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Prevention of SDLT avoidance |
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1 | Part 4 of FA 2003 (stamp duty land tax) is amended as follows. |
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Alternative property finance |
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2 | In section 45 (contract and conveyance: effect of transfer of rights), in |
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subsection (3) for the words from “subsection (3)” to the end substitute “any |
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of sections 71A to 73 (which relate to alternative property finance).” |
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3 (1) | Omit sections 71A(8), 72(7), 72A(8) and 73(5)(a) (which contain definitions of |
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“financial institution” for the purposes of provisions relating to alternative |
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(2) | After section 73B insert— |
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“73BA | Meaning of “financial institution” |
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(1) | In sections 71A to 73B “financial institution” has the meaning given |
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by section 564B of the Income Tax Act 2007. |
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(2) | For this purpose section 564B(1) applies as if paragraph (d) were |
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4 (1) | Paragraph 5 of Schedule 4 (chargeable consideration: exchanges) is |
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(2) | In sub-paragraph (3)— |
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(a) | for paragraph (a)(i) and (ii) substitute— |
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“(i) | the amount determined under sub- |
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paragraph (3A) in respect of the acquisition, |
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(ii) | if greater, the amount which would be the |
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chargeable consideration for the acquisition |
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ignoring paragraph 5;”, and |
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(b) | for paragraph (b)(i) and (ii) substitute— |
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“(i) | the amount determined under sub- |
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paragraph (3A) in respect of that |
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(ii) | if greater, the amount which would be the |
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chargeable consideration for that |
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acquisition ignoring paragraph 5;”. |
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(3) | After that sub-paragraph insert— |
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“(3A) | The amount mentioned in sub-paragraph (3)(a)(i) and (b)(i) is— |
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(a) | the market value of the subject-matter of the acquisition, |
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(b) | if the acquisition is the grant of a lease at a rent, that rent.” |
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5 (1) | Subject to what follows, the amendments made by paragraphs 2 and 4 have |
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effect in relation to any transaction the effective date of which is on or after |
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(2) | The amendments do not have effect in relation to any transaction (other than |
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a notional transaction under section 75A of FA 2003)— |
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(a) | which is effected in pursuance of a contract entered into and |
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substantially performed before 24 March 2011, or |
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(b) | which is effected in pursuance of a contract entered into before 24 |
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March 2011 and which is not excluded by sub-paragraph (4). |
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(3) | The amendments do not have effect in relation to any notional transaction |
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under section 75A of FA 2003 if any scheme transaction— |
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(a) | is completed before 24 March 2011, |
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(b) | is effected in pursuance of a contract entered into and substantially |
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performed before 24 March 2011, or |
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(c) | is effected in pursuance of a contract entered into before 24 March |
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2011 and is not excluded by sub-paragraph (4). |
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(4) | A transaction effected in pursuance of a contract entered into before 24 |
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March 2011 is excluded by this sub-paragraph if— |
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(a) | there is any variation of the contract, or assignment of rights under |
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the contract, on or after 24 March 2011, |
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(b) | the transaction is effected in consequence of the exercise on or after |
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24 March 2011 of any option, right of pre-emption or similar right, or |
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(c) | on or after 24 March 2011, there is an assignment, sub-sale or other |
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transaction relating to the whole or part of the subject-matter of the |
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contract as a result of which a person other than the purchaser under |
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the contract becomes entitled to call for a conveyance. |
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(5) | Terms used in this paragraph have the same meaning as in Part 4 of FA 2003. |
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6 (1) | The amendments made by paragraph 3 are treated as having come into force |
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(2) | But those amendments— |
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(a) | do not have effect for the purposes of any of sections 71A to 73B of |
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FA 2003 (other than those provisions mentioned in paragraph (b) |
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below) if the arrangements referred to in section 71A(1), 72(1), 72A(1) |
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or 73(1) (as the case may be) were entered into before 24 March 2011, |
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(b) | do not have effect for the purposes of section 71A(2)(b), 72(2)(b), |
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72A(2)(b) or 73(2)(b) of that Act if the arrangements referred to there |
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were entered into before 24 March 2011. |
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Transfers involving multiple dwellings |
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1 | Part 4 of FA 2003 (stamp duty land tax) is amended as follows. |
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2 | After section 58C insert— |
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“58D | Transfers involving multiple dwellings |
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(1) | Schedule 6B provides for relief in the case of transfers involving |
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(2) | Any relief under that Schedule must be claimed in a land transaction |
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return or an amendment of such a return.” |
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3 | After Schedule 6A insert— |
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Transfers involving multiple dwellings |
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1 | This Schedule is arranged as follows— |
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(a) | paragraph 2 identifies the transactions to which this |
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(b) | paragraph 3 defines key terms, |
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(c) | paragraphs 4 and 5 describe the relief available if a claim is |
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(d) | paragraph 6 provides for adjustments if circumstances |
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change after a claim is made, and |
