Finance Bill

House of Commons

Session 2007 - 08
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Finance Bill

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
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(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.

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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.”

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Part 5 — Stamp taxes
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(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
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“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

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Part 6 — Oil
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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

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Part 6 — Oil
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(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;