Office of Public Sector Information
PART 4 continued
(2) The first transaction is exempt from charge if the vendor is—
(a) the individual concerned, or
(b) another financial institution by whom the interest was acquired under other arrangements of the kind mentioned in section 72(1) entered into between it and the individual.
(3) The second transaction is exempt from charge if the financial institution complies with the provisions of this Part relating to the first transaction (including the payment of any tax chargeable).
(4) This section does not apply if—
(a) the individual enters into the arrangements as trustee and any beneficiary of the trust is not an individual, or
(b) the individual enters into the arrangements as partner and any of the other partners is not an individual.
(5) In this section—
(a) “financial institution” has the same meaning as in section 72;
(b) “legal mortgage”—
(i) in relation to land in England or Wales, means a legal mortgage as defined in section 205(1)(xvi) of the Law of Property Act 1925 (c. 20);
(ii) in relation to land in Scotland, means a standard security;
(iii) in relation to land in Northern Ireland, means a mortgage by conveyance of a legal estate or by demise or sub-demise or a charge by way of legal mortgage.
(6) References in this section to an individual shall be read, in relation to times after the death of the individual concerned, as references to his personal representatives.
(1) This section applies where a chargeable transaction is entered into by an RTE company in pursuance of a right of collective enfranchisement.
(2) In that case, the rate of tax is determined by reference to the fraction of the relevant consideration produced by dividing the total amount of that consideration by the number of flats in respect of which the right of collective enfranchisement is being exercised.
(3) The tax chargeable is then determined by applying that rate to the chargeable consideration for the transaction.
(4) In this section—
(a) “RTE company” has the meaning given by section 4A of the Leasehold Reform, Housing and Urban Development Act 1993 (c. 28);
(b) “right of collective enfranchisement” means the right exercisable by an RTE company under—
(i) Part 1 of the Landlord and Tenant Act 1987 (c. 31), or
(ii) Chapter 1 of Part 1 of the Leasehold Reform, Housing and Urban Development Act 1993 (c. 28); and
(c) “flat” has the same meaning as in the Act conferring the right of collective enfranchisement.
(5) References in this section to the relevant consideration have the same meaning as in section 55.
(1) This section applies where—
(a) a chargeable transaction is entered into in pursuance of the crofting community right to buy, and
(b) under that transaction two or more crofts are being bought.
(2) In that case, the rate of tax is determined by reference to the fraction of the relevant consideration produced by dividing the total amount of that consideration by the number of crofts being bought.
(3) The tax chargeable is then determined by applying that rate to the amount of the chargeable consideration for the transaction in question.
(4) In this section “crofting community right to buy” means the right exercisable by a crofting community body under Part 3 of the Land Reform (Scotland) Act 2003 (asp 2).
(5) References in this section to the relevant consideration have the same meaning as in section 55.
(1) In the case of every notifiable transaction the purchaser must deliver a return (a “land transaction return”) to the Inland Revenue before the end of the period of 30 days after the effective date of the transaction.
(2) The Inland Revenue may by regulations amend subsection (1) so as to require a land transaction return to be delivered before the end of such shorter period after the effective date of the transaction as may be prescribed or, if the regulations so provide, on that date.
(3) A land transaction return in respect of a chargeable transaction must—
(a) include an assessment (a “self-assessment”) of the tax that, on the basis of the information contained in the return, is chargeable in respect of the transaction, and
(b) be accompanied by payment of the amount chargeable.
(1) This section specifies what land transactions are notifiable.
(2) The grant of a lease is notifiable if—
(a) the lease is for a contractual term of seven years or more and is granted for chargeable consideration, or
(b) the lease is for a contractual term of less than seven years and either—
(i) the chargeable consideration consists or includes a premium in respect of which tax is chargeable at a rate of 1% or higher, or
(ii) the chargeable consideration consists of or includes rent in respect of which tax is chargeable at a rate of 1% or higher,
or, in either case, in respect of which tax would be so chargeable but for a relief.
(3) Any other acquisition of a major interest in land is notifiable unless it is exempt from charge under Schedule 3.
(4) An acquisition of a chargeable interest other than a major interest in land is notifiable if there is chargeable consideration in respect of which tax is chargeable at a rate of 1% or higher, or in respect of which tax would be so chargeable but for a relief.
