SCHEDULE 39 continued PART 2 continued
(3) Where the conditions in sub-paragraph (2)(a) to (d) are met, but the area of land acquired by the property trader exceeds the permitted area, the chargeable consideration for the acquisition is taken to be the amount calculated by deducting the market value of the permitted area from the market value of the old dwelling.
(4) The provisions of paragraph 1(4) (meaning of “house-building company” etc) also have effect for the purposes of this paragraph.
(5) In this paragraph—
(a) references to the acquisition of a new dwelling are to the acquisition, by way of grant or transfer, of a major interest in the dwelling;
(b) references to the acquisition of the old dwelling are to the acquisition, by way of transfer, of a major interest in the dwelling; and
(c) references to the market value of the old dwelling and of the permitted area are, respectively, to the market value of that major interest in the dwelling and of that interest so far as it relates to that area.
3 (1) Where a dwelling is acquired by a property trader from the personal representatives of a deceased individual, the acquisition is exempt from charge if the following conditions are met.
(2) The conditions are—
(a) that the acquisition is made in the course of a business that consists of or includes acquiring dwellings from personal representatives of deceased individuals,
(b) that the deceased individual occupied the dwelling as his only or main residence at some time in the period of two years ending with the date of his death,
(c) that the property trader does not intend—
(i) to spend more than the permitted amount on refurbishment of the dwelling, or
(ii) to grant a lease or licence of the dwelling, or
(iii) to permit any of its principals or employees (or any person connected with any of its principals or employees) to occupy the dwelling, and
(d) that the area of land acquired does not exceed the permitted area.
(3) Where the conditions in sub-paragraph (2)(a) to (c) are met, but the area of land acquired exceeds the permitted area, the chargeable consideration for the acquisition is taken to be the amount calculated by deducting the market value of the permitted area from the market value of the dwelling.
(4) In this paragraph—
(a) references to the acquisition of the dwelling are to the acquisition, by way of transfer, of a major interest in the dwelling; and
(b) references to the market value of the dwelling and of the permitted area are, respectively, to the market value of that major interest in the dwelling and of that interest so far as it relates to that area.
4 (1) Where a dwelling (“the old dwelling”) is acquired by a property trader from an individual (whether alone or with other individuals), the acquisition is exempt from charge if—
(a) the individual has made arrangements to sell a dwelling (“the old dwelling”) and acquire another dwelling (“the second dwelling”),
(b) the arrangements to sell the old dwelling fail, and
(c) the acquisition of the old dwelling is made for the purpose of enabling the individual’s acquisition of the second dwelling to proceed,
and the following conditions are met.
(2) The conditions are—
(a) that the acquisition is made in the course of a business that consists of or includes acquiring dwellings from individuals in those circumstances,
(b) that the individual—
(i) occupied the old dwelling as his only or main residence at some time in the period of two years ending with the date of its acquisition, and
(ii) intends to occupy the second dwelling as his only or main residence,
(c) that the property trader does not intend—
(i) to spend more than the permitted amount on refurbishment of the old dwelling, or
(ii) to grant a lease or licence of the old dwelling, or
(iii) to permit any of its principals or employees (or any person connected with any of its principals or employees) to occupy the old dwelling, and
(d) that the area of land acquired does not exceed the permitted area.
Paragraph (c)(ii) does not apply to the grant of a lease or licence to the individual for a period of no more than six months.
(3) Where the conditions in sub-paragraph (2)(a) to (c) are met, but the area of land acquired exceeds the permitted area, the chargeable consideration for the acquisition is taken to be the amount calculated by deducting the market value of the permitted area from the market value of the old dwelling.
(4) In this paragraph—
(a) references to the acquisition of the second dwelling are to the acquisition, by way of grant or transfer, of a major interest in the dwelling;
(b) references to the acquisition of the old dwelling are to the acquisition, by way of transfer, of a major interest in the dwelling; and
(c) references to the market value of the old dwelling and of the permitted area are, respectively, to the market value of that major interest in the dwelling and of that interest so far as it relates to that area.