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(e) | paragraph 7 contains rules for determining what counts as |
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Transactions to which this Schedule applies |
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2 (1) | This Schedule applies to a chargeable transaction that is— |
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(a) | within sub-paragraph (2) or sub-paragraph (3), and |
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(b) | not excluded by sub-paragraph (4). |
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(2) | A transaction is within this sub-paragraph if its main subject- |
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(a) | an interest in at least two dwellings, or |
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(b) | an interest in at least two dwellings and other property. |
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(3) | A transaction is within this sub-paragraph if— |
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(a) | its main subject-matter consists of— |
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(i) | an interest in a single dwelling, or |
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(ii) | an interest in a single dwelling and other property, |
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(b) | it is one of a number of linked transactions, and |
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(c) | the main subject-matter of at least one of the other linked |
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transactions consists of— |
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(i) | an interest in some other dwelling or dwellings, or |
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(ii) | an interest in some other dwelling or dwellings and |
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(4) | A transaction is excluded by this sub-paragraph if— |
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(a) | section 74 or 75 applies to it, or |
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(b) | relief under Schedule 7 or Schedule 8 is available for it or |
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would be available for it on the making of a claim or has |
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(5) | A reference in this Schedule to an interest in a dwelling is to any |
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chargeable interest in or over a dwelling. |
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(6) | But, in the case of a dwelling subject to a lease granted for an initial |
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term of more than 21 years, any interest that is a superior interest |
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in relation to the lease is to be ignored in determining whether a |
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transaction is a relevant transaction. |
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3 (1) | A chargeable transaction to which this Schedule applies is referred |
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to in this Schedule as a “relevant transaction”. |
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(2) | A relevant transaction is a “single dwelling transaction” if its main |
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subject-matter consists of— |
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(a) | an interest in a single dwelling, or |
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(b) | an interest in a single dwelling and other property. |
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(3) | In relation to such a transaction, the single dwelling is referred to |
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(4) | A relevant transaction is a “multiple dwelling transaction” if its |
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main subject-matter consists of— |
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(a) | an interest in at least two dwellings, or |
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(b) | an interest in at least two dwellings and other property. |
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(5) | In relation to such a transaction, those dwellings are referred to as |
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4 (1) | If relief under this Schedule is claimed for a relevant transaction, |
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the amount of tax chargeable in respect of the transaction is— |
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(a) | a percentage of the consideration attributable to dwellings, |
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(b) | a percentage of the remaining consideration (if any). |
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(2) | “The consideration attributable to dwellings” is— |
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(a) | for a single dwelling transaction, so much of the |
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chargeable consideration for the transaction as is |
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attributable to the dwelling, |
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(b) | for a multiple dwelling transaction, so much of the |
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chargeable consideration for the transaction as is |
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attributable to the dwellings in total. |
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(3) | “The remaining consideration” is the chargeable consideration for |
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the transaction less the consideration attributable to dwellings. |
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(4) | The percentages are determined in accordance with paragraph 5. |
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(5) | If the whole or part of the chargeable consideration for a relevant |
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transaction is rent, sub-paragraph (1) has effect subject to section |
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(6) | “Attributable” means attributable on a just and reasonable basis. |
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5 (1) | For the purposes of paragraph 4(1)(a), the percentage is the |
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percentage that would be applied under section 55 if— |
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(a) | the relevant land consisted entirely of residential property, |
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(b) | the relevant consideration were the fraction produced by |
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dividing total dwellings consideration by total dwellings. |
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(2) | But if that percentage turns out to be 0%, the percentage for the |
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purposes of paragraph 4(1)(a) is 1%. |
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(3) | For a transaction that is not one of a number of linked transactions, |
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“total dwellings consideration” is the consideration attributable to |
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dwellings for that transaction (see paragraph 4(2)). |
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(4) | For one of a number of linked transactions, “total dwellings |
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(a) | the total of the consideration attributable to dwellings for |
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that transaction and all the other linked transactions that |
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are relevant transactions, plus |
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(b) | so much of the chargeable consideration for any of the |
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linked transactions (whether or not relevant transactions) |
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as is not included in the calculation under paragraph (a) |
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but is attributable to the same dwellings by reference to |
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which that calculation is made. |
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(5) | “Total dwellings” is the total number of dwellings by reference to |
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which total dwellings consideration is calculated. |
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(6) | In the application of sub-paragraph (1), no account is to be taken |
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(b) | paragraph 9A(4) of Schedule 5. |
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(7) | For the purposes of paragraph 4(1)(b), the percentage is the |
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percentage that (but for this Schedule) would be applied under |