(1) Schedule 10 has effect with respect to land transaction returns, assessments and related matters.
(2) In that Schedule—
Part 1 contains general provisions about returns;
Part 2 imposes a duty to keep and preserve records;
Part 3 makes provision for enquiries into returns;
Part 4 provides for a Revenue determination if no return is delivered;
Part 5 provides for Revenue assessments;
Part 6 provides for relief in case of excessive assessment; and
Part 7 provides for appeals against Revenue decisions on tax.
(3) The Treasury may by regulations make such amendments of that Schedule, and such consequential amendments of any other provisions of this Part, as appear to them to be necessary or expedient from time to time.
(1) A land transaction to which this section applies, or (as the case may be) a document effecting or evidencing a land transaction to which this section applies, shall not be registered, recorded or otherwise reflected in an entry made—
(a) in England and Wales, in the register of title maintained by the Chief Land Registrar,
(b) in Scotland, in any register maintained by the Keeper of the Registers of Scotland, or
(c) in Northern Ireland, in any register maintained by the Land Registry of Northern Ireland or in the Registry of Deeds for Northern Ireland,
unless there is produced, together with the relevant application, a certificate as to compliance with the requirements of this Part in relation to the transaction.
This does not apply where the entry is required to be made without any application or so far as the entry relates to an interest or right other than the chargeable interest acquired by the purchaser under the land transaction that gives rise to the application.
(2) This section applies to every land transaction other than—
(a) a contract for a land transaction under which the transaction is to be completed by a conveyance, or
(b) a transfer of rights (within the meaning of section 45) under such a contract.
In this subsection “contract” includes any agreement and “conveyance” includes any instrument.
(3) The certificate must be either—
(a) a certificate by the Inland Revenue (a “Revenue certificate”) that a land transaction return has been delivered in respect of the transaction, or
(b) a certificate by the purchaser (a “self-certificate”) that no land transaction return is required in respect of the transaction.
(4) The Inland Revenue may make provision by regulations about Revenue certificates.
The regulations may, in particular—
(a) make provision as to the conditions to be met before a certificate is issued;
(b) prescribe the form and content of the certificate;
(c) make provision about the issue of duplicate certificates if the original is lost or destroyed;
(d) provide for the issue of multiple certificates where a return is made relating to more than one transaction.
(5) Schedule 11 makes further provision about self-certificates.
In that Schedule—
Part 1 contains general provisions,
Part 2 imposes a duty to keep and preserve records, and
Part 3 makes provision for enquiries into self-certificates.
(6) The registrar (in Scotland, the Keeper of the Registers of Scotland)—
(a) shall allow the Inland Revenue to inspect any certificates or self-certificates produced to him under this section and in his possession, and
(b) may enter into arrangements for affording the Inland Revenue other information and facilities for verifying that the requirements of this Part have been complied with.
(1) Where section 51 (contingent, uncertain or unascertained consideration) applies in relation to a transaction and—
(a) in the case of contingent consideration, the contingency occurs or it becomes clear that it will not occur, or
(b) in the case of uncertain or unascertained consideration, an amount relevant to the calculation of the consideration, or any instalment of consideration, becomes ascertained,
the following provisions have effect to require or permit reconsideration of how this Part applies to the transaction (and to any transaction in relation to which it is a linked transaction).
(2) If the effect of the new information is that a transaction becomes notifiable or chargeable, or that additional tax is payable in respect of a transaction or that tax is payable where none was payable before—
(a) the purchaser must make a return to the Inland Revenue within 30 days,
(b) the return must contain a self-assessment of the tax chargeable in respect of the transaction on the basis of the information contained in the return,
(c) the tax so chargeable is to be calculated by reference to the rates in force at the effective date of the transaction, and
(d) the return must be accompanied by payment of the tax or additional tax payable.
(3) The provisions of Schedule 10 (returns, enquiries, assessments and other matters) apply to a return under this section as they apply to a land transaction return.
(4) If the effect of the new information is that less tax is payable in respect of a transaction than has already been paid, the amount overpaid shall on a claim by the purchaser be repaid together with interest as from the date of payment.
