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Finance Bill
Part 5 — Stamp taxes

54

 

(a)   

one whose subject-matter consists of all of the interests in

land that is residential property, and

(b)   

one whose subject-matter consists of all of the interests in

land that is non-residential property.

      (5)  

For that purpose, the chargeable consideration attributable to each of

5

those separate transactions (or sets of linked transactions) is the

chargeable consideration so attributable on a just and reasonable

apportionment.

      (6)  

In this paragraph “the relevant rent” means—

(a)   

the annual rent in relation to the transaction in question, or

10

(b)   

if that transaction is one of a number of linked transactions

for which the chargeable consideration consists of or includes

rent, the total of the annual rents in relation to all of those

transactions.

      (7)  

In sub-paragraph (6) the “annual rent” means the average annual

15

rent over the term of the lease or, if—

(a)   

different amounts of rent are payable for different parts of the

term, and

(b)   

those amounts (or any of them) are ascertainable at the

effective date of the transaction,

20

           

the average annual rent over the period for which the highest

ascertainable rent is payable.

      (8)  

In this paragraph “relevant land” has the meaning given in section

55(3) and (4).”

(4)   

Each of the following provisions of Schedule 6 to that Act (SDLT:

25

disadvantaged areas relief) is amended in accordance with subsection (5)—

(a)   

paragraph 5(4) (residential land wholly situated in disadvantaged

area),

(b)   

paragraph 6(6) (mixed land wholly situated in disadvantaged area),

(c)   

paragraph 9(4) (residential land partly situated in disadvantaged area),

30

and

(d)   

paragraph 10(6) (mixed land wholly partly situated in disadvantaged

area).

(5)   

In those provisions—

(a)   

in paragraph (a), omit sub-paragraph (i) (and the “and” after it), and

35

(b)   

omit paragraph (b).

(6)   

In paragraph 12 of that Schedule (rent and annual rent), for “9(2)” substitute

“9A”.

(7)   

In Schedule 8 to that Act (SDLT: charities relief), in paragraph 3—

(a)   

in sub-paragraph (3)(b), for “does not exceed £600” substitute “is less

40

than £1,000”, and

(b)   

in sub-paragraph (5), for “9(2)” substitute “9A”.

(8)   

In Schedule 15 to that Act (SDLT: partnerships)—

(a)   

in paragraph 11(2B)(a), for “9(2A)” substitute “9A(6)”,

(b)   

in paragraph 19(2B), for “9(2A)” substitute “9A(6)”, and

45

(c)   

in paragraph 23(3)(c), for “9(2)” substitute “9A”.

 
 

Finance Bill
Part 5 — Stamp taxes

55

 

(9)   

In Schedule 17A to that Act (SDLT: further provisions relating to leases) in

paragraph 18A(5)(a)—

(a)   

for “9(2)” substitute “9A”,

(b)   

for “the Tables” substitute “Table B”, and

(c)   

for “the relevant rental figure exceeds £600” substitute “the relevant

5

rent attributable to non-residential property is not less than £1,000”.

(10)   

The amendments made by this section have effect in relation to transactions

with an effective date on or after 12 March 2008.

93      

Withdrawal of group relief

(1)   

Part 1 of Schedule 7 to FA 2003 (group relief) is amended as follows.

10

(2)   

In paragraph 3(5), for “paragraph 4” substitute “paragraphs 4 and 4ZA”.

(3)   

In paragraph 4 (cases in which group relief not withdrawn)—

(a)   

omit sub-paragraphs (2) and (3), and

(b)   

in sub-paragraph (5), for “sub-paragraphs (3) and (4)” substitute “sub-

paragraph (4)”.

15

(4)   

After that paragraph insert—

“Group relief not withdrawn where vendor leaves group

4ZA   (1)  

Group relief is not withdrawn under paragraph 3 where the

purchaser ceases to be a member of the same group as the vendor

because the vendor leaves the group.

20

      (2)  

The vendor is regarded as leaving the group if the companies cease

to be members of the same group by reason of a transaction relating

to shares in—

(a)   

the vendor, or

(b)   

another company that—

25

(i)   

is above the vendor in the group structure, and

(ii)   

as a result of the transaction ceases to be a member of

the same group as the purchaser.