5 (1) Where a dwelling is acquired from an individual (whether alone or with other individuals) by his employer, the acquisition is exempt from charge if the following conditions are met.
(2) The conditions are—
(a) that the individual occupied the dwelling as his only or main residence at some time in the period of two years ending with the date of the acquisition,
(b) that the acquisition is made in connection with a change of residence by the individual resulting from relocation of employment,
(c) that the consideration for the acquisition does not exceed the market value of the dwelling, and
(d) that the area of land acquired does not exceed the permitted area.
(3) Where the conditions in sub-paragraph (2)(a) to (c) are met but the area of land acquired exceeds the permitted area, the chargeable consideration for the acquisition is taken to be the amount calculated by deducting the market value of the permitted area from the market value of the dwelling.
(4) In this paragraph “relocation of employment” means a change of the individual’s place of employment due to—
(a) his becoming an employee of the employer,
(b) an alteration of the duties of his employment with the employer, or
(c) an alteration of the place where he normally performs those duties.
(5) For the purposes of this paragraph a change of residence is one “resulting from” relocation of employment if—
(a) the change is made wholly or mainly to allow the individual to have his residence within a reasonable daily travelling distance of his new place of employment, and
(b) his former residence is not within a reasonable daily travelling distance of that place.
The individual’s “new place of employment” means the place where he normally performs, or is normally to perform, the duties of his employment after the relocation.
(6) In this paragraph—
(a) references to the acquisition of the dwelling are to the acquisition, by way of transfer, of a major interest in the dwelling;
(b) references to the market value of the dwelling and of the permitted area are, respectively, to the market value of that major interest in the dwelling and of that interest so far as it relates to that area; and
(c) references to an individual’s employer include a prospective employer.
6 (1) Where a dwelling is acquired by a property trader from an individual (whether alone or with other individuals), the acquisition is exempt from charge if the following conditions are met.
(2) The conditions are—
(a) that the acquisition is made in the course of a business that consists of or includes acquiring dwellings from individuals in connection with a change of residence resulting from relocation of employment,
(b) that the individual occupied the dwelling as his only or main residence at some time in the period of two years ending with the date of the acquisition,
(c) that the acquisition is made in connection with a change of residence by the individual resulting from relocation of employment,
(d) that the consideration for the acquisition does not exceed the market value of the dwelling,
(e) that the property trader does not intend—
(i) to spend more than the permitted amount on refurbishment of the dwelling, or
(ii) to grant a lease or licence of the dwelling, or
(iii) to permit any of its principals or employees (or any person connected with any of its principals or employees) to occupy the dwelling, and
(f) that the area of land acquired does not exceed the permitted area.
Paragraph (e)(ii) does not apply to the grant of a lease or licence to the individual for a period of no more than six months.
(3) Where the conditions in sub-paragraph (2)(a) to (e) are met but the area of land acquired exceeds the permitted area, the chargeable consideration for the acquisition is taken to be the amount calculated by deducting the market value of the permitted area from the market value of the dwelling.
(4) In this paragraph “relocation of employment” means a change of the individual’s place of employment due to—
(a) his becoming employed by a new employer,
(b) an alteration of the duties of his employment, or
(c) an alteration of the place where he normally performs those duties.
(5) For the purposes of this paragraph a change of residence is one “resulting from” relocation of employment if—
(a) the change is made wholly or mainly to allow the individual to have his residence within a reasonable daily travelling distance of his new place of employment, and
(b) his former residence is not within a reasonable daily travelling distance of that place.
An individual’s “new place of employment” means the place where he normally performs, or is normally to perform, the duties of his employment after the relocation.
(6) In this paragraph—
(a) references to the acquisition of the dwelling are to the acquisition, by way of transfer, of a major interest in the dwelling; and
(b) references to the market value of the dwelling and of the permitted area are, respectively, to the market value of that major interest in the dwelling and of that interest so far as it relates to that area.
7 (1) “Dwelling” includes land occupied and enjoyed with the dwelling as its garden or grounds.
