Finance Bill

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Session 2007 - 08
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Finance Bill

Finance Bill (Volume II)
Schedule 31 — Stamp duty land tax: special provisions for property-investment partnerships
Part 2 — Elections in respect of interest transferred to partnership
367

Part 2
Elections in respect of interest transferred to partnership
Election when interest transferred to partnership
5
In paragraph 10 of Schedule 15 to FA 2003 (transfer of chargeable interest to
partnership: general) insert at the end—
    “(8)
This paragraph has effect subject to any election under paragraph
12A.”
6
After paragraph 12 insert—
“Election by property-investment partnership to disapply paragraph 10
12A   (1)
Paragraph 10 does not apply to a transfer of a chargeable interest
to a property-investment partnership if the purchaser in relation
to the transaction elects for that paragraph not to apply.
      (2)
Where an election under this paragraph is made in respect of a
transaction—
(a)
paragraph 18 (if relevant) is also disapplied,
(b)
the chargeable consideration for the transaction shall be
taken to be the market value of the chargeable interest
transferred, and
(c)
the transaction falls within Part 2 of this Schedule.
      (3)
An election under this paragraph must be included in the land
transaction return made in respect of the transaction or in an
amendment of that return.
      (4)
Such an election is irrevocable and a land transaction return may
not be amended so as to withdraw the election.
      (5)
Where an election under this paragraph in respect of a transaction
(the “main transaction”) is made in an amendment of a land
transaction return—
(a)
the election has effect as if it had been made on the date on
which the land transaction return was made, and
(b)
any land transaction return in respect of an affected
transaction may be amended (within the period allowed
for amendment of that return) to take account of that
election.
      (6)
In sub-paragraph (5) “affected transaction”, in relation to the main
transaction, means a transaction—
(a)
to which paragraph 14 applied, and
(b)
with an effective date on or after the effective date of the
main transaction.
      (7)
In this paragraph “property-investment partnership” has the
meaning given in paragraph 14(8).”
7
In paragraph 18 of that Schedule (transfer of chargeable interest from a

Finance Bill (Volume II)
Schedule 31 — Stamp duty land tax: special provisions for property-investment partnerships
Part 3 — Transitional provision
368

partnership) insert at the end—
    “(8)
This paragraph has effect subject to any election under paragraph
12A.”
Consequential provision
8
In paragraph 17A(1) of that Schedule (withdrawal of money etc from
partnership after transfer of chargeable interest), after paragraph (c) insert—
“(d)
at the time of the qualifying event, an election has not been
made in respect of the land transfer under paragraph 12A.”
9
In paragraph 26(8) of that Schedule (application of disadvantaged areas
relief), in the substituted paragraph (10)—
(a)
in sub-paragraph (2), insert at the end “(subject to any election under
paragraph 12A)”, and
(b)
in sub-paragraph (4), insert at the end “(subject to any election under
paragraph 12A)”.
Part 3
Transitional provision
10
Omit section 72(14) of FA 2007 (saving relating to changes to Part 3 of
Schedule 15 to FA 2003).
11    (1)
This paragraph applies in the case of a transfer of a chargeable interest to a
partnership falling within paragraph 10(1)(a), (b) or (c) of Schedule 15 to FA
2003 where the effective date of the transaction is before the day on which
this Act is passed.
      (2)
The purchaser in relation to the transaction may at any time before the end
of the period of 12 months beginning with that day amend the land
transaction return in respect of that transaction so as to make an election
under paragraph 12A of Schedule 15 to FA 2003 (inserted by this Schedule).
      (3)
An election made in reliance on sub-paragraph (2) has effect as if it had been
made on the date on which the land transaction return was made, even
though paragraph 12A of Schedule 15 to FA 2003 was not in force at that
time.
      (4)
Where an election is made in reliance on sub-paragraph (2), the power under
section 12A(5)(b) of Schedule 15 to FA 2003 to amend a land transaction
return in respect of an affected transaction to take account of that election
may be exercised at any time before the end of the period of 12 months
beginning with the day on which this Act is passed.