(1) Where relief is withdrawn to any extent under—
(a) Part 1 of Schedule 7 (group relief),
(b) Part 2 of that Schedule (reconstruction or acquisition relief), or
(c) Schedule 8 (charities relief),
the purchaser must deliver a further return before the end of the period of 30 days after the date on which the disqualifying event occurred.
(2) The return must—
(a) include a self-assessment of the amount of tax chargeable, and
(b) be accompanied by payment of the tax chargeable.
(3) The provisions of Schedule 10 (returns, assessments and other matters) apply to a return under this section as they apply to a land transaction return, with the following adaptations—
(a) references to the transaction to which the return relates shall be read as references to the disqualifying event;
(b) references to the effective date of the transaction shall be read as references to the date on which the disqualifying event occurs.
(4) In this section “the disqualifying event” means—
(a) in relation to the withdrawal of group relief, the purchaser ceasing to be a member of the same group as the vendor within the meaning of Part 1 of Schedule 7;
(b) in relation to the withdrawal of reconstruction or acquisition relief, the change of control of the acquiring company mentioned in paragraph 9(1)(a) of Schedule 7 or, as the case may be, the event mentioned in paragraph 11(1)(a) or (2)(a) of that Schedule;
(c) in relation to the withdrawal of charities relief, a disqualifying event as defined in paragraph 2(3) of Schedule 8.
(1) This section applies where—
(a) a return delivered to the Inland Revenue, or
(b) any other document relating to tax made by or provided to the Inland Revenue,
has been lost or destroyed, or been so defaced or damaged as to be illegible or otherwise useless.
(2) The Inland Revenue may treat the return as not having been delivered or the document as not having been made or provided.
(3) Anything done on that basis shall be as valid and effective for all purposes as it would have been if the return had not been made or the document had not been made or provided.
(4) But if as a result a person is charged with tax and he proves to the satisfaction of the General or Special Commissioners having jurisdiction in the case that he has already paid tax in respect of the transaction in question, relief shall be given, by reducing the charge or by repayment as the case may require.
(1) An assessment, determination, notice or other document required to be used in assessing, charging, collecting and levying tax or determining a penalty under this Part must be in accordance with the forms prescribed from time to time by the Board and a document in the form so prescribed and supplied or approved by the Board is valid and effective.
(2) Any such assessment, determination, notice or other document purporting to be made under this Part is not ineffective—
(a) for want of form, or
(b) by reason of any mistake, defect or omission in it,
if it is substantially in conformity with this Part and its intended effect is reasonably ascertainable by the person to whom it is directed.
(3) The validity of an assessment or determination is not affected—
(a) by any mistake in it as to—
(i) the name of a person liable, or
(ii) the amount of the tax charged, or
(b) by reason of any variance between the notice of assessment or determination and the assessment or determination itself.
(1) A notice or other document to be served under this Part on a person may be delivered to him or left at his usual or last known place of abode.
(2) A notice or other document to be given, served or delivered under this Part may be served by post.
(3) For the purposes of section 7 of the Interpretation Act 1978 (c. 30) (general provisions as to service by post) any such notice or other document to be given or delivered to, or served on, any person by the Inland Revenue is properly addressed if it is addressed to that person—
(a) in the case of an individual, at his usual or last known place of residence or his place of business;
(b) in the case of a company—
(i) at its principal place of business,
(ii) if a liquidator has been appointed, at his address for the purposes of the liquidation, or
(iii) at any place prescribed by regulations made by the Inland Revenue.
(1) The purchaser is liable to pay the tax in respect of a chargeable transaction.
(2) As to the liability of purchasers acting jointly see—
section 103(2)(c) (joint purchasers);
Part 2 of Schedule 15 (partners); and
paragraph 5 of Schedule 16 (trustees).
(1) Tax payable in respect of a land transaction must be paid at the same time that a land transaction return is made in respect of the transaction.
(2) Tax payable as a result of the withdrawal of relief under—
(a) Part 1 of Schedule 7 (group relief),
(b) Part 2 of that Schedule (reconstruction or acquisition relief), or
(c) Schedule 8 (charities relief),
must be paid at the same time that a return is made in respect of the withdrawal (see section 81).
(3) Tax payable as a result of the amendment of a return must be paid forthwith or, if the amendment is made before the filing date for the return, not later than that date.