(2) A building or part of a building is a “new dwelling” if—
(a) it has been constructed for use as a single dwelling and has not previously been occupied, or
(b) it has been adapted for use as a single dwelling and has not been occupied since its adaptation.
(3) “The permitted area”, in relation to a dwelling, means land occupied and enjoyed with the dwelling as its garden or grounds that does not exceed—
(a) an area (inclusive of the site of the dwelling) of 0.5 of a hectare, or
(b) such larger area as is required for the reasonable enjoyment of the dwelling as a dwelling having regard to its size and character.
(4) Where sub-paragraph (3)(b) applies, the permitted area is taken to consist of that part of the land that would be the most suitable for occupation and enjoyment with the dwelling as its garden or grounds if the rest of the land were separately occupied.
8 (1) A “property trader” means—
(a) a company,
(b) a limited liability partnership, or
(c) a partnership whose members are all either companies or limited liability partnerships,
that carries on the business of buying and selling dwellings.
(2) In relation to a property trader a “principal” means—
(a) in the case of a company, a director;
(b) in the case of a limited liability partnership, a member;
(c) in the case of a partnership whose members are all either companies or limited liability partnerships, a member or a person who is a principal of a member.
(3) For the purposes of this Schedule—
(a) anything done by or in relation to a company connected with a property trader is treated as done by or in relation to that property trader, and
(b) references to the principals or employees of a property trader include the principals or employees of any such company.
9 (1) “Refurbishment” of a dwelling means the carrying out of works that enhance or are intended to enhance the value of the dwelling, but does not include—
(a) cleaning the dwelling, or
(b) works required solely for the purpose of ensuring that the dwelling meets minimum safety standards.
(2) The “permitted amount”, in relation to the refurbishment of a dwelling, is—
(a) 10,000, or
(b) 5% of the consideration for the acquisition of the dwelling,
whichever is the greater, but subject to a maximum of £20,000.
10 Section 839 of the Taxes Act 1988 (connected persons) has effect for the purposes of this Schedule.
11 (1) Relief under this Schedule is withdrawn in the following circumstances.
(2) Relief under paragraph 2 (acquisition by property trader from individual acquiring new dwelling) is withdrawn if the property trader—
(a) spends more than the permitted amount on refurbishment of the old dwelling, or
(b) grants a lease or licence of the old dwelling, or
(c) permits any of its principals or employees (or any person connected with any of its principals or employees) to occupy the old dwelling.
Paragraph (b) does not apply to the grant of lease or licence to the individual for a period of no more than six months.
(3) Relief under paragraph 3 (acquisition by property trader from personal representatives) is withdrawn if the property trader—
(a) spends more than the permitted amount on refurbishment of the dwelling, or
(b) grants a lease or licence of the dwelling, or
(c) permits any of its principals or employees (or any person connected with any of its principals or employees) to occupy the dwelling.
(4) Relief under paragraph 4 (acquisition by property trader from individual where chain of transactions breaks down) is withdrawn if the property trader—
(a) spends more than the permitted amount on refurbishment of the old dwelling, or
(b) grants a lease or licence of the old dwelling, or
(c) permits any of its principals or employees (or any person connected with any of its principals or employees) to occupy the old dwelling.
Paragraph (b) does not apply to the grant of lease or licence to the individual for a period of no more than six months.
(5) Relief under paragraph 6 (acquisition by property trader in case of relocation of employment) is withdrawn if the property trader—
(a) spends more than the permitted amount on refurbishment of the dwelling, or
(b) grants a lease or licence of the dwelling, or
(c) permits any of its principals or employees (or any person connected with any of its principals or employees) to occupy the dwelling.
Paragraph (b) does not apply to the grant of lease or licence to the individual for a period of no more than six months.
(6) Where relief is withdrawn the amount of tax chargeable is the amount that would have been chargeable in respect of the acquisition but for the relief.”.