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section 55 to the chargeable consideration for the transaction. |
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Adjustment for change of circumstances |
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6 (1) | This paragraph applies if— |
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(a) | relief under this Schedule is claimed for a relevant |
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(b) | an event occurs in the relevant period, and |
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(c) | had the event occurred immediately before the effective |
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(i) | the transaction would not have been a relevant |
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transaction or the percentage applied by virtue of |
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paragraph 4(1)(a) would have been higher, and |
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(ii) | more tax would have been payable in respect of the |
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(2) | If this paragraph applies, tax is chargeable on the transaction as if |
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the event had occurred immediately before the effective date of |
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(a) | the purchaser must make a return to Her Majesty’s |
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Revenue and Customs before the end of the period of 30 |
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days beginning with the date of the event, |
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(b) | the return must contain a self-assessment of the tax |
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chargeable in respect of the transaction on the basis of the |
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information contained in the return, |
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(c) | the tax so chargeable is to be calculated by reference to the |
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rates in force at the effective date of the transaction, and |
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(d) | the additional tax payable must be paid not later than the |
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filing date for the return. |
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(4) | The provisions of section 78A and Schedule 10 apply to a return |
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under this paragraph as they apply to a return under section 76, |
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but with references in Schedule 10 to the effective date of the |
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transaction being read as references to the date of the event. |
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(5) | “The relevant period” means the shorter of— |
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(a) | the period of 3 years beginning with the effective date of |
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(b) | the period beginning with the effective date of the |
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transaction and ending with the date on which the |
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purchaser disposes of the dwelling, or the dwellings, to a |
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person who is not connected with the purchaser. |
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(6) | In relation to a transaction effected on completion of a contract |
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that was substantially performed before completion, sub- |
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paragraph (5) applies as if references to the effective date of the |
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transaction were to the date on which the contract was |
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“contract” includes any agreement (including, in the case of |
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Scotland, missives of let not constituting a lease); |
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“completion” has the same meaning as in section 44; |
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“event” includes any change of circumstance or change of |
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“substantially performed” has the same meaning as in section |
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(8) | Section 1122 of the Corporation Tax Act 2010 (connected persons) |
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has effect for the purposes of this paragraph. |
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What counts as a dwelling |
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7 (1) | This paragraph sets out rules for determining what counts as a |
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dwelling for the purposes of this Schedule. |
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(2) | A building or part of a building counts as a dwelling if— |
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(a) | it is used or suitable for use as a single dwelling, or |
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(b) | it is in the process of being constructed or adapted for such |
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(3) | Land that is, or is to be, occupied or enjoyed with a dwelling as a |
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garden or grounds (including any building or structure on such |
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land) is taken to be part of that dwelling. |
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(4) | Land that subsists, or is to subsist, for the benefit of a dwelling is |
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taken to be part of that dwelling. |
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(5) | The main subject-matter of a transaction is also taken to consist of |
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or include an interest in a dwelling if— |
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(a) | substantial performance of a contract constitutes the |
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effective date of that transaction by virtue of a relevant |
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(b) | the main subject-matter of the transaction consists of or |
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includes an interest in a building, or a part of a building, |
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that is to be constructed or adapted under the contract for |
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use as a single dwelling, and |
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(c) | construction or adaptation of the building, or the part of a |
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building, has not begun by the time the contract is |
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(6) | In sub-paragraph (5)— |
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“contract” includes any agreement (including, in the case of |
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Scotland, missives of let not constituting a lease); |
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“relevant deeming provision” means any of sections 44 to |
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45A or paragraph 12A or 19(3) of Schedule 17A; |
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“substantially performed” has the same meaning as in section |
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(7) | Subsections (2) to (5) of section 116 apply for the purposes of this |
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paragraph as they apply for the purposes of subsection (1)(a) of |
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Other amendments of Part 4 FA 2003 |
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4 | In section 57 of FA 2003 (disadvantaged areas relief), insert at the end— |
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“(3) | Relief is not available under that Schedule in the case of any |
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transaction for which relief under Schedule 6B is claimed.” |
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5 | In section 87(3) of that Act (interest on unpaid tax), after paragraph (a) |
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“(aza) | in the case of an amount payable by virtue of paragraph 6 of |
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Schedule 6B (adjustment for change of circumstances), the |
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6 | In paragraph 9 of Schedule 5 to that Act (amount of tax chargeable: rent)— |
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