of the Exchequer

184

Page     574,     line     23     [Schedule     39],     leave out 'interest in land' and insert 'chargeable interest'.

   

Mr Chancellor of the Exchequer

185

Page     574,     line     41     [Schedule     39],     leave out 'three' and insert 'four'.

   

Mr Chancellor of the Exchequer

186

Page     574,     line     44     [Schedule     39],     after 'no' insert 'chargeable'.

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Mr Chancellor of the Exchequer

187

Page     575,     line     2     [Schedule     39],     after 'any' insert 'chargeable'.

   

Mr Chancellor of the Exchequer

188

Page     575     [Schedule     39],     leave out lines 6 to 16 and insert—

'(4)	The third condition is that—

(a)   the term of the lease is 5 years or less, or

(b)   if the term of the lease is more than 5 years—

(i)	the lease provides for the rent payable under it to be reviewed at least once in every 5 years of the term, and

(ii)	the rent payable under the lease as a result of a review is required to be a market rent at the review date.

(4A)	The fourth condition is that there has been no change to the lease since it was granted which is such that, immediately after the change has effect, the rent payable under the lease is less than a market rent.'.

   

Mr Chancellor of the Exchequer

189

Page     575,     line     36     [Schedule     39],     leave out 'an interest in land' and insert 'a chargeable interest'.

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Mr Chancellor of the Exchequer

190

Page     576,     line     5     [Schedule     39],     after 'transfer' insert '—

(a)   shall be taken for the purposes of this Part to be a land transaction;

(b)   '.

   

Mr Chancellor of the Exchequer

191

Page     576,     line     27     [Schedule     39],     leave out 'an interest in land' and insert 'a chargeable interest'.

   

Mr Chancellor of the Exchequer

192

Page     576     [Schedule     39],     leave out lines 32 to 37.

   

Mr Chancellor of the Exchequer

193

Page     576,     line     38     [Schedule     39],     leave out from 'shall' to end of line 41 and insert—

'(subject to paragraph 17E) 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.

(3A)	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.

(3B)	The relevant chargeable proportion in relation to the actual consideration for the transaction is—

SLP%

where SLP is the sum of the lower proportions.

(3C)	Paragraph 17A provides for determining the sum of the lower proportions.'.

   

Mr Chancellor of the Exchequer

194

Page     576,     line     42     [Schedule     39],     leave out 'sub-paragraph (3)' and insert 'sub-paragraphs (3) to (3C)'.

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Mr Chancellor of the Exchequer

195

Page     577,     line     12     [Schedule     39],     after second 'the' insert 'relevant'.

   

Mr Chancellor of the Exchequer

196

Page     577,     line     16     [Schedule     39],     after second 'the' insert 'relevant'.

   

Mr Chancellor of the Exchequer

197

Page     577,     line     20     [Schedule     39],     leave out from second 'to' to end of line 22 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.'.

   

Mr Chancellor of the Exchequer

198

Page     577     [Schedule     39],     leave out lines 28 to 30 and insert—

   '—

RCP x MV

   where—

RCP is the relevant chargeable proportion, and

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

   

Mr Chancellor of the Exchequer

199

Page     577,     line     30     [Schedule     39],     at end insert—

'(7)	The relevant chargeable proportion in relation to—

(a)   the net present value of the rent payable over the term of a lease, or

(b)   the market value of the interest transferred,

is—

(100-SLP)%

where SLP is the sum of the lower proportions.

(8)	The relevant chargeable proportion in relation to the actual consideration other than rent is—

SLP%

where SLP is the sum of the lower proportions.

    (9)   Paragraph 17A provides for determining the sum of the lower proportions.

    (10)   This paragraph is subject to paragraph 17E.'.

Prepared 7 Jul 2004