(3) In section 81 (further return where relief withdrawn)—
(a) in subsection (1) (obligation to deliver a further return), before paragraph (a) insert—
“(za) paragraph 11 of Schedule 6A (relief for certain acquisitions of residential property),”; and
(b) in subsection (4) (meaning of disqualifying event), before paragraph (a) insert—
“(za) in relation to the withdrawal of relief under Schedule 6A, an event mentioned in paragraph (a), (b) or (c) of paragraph 11(2), (3), (4) or (5) of that Schedule;”.
(4) In section 87 (interest on unpaid tax)—
(a) in subsection (3)(a) (relevant date where relief is withdrawn), before sub-paragraph (i) insert—
“(ia) Schedule 6A (relief for certain acquisitions of residential property),”; and
(b) in subsection (4) (meaning of disqualifying event), before paragraph (a) insert—
“(za) in relation to the withdrawal of relief under Schedule 6A an event mentioned in paragraph (a), (b) or (c) of paragraph 11(2), (3), (4) or (5) of that Schedule;”.
18 After section 64 insert—
(1) The acquisition of a chargeable interest by trustees of a unit trust scheme is exempt from charge if the following conditions are met.
(2) The conditions are that—
(a) immediately before the acquisition—
(i) there were no assets held by the trustees for the purposes of the scheme, and
(ii) there were no units of the scheme in issue,
(b) the only consideration for the acquisition is the issue of units in the scheme to the vendor, and
(c) immediately after the acquisition the vendor is the only unit holder of the scheme.”.
19 (1) After section 81 (further return where relief withdrawn) insert—
(1) Where the effect of a transaction (“the later transaction”) that is linked to an earlier transaction is that the earlier transaction becomes notifiable, or that additional tax is payable in respect of the earlier transaction or that tax is payable in respect of the earlier transaction where none was payable before—
(a) the purchaser under the earlier transaction must deliver a return or further return in respect of that transaction before the end of the period of 30 days after the effective date of the later transaction,
(b) the return must include a self-assessment of the amount of tax chargeable as a result of the later transaction,
(c) the tax so chargeable is to be calculated by reference to the rates in force at the effective date of the earlier transaction, and
(d) the return must be accompanied by payment of the tax or additional tax payable.
(2) The provisions of Schedule 10 (returns, enquiries, assessments and other matters) apply to a return under this section as they apply to a return under section 76 (general requirement to deliver land transaction return), with the following adaptations—
(a) in paragraph 5 (formal notice to deliver return), the requirement in sub-paragraph (2)(a) that the notice specify the transaction to which it relates shall be read as requiring both the earlier and later transactions to be specified;
(b) references to the effective date of the transaction to which the return relates shall be read as references to the effective date of the later transaction.
(3) This section does not affect any requirement to make a return under section 76 in respect of the later transaction.”.
(2) In section 81(3) for “land transaction return” substitute “return under section 76 (general requirement to deliver land transaction return)”.
(3) In section 87 (interest on unpaid tax), in subsection (3) (meaning of “the relevant date”), after paragraph (a) insert—
“(aa) in the case of an amount payable under section 81A in respect of an earlier transaction because of the effect of a later linked transaction, the effective date of the later transaction;”.
20 After section 81A (inserted by paragraph 19 above) insert—
(1) This section applies to the declaration mentioned in paragraph 1(1)(c) of Schedule 10 or paragraph 2(1)(c) of Schedule 11 (declaration that return or self-certificate is correct and complete).
(2) The requirement that an individual make such a declaration (alone or jointly with others) is treated as met if a declaration to that effect is made by a person authorised to act on behalf of that individual in relation to the matters to which the return or certificate relates.
(3) For the purposes of this section a person is not regarded as authorised to act on behalf of an individual unless he is so authorised by a power of attorney in writing, signed by that individual.
In this subsection as it applies in Scotland “power of attorney” includes factory and commission.
(4) Nothing in this section affects the making of a declaration in accordance with—
(a) section 100(2) (persons through whom a company acts), or
(b) section 106 (1) or (2) (person authorised to act on behalf of incapacitated person or minor).”.