Finance Bill (Volume II)
Schedule 32 — Stamp duty: abolition of fixed duty on certain instruments
Part 1 — Abolition of fixed duty
369

Schedule 32
Section 97

Stamp duty: abolition of fixed duty on certain instruments
Part 1
Abolition of fixed duty
FA 1985
1
Part 3 of FA 1985 (stamp duty) is amended as follows.
2
In section 83 (transfers in connection with divorce, dissolution of civil
partnership, etc), omit subsection (2) (fixed duty).
3
In section 84 (death: varying dispositions, and appropriations)—
(a)
omit subsections (8) and (9) (fixed duty and adjudication), and
(b)
in subsection (11) (commencement), omit the words from “and,” to
“subsection (8) above”.
FA 1986
4
Part 3 of FA 1986 (stamp duty) is amended as follows.
5
In section 66 (company’s purchase of own shares), omit subsection (2A)
(fixed duty).
6
In section 67(9) (transfer of securities between depositary receipt systems),
for “the stamp duty chargeable on the instrument is £5” substitute “stamp
duty is not chargeable on the instrument”.
7
In section 70(9) (transfer of securities between clearance systems), for “the
stamp duty chargeable on the instrument is £5” substitute “stamp duty is not
chargeable on the instrument”.
8
In section 72A(1) (transfer of securities between depositary receipt system
and clearance system), for paragraph (b) substitute—
“(b)
stamp duty is not chargeable on the instrument.”
FA 1999
9
FA 1999 is amended as follows.
10    (1)
Schedule 13 (instruments chargeable to stamp duty and rates of duty) is
amended as follows.
      (2)
In paragraph 1(5) (treasury shares), for the words from “any instrument” to
the end substitute “sub-paragraph (1) does not apply to any instrument to
which sub-paragraph (6) applies.”
      (3)
In Part 3 (other instruments chargeable to stamp duty and rates of duty)
omit—
(a)
paragraph 16 (fixed duty on transfer otherwise than on sale) and the
heading before it,
(b)
paragraph 17 (fixed duty on declaration of use or trust) and the
heading before it,

Finance Bill (Volume II)
Schedule 32 — Stamp duty: abolition of fixed duty on certain instruments
Part 2 — Consequential provisions and saving
370

(c)
paragraph 18(2) (fixed duty on disposition of certain property in
Scotland),
(d)
paragraph 19(1) (fixed duty on duplicate or counterpart),
(e)
paragraph 21(3) (fixed duty on partition or division),
(f)
paragraph 22 (fixed duty on release or renunciation) and the heading
before it, and
(g)
paragraph 23 (fixed duty on surrender) and the heading before it.
11    (1)
Schedule 15 (stamp duty: bearer instruments) is amended as follows.
      (2)
Omit paragraph 6 (fixed duty on instrument given in substitution for a like
instrument stamped ad valorem).
      (3)
At the beginning of Part 2 (exemptions) insert—
“Substitute instruments
12A   (1)
Stamp duty is not chargeable on a substitute instrument.
      (2)
A substitute instrument is a bearer instrument given in
substitution for a like instrument stamped ad valorem (whether
under this Schedule or otherwise) (“the original instrument”).
      (3)
The substitute instrument shall not be treated as duly stamped
unless it appears by some stamp impressed on it that the full and
proper duty has been paid on the original instrument.”
      (4)
In paragraph 20 (variation of original terms or conditions), for paragraph (b)
substitute—
“(b)
has been stamped in accordance with paragraph 12A, or”.
      (5)
In paragraph 26 (instruments treated as duly stamped), omit paragraph (b)
(and the “or” before it).
Part 2
Consequential provisions and saving
FA 1982
12
In section 129(1) of FA 1982 (exemption from duty on grants, transfers to
charities etc), omit “, or paragraph 16,”.
FA 1986
13
Part 3 of FA 1986 (stamp duty) is amended as follows.
14    (1)
Section 67 (stamp duty on certain transfers to depositary receipt systems) is
amended as follows.
      (2)
In subsection (1), after “instrument” insert “(other than a bearer
instrument)”.
      (3)
In subsection (3), for the words from the beginning to “then,” substitute “In
any other case—
(a)
stamp duty is chargeable on the instrument under this
subsection, and
(b)
”.

Finance Bill (Volume II)
Schedule 32 — Stamp duty: abolition of fixed duty on certain instruments
Part 2 — Consequential provisions and saving
371