(4) Tax payable in accordance with a determination or assessment by the Inland Revenue must be paid within 30 days after the determination or assessment is issued.
(5) The above provisions are subject to—
(a) section 90 (application to defer payment of tax in case of contingent or uncertain consideration), and
(b) paragraphs 39 and 40 of Schedule 10 (postponement of payment pending determination of appeal).
(6) This section does not affect the date from which interest is payable (as to which, see section 87).
(1) Interest is payable on the amount of any unpaid tax from the end of the period of 30 days after the relevant date until the tax is paid.
(2) The Inland Revenue may by regulations amend subsection (1) so as to make interest run from the end of such shorter period after the relevant date as may be prescribed or, if the regulations so provide, from that date.
(3) For the purposes of this section “the relevant date” is—
(a) in the case of an amount payable because relief is withdrawn under—
(i) Part 1 of Schedule 7 (group relief),
(ii) Part 2 of that Schedule (reconstruction or acquisition relief), or
(iii) Schedule 8 (charities relief),
the date of the disqualifying event;
(b) in the case of a deferred payment under section 90, the date when the deferred payment is due;
(c) in any other case, the effective date of the transaction.
(4) In subsection (3)(a) “the disqualifying event” means—
(a) in relation to the withdrawal of group relief, the purchaser ceasing to be a member of the same group as the vendor (within the meaning of Part 1 of Schedule 7);
(b) in relation to the withdrawal of reconstruction or acquisition relief, the change of control of the acquiring company mentioned in paragraph 9(1)(a) of that Schedule or, as the case may be, the event mentioned in paragraph 11(1)(a) or (2)(a) of that Schedule;
(c) in relation to the withdrawal of charities relief, a disqualifying event as defined in paragraph 2(3) of Schedule 8.
(5) Subsection (3)(c) applies in a case within section 51 (contingent, uncertain or unascertained consideration) if payment is not deferred under section 90, with the result that interest on any tax payable under section 80 (adjustment where contingency ceases or consideration is ascertained) runs from the effective date of the transaction.
(6) If an amount is lodged with the Inland Revenue in respect of the tax, the amount on which interest is payable is reduced by that amount.
(7) Interest is calculated at the rate applicable under section 178 of the Finance Act 1989 (c. 26) (power of Treasury to prescribe rates of interest).
A penalty under this Part shall carry interest at the rate applicable under section 178 of the Finance Act 1989 from the date it is determined until payment.
(1) A repayment by the Inland Revenue to which this section applies shall be made with interest at the rate applicable under section 178 of the Finance Act 1989 for the period between the relevant time (as defined below) and the date when the order for repayment is issued.
(2) This section applies to—
(a) any repayment of tax, and
(b) any repayment of a penalty under this Part.
In that case the relevant time is the date on which the payment of tax or penalty was made.
(3) This section also applies to a repayment by the Inland Revenue of an amount lodged with them in respect of the tax payable in respect of a transaction.
In that case the relevant time is the date on which the amount was lodged with them.
(4) No interest is payable under this section in respect of a payment made in consequence of an order or judgment of a court having power to allow interest on the payment.
(5) Interest paid to any person under this section is not income of that person for any tax purposes.
(1) The purchaser may apply to the Inland Revenue to defer payment of tax in a case where the amount payable depends on the amount or value of chargeable consideration that—
(a) at the effective date of the transaction is contingent or uncertain, and
(b) falls to be paid or provided on one or more future dates of which at least one falls, or may fall, more than six months after the effective date of the transaction.
(2) The Inland Revenue may make provision by regulations for carrying this section into effect.
(3) The regulations may in particular—
(a) specify when an application is to be made;
(b) impose requirements as to the form and contents of an application;
(c) require the applicant to provide such information as the Inland Revenue may reasonably require for the purposes of determining whether to accept an application;
(d) specify the grounds on which an application may be refused;
(e) specify the procedure for reaching a decision on an application;
(f) make provision for postponing payment of tax when an application has been made;
(g) provide for an appeal to the General or Special Commissioners against a refusal to accept an application, and make provision in relation to such an appeal corresponding to any provision made in relation to appeals under Part 7 of Schedule 10 (appeals against Revenue decisions on tax);
(h) provide for the effect of accepting an application;
(i) require the purchaser to make a return or further return, and to make such payments or further payments of tax as may be specified, in such circumstances as may be specified.