      (3)  

For the purpose of sub-paragraph (2) a company is “above” the

vendor in the group structure if the vendor, or another company that

30

is above the vendor in the group structure, is a 75% subsidiary of the

company.

      (4)  

But if there is a change in the control of the purchaser after the

vendor leaves the group, paragraphs 3, 4(6) and (7), 5 and 6 have

effect as if the purchaser had then ceased to be a member of the same

35

group as the vendor.

      (5)  

For the purposes of this paragraph there is a change in the control of

the purchaser if—

(a)   

a person who controls the purchaser (alone or with others)

ceases to do so,

40

(b)   

a person obtains control of the purchaser (alone or with

others), or

(c)   

the purchaser is wound up.

 
 

Finance Bill
Part 5 — Stamp taxes

56

 

      (6)  

For the purposes of sub-paragraph (5) a person does not control, or

obtain control of, the purchaser if that person is under the control of

another person or other persons.

      (7)  

In this paragraph references to “control” shall be interpreted in

accordance with section 416 of the Taxes Act 1988 (subject to sub-

5

paragraph (6)).”

(5)   

In paragraph 4A(1) (withdrawal of group relief in certain cases involving

successive transactions), in the words following paragraph (d), for “and 4”

substitute “, 4 and 4ZA”.

(6)   

The amendments made by this section have effect—

10

(a)   

in relation to transactions with an effective date on or after 13 March

2008, and

(b)   

(subject to subsection (7)) in relation to transactions with an effective

date before that day if, on or after that day, there is a change in the

control of the purchaser (within the meaning of paragraph 4ZA(5) of

15

Schedule 7 to FA 2003, inserted by this section).

(7)   

The amendments made by this section do not have effect by virtue of

subsection (6)(b) where the change of control takes place in pursuance of a

contract entered into before 13 March 2008.

94      

Transfers of interests in property-investment partnerships

20

(1)   

Schedule 31 contains provision relating to stamp duty land tax chargeable on

transfers to, and of interests in, property-investment partnerships.

(2)   

Part 1 of that Schedule (transfer of interest in partnership: “relevant

partnership property”), and this section so far as relating to that Part—

(a)   

have effect in respect of transfers occurring on or after 19 July 2007

25

(subject to subsection (3)), and

(b)   

are treated as having come into force on that day.

(3)   

Subsections (14) and (17) of section 72 of FA 2007 (partnerships) apply in

relation to the amendments made by Part 1 of that Schedule as they apply in

relation to the amendments made by subsections (6) and (10) of that section.

30

Stamp duty

95      

Exemption from ad valorem stamp duty for low value transactions

(1)   

Paragraph 1 of Schedule 13 to FA 1999 (charge to stamp duty on conveyance or

transfer on sale) is amended as follows.

(2)   

In sub-paragraph (3), for “(4)” substitute “(3A)”.

35

(3)   

After that sub-paragraph insert—

   “(3A)  

Stamp duty is not chargeable under sub-paragraph (1) on a transfer

of stock or marketable securities where—

(a)   

the amount or value of the consideration for the sale is £1,000

or under, and

40

(b)   

the instrument is certified at £1,000.”

 
 

Finance Bill
Part 5 — Stamp taxes

57

 

(4)   

In paragraph 6(1) (meaning of instrument being certified at an amount), for

“paragraph” substitute “paragraphs 1(3A) and”.

(5)   

The amendments made by this section have effect in relation to instruments

executed on or after 13 March 2008 and not stamped before 19 March 2008.

(6)   

For the purposes of section 14(4) of the Stamp Act 1891 (c. 39) (instruments not

5

to be given in evidence etc unless stamped in accordance with the law in force

at the time of first execution), the law in force at the time of execution of an

instrument—

(a)   

executed on or after 13 March 2008 but before 19 March 2008, and

(b)   

not stamped before 19 March 2008,

10

   

shall be deemed to be the law as varied in accordance with this section.