21 (1) Section 107 (Crown application) is amended as follows.
(2) For subsection (1) (extent of Crown application) substitute—
“(1) This Part binds the Crown, subject to the following provisions of this section.”.
(3) After subsection (3) add—
“(4) Nothing in this section shall be read as making the Crown liable to prosecution for an offence.”.
22 (1) For section 120 (meaning of “lease” and other supplementary provisions) substitute—
Schedule 17A contains further provisions relating to leases.”.
(2) After Schedule 17 insert—
Section 120
1 In the application of this Part to England and Wales or Northern Ireland “lease” means—
(a) an interest or right in or over land for a term of years (whether fixed or periodic), or
(b) a tenancy at will or other interest or right in or over land terminable by notice at any time.
2 In the application of the provisions of this Part to a lease for a fixed term, no account shall be taken of—
(a) any contingency as a result of which the lease may determine before the end of the fixed term, or
(b) any right of either party to determine the lease or renew it.
3 (1) This paragraph applies to—
(a) a lease for a fixed term and thereafter until determined, or
(b) a lease for a fixed term that may continue beyond the fixed term by operation of law.
(2) For the purposes of this Part (except section 77 (notifiable transactions)), a lease to which this paragraph applies is treated—
(a) in the first instance as if it were a lease for the original fixed term and no longer,
(b) if the lease continues after the end of that term, as if it were a lease for a fixed term one year longer than the original fixed term,
(c) if the lease continues after the end of the term resulting from the application of paragraph (b), as if it were a lease for a fixed term two years longer than the original fixed term,
and so on.
(3) Where the effect of sub-paragraph (2) in relation to the continuation of the lease after the end of a fixed term is that additional tax is payable in respect of a transaction or that tax is payable in respect of a transaction where none was payable before—
(a) the purchaser must deliver a return or further return in respect of that transaction before the end of the period of 30 days after the end of that term,
(b) the return must include a self-assessment of the amount of 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.
(4) The provisions of Schedule 10 (returns, enquiries, assessments and other matters) apply to a return under this paragraph as they apply to a return under section 76 (general requirement to deliver land transaction return), with the adaptation that references to the effective date of the transaction shall be read as references to the day on which the lease becomes treated as being for a longer fixed term.
(5) For the purposes of section 77 (notifiable transactions) a lease to which this paragraph applies is a lease for whatever is its fixed term.
4 (1) For the purposes of this Part (except section 77 (notifiable transactions))—
(a) a lease for an indefinite term is treated in the first instance as if it were a lease for a fixed term of a year,
(b) if the lease continues after the end of the term resulting from the application of paragraph (a), it is treated as if it were a lease for a fixed term of two years,
(c) if the lease continues after the end of the term resulting from the application of paragraph (b), it is treated as if it were a lease for a fixed term of three years,
and so on.
(2) No account shall be taken for the purposes of this Part of any other statutory provision in England and Wales or Northern Ireland deeming a lease for an indefinite period to be a lease for a different term.
(3) Where the effect of sub-paragraph (1) in relation to the continuation of the lease after the end of a deemed fixed term is that additional tax is payable in respect of a transaction or that tax is payable in respect of a transaction where none was payable before—
(a) the purchaser must deliver a return or further return in respect of that transaction before the end of the period of 30 days after the end of that term,
(b) the return must include a self-assessment of the amount of 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.
(4) The provisions of Schedule 10 (returns, enquiries, assessments and other matters) apply to a return under this paragraph as they apply to a return under section 76 (general requirement to deliver land transaction return), with the adaptation that references to the effective date of the transaction shall be read as references to the day on which the lease becomes treated as being for a longer fixed term.
(4A) For the purposes of section 77 (notifiable transactions) a lease for an indefinite term is a lease for a term of less then seven years.
(5) References in this paragraph to a lease for an indefinite period include—
(a) a periodic tenancy or other interest or right terminable by a period of notice,
(b) a tenancy at will in England and Wales or Northern Ireland, or
(c) any other interest or right terminable by notice at any time.