(4) The provisions of Schedule 10 (returns, enquiries, assessments and other matters) apply to a return under this section as they apply to a land transaction return.
(5) An application under this section does not affect the purchaser’s obligations as regards payment of tax in respect of chargeable consideration that has already been paid or provided or is not contingent and whose amount is ascertained or ascertainable at the time the application is made.
This applies as regards both the time of payment and the calculation of the amount payable.
(6) Regulations under this section may provide that where—
(a) a payment is made as mentioned in subsection (5), and
(b) an application under this section is accepted in respect of other chargeable consideration taken into account in calculating the amount of that payment,
section 80 (adjustment where contingency ceases or consideration is ascertained) does not apply in relation to the payment and, instead, any necessary adjustment shall be made in accordance with the regulations.
(1) The provisions of Schedule 12 have effect with respect to the collection and recovery of tax.
In that Schedule—
Part 1 contains general provisions, and
Part 2 relates to court proceedings.
(2) The provisions of that Schedule have effect in relation to the collection and recovery of any unpaid amount by way of—
(a) penalty under this Part, or
(b) interest under this Part (on unpaid tax or penalty),
as if it were an amount of unpaid tax.
For the purposes of this Part where—
(a) payment to the Inland Revenue is made by cheque, and
(b) the cheque is paid on its first presentation to the banker on whom it is drawn,
the payment is treated as made on the day on which the cheque was received by the Inland Revenue.
(1) Schedule 13 has effect with respect to the powers of the Inland Revenue to call for documents and information for the purposes of stamp duty land tax.
(2) In that Schedule—
Part 1 confers power on an authorised officer to call for documents or information from the taxpayer;
Part 2 confers power on an authorised officer to call for documents from a third party;
Part 3 confers power on an authorised officer to call for the papers of a tax accountant;
Part 4 imposes restrictions on the powers under Parts 1 to 3;
Part 5 confers powers on the Board to call for documents or information;
Part 6 provides for an order of a judicial authority for the delivery of documents;
Part 7 provides for entry with a warrant to obtain evidence of an offence;
Part 8 relates to falsification etc of documents.
(3) A person who is required by a notice under Part 1, 2 or 3 of Schedule 13 to deliver a document or to provide information, or to make a document available for inspection, and who fails to comply with the notice is liable to a penalty not exceeding £300.
(4) If the failure continues after a penalty has been imposed under subsection (3), he is liable to a further penalty or penalties not exceeding £60 for each day on which the failure continues after the day on which the penalty under that subsection was imposed (but excluding any day for which a penalty under this subsection has already been imposed).
(5) No penalty shall be imposed under subsection (3) or (4) in respect of a failure at any time after the failure has been remedied.
(6) A person who is required by a notice under Part 1, 2 or 3 of Schedule 13 to deliver a document or to provide information, or to make a document available for inspection, and who fraudulently or negligently delivers, provides or makes available any incorrect document or information is liable to a penalty not exceeding £3,000.
(1) If for the purposes of this Part the Board authorise an officer of theirs to inspect any property for the purpose of ascertaining its market value, or any other matter relevant for the purposes of this Part, the person having custody or possession of the property shall permit the officer so authorised to inspect it at such reasonable times as the Board may consider necessary.
(2) A person who wilfully delays or obstructs an officer of the Board acting in pursuance of this section commits an offence and is liable on summary conviction to a fine not exceeding level 1 on the standard scale.
(1) A person commits an offence if he is knowingly concerned in the fraudulent evasion of tax by him or any other person.
(2) A person guilty of an offence under this section is liable—
(a) on summary conviction to imprisonment for a term not exceeding six months or a fine not exceeding the statutory maximum, or both;
(b) on conviction on indictment, to imprisonment for a term not exceeding seven years or a fine, or both.
A person who assists in or induces the preparation or delivery of any information, return or other document that—
(a) he knows will be, or is likely to be, used for any purpose of tax, and
(b) he knows to be incorrect,
is liable to a penalty not exceeding £3,000.
Finance Act 2003