96      

Abolition of fixed stamp duty on certain instruments

(1)   

Schedule 32 contains provision abolishing fixed stamp duty on certain

instruments.

(2)   

The amendments and saving made by that Schedule have effect in relation to

15

instruments executed on or after 13 March 2008 and not stamped before 19

March 2008.

(3)   

For the purposes of section 14(4) of the Stamp Act 1891 (instruments not to be

given in evidence etc unless stamped in accordance with the law in force at the

time of first execution), the law in force at the time of execution of an

20

instrument—

(a)   

executed on or after 13 March 2008 but before 19 March 2008, and

(b)   

not stamped before 19 March 2008,

   

shall be deemed to be the law as varied in accordance with Schedule 32.

97      

Loan capital

25

(1)   

Section 79 of FA 1986 (stamp duty and loan capital) is amended as follows.

(2)   

In subsection (6), for “subsection (7)” substitute “subsections (7) to (7B)”.

(3)   

After subsection (7A) insert—

“(7B)   

Subsection (4) shall not be prevented from applying to a capital market

instrument by virtue of subsection (6)(b) by reason only that the capital

30

market investment concerned carries or has carried a right to interest

which ceases or reduces if, or to the extent that, the issuer, after meeting

or providing for other obligations specified in the capital market

arrangement concerned, has insufficient funds available from that

capital market arrangement to pay all or part of the interest otherwise

35

due.”

(4)   

After subsection (12) insert—

“(13)   

In this section—

“capital market instrument” means an instrument transferring a

capital market investment issued as part of a capital market

40

arrangement, and

 
 

Finance Bill
Part 6 — Oil

58

 

“capital market investment” and “capital market arrangement”

have the same meaning as in section 72B of the Insolvency Act

1986 (see paragraphs 1 to 3 of Schedule 2A to that Act).”

(5)   

The amendments made by this section have effect in relation to any instrument

executed on or after the day on which this Act is passed.

5

Part 6

Oil

Petroleum revenue tax

98      

Meaning of “participator”

(1)   

In section 12 of OTA 1975 (interpretation of Part 1), the definition of

10

“participator” is amended as follows.

(2)   

In the words before paragraph (a), after “chargeable period” insert “(“the

relevant chargeable period”)”.

(3)   

In paragraphs (a), (b) and (c), for “that chargeable period” substitute “the

relevant chargeable period”.

15

(4)   

At the end of paragraph (c) insert “and

(d)   

a former participator to whom an amount is attributed

under paragraph 2A(2) of Schedule 5 in respect of a

default payment made in relation to the field in the

relevant chargeable period; and

20

(e)   

a former participator to whom an amount was

attributed under paragraph 2A(2) of Schedule 5 in

respect of a default payment made in relation to the field

in either of the two chargeable periods preceding the

relevant chargeable period; and

25

(f)   

a person who—

(i)   

made a default payment in relation to the field

(whether the person was then a current

participator or former participator),

(ii)   

is not a participator during the relevant

30

chargeable period under any of paragraphs (a) to

(e) of this definition, and

(iii)   

receives, in the relevant chargeable period,

reimbursement expenditure (within the

meaning of section 108(1)(c) of the Finance Act

35

1991) in respect of the default payment; and

(g)   

a person who—

(i)   

made a default payment in relation to the field

(whether the person was then a current

participator or former participator),

40

(ii)   

is not a participator during the relevant

chargeable period under any of paragraphs (a) to

(f) of this definition, and

(iii)   

received, in either of the two chargeable periods

preceding the relevant chargeable period,

45

 
 

Finance Bill
Part 6 — Oil

59

 

reimbursement expenditure (within the

meaning of section 108(1)(c) of the Finance Act

1991) in respect of the default payment;

   

and for the purposes of paragraphs (f)(i) and (g)(i),

“current participator”, “former participator” and

5

“default payment” have the same meaning as in

paragraph 2A of Schedule 5;”.

(5)   

The amendments made by this section have effect in relation to expenditure

incurred after 30 June 2008.