      (4)
After subsection (9) insert—
“(9A)
In this section “bearer instrument” has the meaning given in
paragraph 3 of Schedule 15 to the Finance Act 1999.”
15    (1)
Section 70 (stamp duty on certain transfers to a clearance system) is
amended as follows.
      (2)
In subsection (1), after “instrument” insert “(other than a bearer
instrument)”.
      (3)
In subsection (3), for the words from the beginning to “then,” substitute “In
any other case—
(a)
stamp duty is chargeable on the instrument under this
subsection, and
(b)
”.
      (4)
After subsection (9) insert—
“(9A)
In this section “bearer instrument” has the meaning given in
paragraph 3 of Schedule 15 to the Finance Act 1999.”
FA 1987
16
Part 3 of FA 1987 (stamp duty and stamp duty reserve tax) is amended as
follows.
17
In section 50(1) (warrants to purchase Government stock, etc), omit “, or
paragraph 16”.
18
In section 55(1) (Crown exemption), omit “, or paragraph 16”.
FA 1990
19
In section 108(1) of FA 1990 (abolition of stamp duty on transfer of
securities), insert at the end “or section 67(3) or 70(3) of the Finance Act 1986
(stamp duty on certain transfers to depositary receipt systems and clearance
systems)”.
FA 1999
20
In Schedule 14 to FA 1999, omit paragraphs 10(b), 11(b), 12(3) and 13(3).
FA 2003
21
In Schedule 40 to FA 2003, omit paragraph 2(b).
Saving for certain land transactions
22    (1)
The following provisions of this Schedule do not have effect in relation to an
instrument effecting a land transaction or a duplicate or counterpart of such
an instrument—
(a)
paragraphs 1 to 3,
(b)
paragraph 10,
(c)
paragraph 12,
(d)
paragraph 18, and
(e)
the repeal of paragraphs 10(b) and 11(b) of Schedule 14 to FA 1999.

Finance Bill (Volume II)
Schedule 33 — PRT: elections for oil fields to become non-taxable
Part 1 — New Schedule 20A to FA 1993
372

      (2)
In sub-paragraph (1) “land transaction” has the same meaning as in Part 4 of
FA 2003, except that it does not include a transfer of an interest in a property-
investment partnership (within the meaning of Schedule 15 of that Act).
Repeals on abolition day
23
If a day is appointed under section 111 of FA 1990 (abolition day),
paragraphs 14 and 15 of this Schedule cease to have effect in accordance with
section 108 of that Act.
Schedule 33
Section 105

PRT: elections for oil fields to become non-taxable
Part 1
New Schedule 20A to FA 1993
1
This is Schedule 20A to be inserted before Schedule 21 to FA 1993—
“SCHEDULE 20A
PRT: elections for oil fields to become non-taxable
Election by responsible person
1     (1)
The responsible person for a taxable field may make an election
that the field is to be non-taxable.
      (2)
An election is irrevocable.
      (3)
The responsible person may not make an election unless each
person who is a participator at the time the election is made agrees
to the election being made.
      (4)
If the responsible person makes an election, the Commissioners
may assume that each participator agrees to the election being
made (unless it appears to the Commissioners that a participator
does not agree).
Decision by Commissioners
2     (1)
If an election is made, the Commissioners must decide whether or
not the field is no longer taxable.
      (2)
For the purposes of this paragraph, the field is no longer taxable if
it appears to the Commissioners that one or other of the following
conditions is met in relation to each future chargeable period.
      (3)
Condition A is that no assessable profit will accrue to any
participator in the field in that period.
      (4)
Condition B is that the assessable profit accruing to each
participator in the field in that period will be equal to, or smaller

Finance Bill (Volume II)
Schedule 33 — PRT: elections for oil fields to become non-taxable
Part 1 — New Schedule 20A to FA 1993
373

than, the cash equivalent of that participator’s share of the oil
allowance for the field in that period.
      (5)
The responsible person must give the Commissioners such
information as the Commissioners may reasonably require in
connection with their making a decision under sub-paragraph (1).
      (6)
The Commissioners may make such assumptions as they think
appropriate for the purposes of making a decision under this
paragraph (including assumptions about what, if any,
participators there will be in the field in future chargeable
periods).
      (7)
In this paragraph—
“assessable profit” means assessable profit before any
reduction under section 7 of OTA 1975 (relief for allowable
losses);
“future chargeable period”, in relation to a decision by the
Commissioners under this paragraph, means a chargeable
period that falls at any time after the chargeable period in
which the Commissioners make that decision.
3     (1)
The Commissioners must give the responsible person notice of
their decision under paragraph 2(1).
      (2)
Within one month of being given notice by the Commissioners of
their decision, the responsible person must give copies of the
notice to each person who is a participator, or a former
participator, at the time the Commissioners’ notice is given.
      (3)
But the responsible person is not required to give notice to any
person to whom it would be impracticable to give notice.
When election has effect
4     (1)
An election does not have effect unless the Commissioners decide
under paragraph 2(1) that the field is no longer taxable.
      (2)
In such a case, the election has effect from the start of the first
chargeable period to begin after the Commissioners give notice
under paragraph 3.
      (3)
The election then continues to have effect indefinitely (unless
cancelled in accordance with paragraph 6).
No unrelievable field losses from field
5
For as long as the election has effect, no allowable loss that accrues
from the oil field is an allowable unrelievable field loss for the
purposes of petroleum revenue tax.
Cancellation of election by Commissioners
6     (1)
The Commissioners may cancel an election if, within 3 years of
their giving notice under paragraph 3, it appears to them that—