99      

Abandonment expenditure: default by participator met by former

10

participator

(1)   

In Schedule 5 to OTA 1975 (allowance of expenditure, other than abortive

exploration expenditure), for paragraph 2A substitute—

“2A   (1)  

This paragraph applies if—

(a)   

a current participator (“the defaulter”) has defaulted on a

15

liability under—

(i)   

a relevant agreement, or

(ii)   

an abandonment programme,

   

to make a payment towards abandonment expenditure, and

(b)   

a current or former participator (“the contributing

20

participator”) pays an amount in or towards meeting the

whole or part of the default (“a default payment”).

      (2)  

If a claim is made under this Schedule for the allowance of the

abandonment expenditure, the amount of the default payment is to

be attributed to the contributing participator for the purposes of

25

paragraphs 2(4)(b) and 3(1)(c).

      (3)  

But the amount attributed under sub-paragraph (2) may not

exceed—

(a)   

so much of the sum in default as the contributing participator

is required to meet in accordance with—

30

(i)   

the relevant agreement, or

(ii)   

the abandonment programme, or

(b)   

such other amount as the participator may be required to

meet in accordance with a direction given under Part 4 of the

Petroleum Act 1998.

35

      (4)  

Sub-paragraph (2) is subject to paragraph 2B.

      (5)  

In determining the amount which is to be attributed to the

contributing participator under sub-paragraph (2), account shall be

taken of the whole of the defaulter’s interest in the relevant oil field.

      (6)  

But in determining the share of the abandonment expenditure to be

40

attributed to the defaulter under paragraph 2(4)(b), the amount

which would be attributed by reference to the defaulter’s interest in

the relevant oil field is to be reduced or (as the case may be)

extinguished by the deduction of the aggregate of—

(a)   

the amount attributed to the contributing participator under

45

sub-paragraph (2), and

 
 

Finance Bill
Part 6 — Oil

60

 

(b)   

any other amounts attributed under sub-paragraph (2) to

other current or former participators who make default

payments in respect of the defaulter’s default.

2B    (1)  

No amount is to be attributed to a contributing participator under

paragraph 2A(2) unless the following conditions are all met.

5

      (2)  

The first condition is that the contributing participator is not

connected with the defaulter, applying section 839 of the Taxes Act

(connected persons) for the purposes of this sub-paragraph.

      (3)  

The second condition is that, at the end of the claim period for which

the claim is made, the defaulter still has an interest in the relevant oil

10

field which, under paragraph 2(4)(b), falls to be taken into account in

determining the shares in the abandonment expenditure.

      (4)  

The third condition is that the relevant participators have taken all

reasonable steps by way of legal remedy—

(a)   

to secure that the defaulter meets the whole of the liability

15

referred to in paragraph 2A(1)(a), and

(b)   

to enforce any guarantee or other security provided in

respect of that liability.

      (5)  

In sub-paragraph (4) “relevant participators” means—

(a)   

each current participator (other than the defaulter), and

20

(b)   

each former participator who makes a default payment in

respect of the defaulter’s default.

2C    (1)  

An amount attributed under paragraph 2A(2) is—

(a)   

in the case of a current participator, to be an addition to the

share of the abandonment expenditure referable to the

25

current participator’s interest in the oil field, or

(b)   

in the case of a former participator, to be the share of the

abandonment expenditure referable to the former

participator’s interest in the oil field.

      (2)  

In paragraphs 2A and 2B and this paragraph—

30

“abandonment expenditure” means expenditure which is

allowable for an oil field by virtue of section 3(1)(i) or (j);

“abandonment programme” means an abandonment

programme approved under Part 4 of the Petroleum Act 1998

(including any such programme as revised);

35

“current participator” means a person who is, by virtue of

paragraph (a), (b) or (c) of the definition in section 12, a

participator in the relevant oil field in the chargeable period

in which the abandonment expenditure is incurred;

“former participator” means a person who—

40

(a)   

is not a current participator, but

(b)   

was, by virtue of paragraph (a), (b) or (c) of the

definition in section 12, a participator in the relevant

oil field in any chargeable period before the

chargeable period in which the abandonment

45

expenditure is incurred;

“relevant agreement” has the meaning given by section

104(5)(a) of the Finance Act 1991;

 
 

 
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