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Finance Bill
Schedule 6 — Stamp duty land tax: disadvantaged areas relief
Part 2 — Land wholly situated in a disadvantaged area

    170

 

Schedule 6

Section 57

 

Stamp duty land tax: disadvantaged areas relief

Part 1

Disadvantaged areas

Meaning of “disadvantaged area”

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  1       (1)      For the purposes of this Schedule a “disadvantaged area” means an area

designated as a disadvantaged area by regulations made by the Treasury.

          (2)      The regulations may—

              (a)             designate specified areas as disadvantaged areas, or

              (b)             provide for areas of a description specified in the regulations to be

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designated as disadvantaged areas.

          (3)      If the regulations so provide, the designation of an area as a disadvantaged

area shall have effect for such period as may be specified by or determined

in accordance with the regulations.

          (4)      The regulations may—

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              (a)             make different provision for different cases, and

              (b)             contain such incidental, supplementary, consequential or

transitional provision as appears to the Treasury to be necessary or

expedient.

Continuation of regulations made for purposes of stamp duty

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  2        Any regulations made by the Treasury—

              (a)             designating areas as disadvantaged areas for the purposes of section

92 of the Finance Act 2001 (c. 9) (stamp duty exemption for land in

disadvantaged areas), and

              (b)             in force immediately before the implementation date,

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           have effect for the purposes of this Schedule as if made under paragraph 1

above and may be varied or revoked accordingly.

Part 2

Land wholly situated in a disadvantaged area

Introduction

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  3        This Part of this Schedule applies to a land transaction if the subject matter

of the transaction is a chargeable interest in relation to land that is wholly

situated in a disadvantaged area.

Land all non-residential

  4        If all the land is non-residential property, the transaction is exempt from

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charge.

 

 

Finance Bill
Schedule 6 — Stamp duty land tax: disadvantaged areas relief
Part 2 — Land wholly situated in a disadvantaged area

    171

 

Land all residential

  5       (1)      This paragraph applies where all the land is residential property.

          (2)      If—

              (a)             the consideration for the transaction does not include rent and the

relevant consideration does not exceed £150,000, or

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              (b)             the consideration for the transaction consists only of rent and the

relevant rental value does not exceed £150,000,

                   the transaction is exempt from charge.

          (3)      If the consideration for the transaction includes rent and the relevant rental

value does not exceed £150,000, the rent does not count as chargeable

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consideration.

          (4)      If the consideration for the transaction includes consideration other than

rent, then—

              (a)             if—

                    (i)                    the annual rent does not exceed £600, and

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                    (ii)                  the relevant consideration does not exceed £150,000,

                              the consideration other than rent does not count as chargeable

consideration;

              (b)             if the annual rent exceeds £600, the 0% band in Table A in subsection

(2) of section 55 does not apply in relation to the consideration other

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than rent and any case that would have fallen within that band is

treated as falling within the 1% band.

Land partly non-residential and partly residential

  6       (1)      This paragraph applies where the land is partly non-residential property

and partly residential property.

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                   References in this paragraph to the consideration attributable to land that is

non-residential property or land that is residential property (or to the rent or

annual rent so attributable) are to the consideration (or rent or annual rent)

so attributable on a just and reasonable apportionment.

          (2)      The consideration attributable to land that is non-residential property does

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not count as chargeable consideration.

          (3)      The following provisions apply in relation to the consideration attributable

to land that is residential property.

          (4)      If—

              (a)             the consideration so attributable does not include rent and the

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relevant consideration does not exceed £150,000, or

              (b)             the consideration so attributable consists only of rent and the

relevant rental value does not exceed £150,000,

                   none of the consideration so attributable counts as chargeable consideration.

          (5)      If the consideration so attributable includes rent and the relevant rental

40

value does not exceed £150,000, the rent so attributable does not count as

chargeable consideration.

          (6)      If the consideration so attributable includes consideration other than rent,

then—

              (a)             if—

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Finance Bill
Schedule 6 — Stamp duty land tax: disadvantaged areas relief
Part 3 — Land partly situated in a disadvantaged area

    172

 

                    (i)                    the annual rent so attributable does not exceed £600, and

                    (ii)                  the relevant consideration does not exceed £150,000,

                              the consideration other than rent does not count as chargeable

consideration;

              (b)             if the annual rent so attributable exceeds £600, the 0% band in the

5

Tables in subsection (2) of section 55 does not apply in relation to the

consideration other than rent and any case that would have fallen

within that band is treated as falling within the 1% band.

Part 3

Land partly situated in a disadvantaged area

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Introduction

  7       (1)      This Part of this Schedule applies to a land transaction if the subject matter

of the transaction is a chargeable interest in relation to land that is partly in

a disadvantaged area and partly outside such an area.

          (2)      References in this Part to the consideration attributable to land situated in a

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disadvantaged area and to land not so situated (or to the rent or annual rent

so attributable) are to the consideration (or rent or annual rent) so

attributable on a just and reasonable apportionment.

Land all non-residential

  8        If all of the land situated in a disadvantaged area is non-residential property,

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the consideration attributable to the land situated in the disadvantaged area

does not count as chargeable consideration.

Land all residential

  9       (1)      This paragraph applies where all the land situated in a disadvantaged area

is residential property.

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          (2)      If—

              (a)             the consideration attributable to land situated in a disadvantaged

area does not include rent and the relevant consideration does not

exceed £150,000, or

              (b)             the consideration so attributable consists only of rent and the

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relevant rental value does not exceed £150,000,

                   none of the consideration so attributable counts as chargeable consideration.

          (3)      If the consideration attributable to land situated in a disadvantaged area

includes rent and the relevant rental value does not exceed £150,000, the rent

so attributable does not count as chargeable consideration.

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          (4)      If the consideration attributable to land in a disadvantaged area includes

consideration other than rent (“non-rent consideration”), then—

              (a)             if—

                    (i)                    the annual rent so attributable does not exceed £600, and

                    (ii)                  the relevant consideration does not exceed £150,000,

40

                              the non-rent consideration so attributable does not count as

chargeable consideration;

 

 

Finance Bill
Schedule 6 — Stamp duty land tax: disadvantaged areas relief
Part 4 — Interpretation

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              (b)             if the annual rent so attributable exceeds £600, the 0% band in Table

A in subsection (2) of section 55 does not apply in relation to the non-

rent consideration so attributable and any case that would have

fallen within that band is treated as falling within the 1% band.

Land partly non-residential and partly residential

5

  10      (1)      This paragraph applies where the land situated in a disadvantaged area is

partly non-residential property and partly residential property.

                   References in this paragraph to the consideration attributable to land that is

non-residential property or land that is residential property (or to the rent or

annual rent so attributable) are to the consideration (or rent or annual rent)

10

attributable to land in a disadvantaged area that is, on a just and reasonable

apportionment, so attributable.

          (2)      The consideration attributable to land that is non-residential property does

not count as chargeable consideration.

          (3)      The following provisions apply in relation to the consideration attributable

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to land that is residential property.

          (4)      If—

              (a)             the consideration so attributable does not include rent and the

relevant consideration does not exceed £150,000, or

              (b)             the consideration so attributable consists only of rent and the

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relevant rental value does not exceed £150,000,

                   none of the consideration so attributable counts as chargeable consideration.

          (5)      If the consideration so attributable includes rent and the relevant rental

value does not exceed £150,000, the rent so attributable does not count as

chargeable consideration.

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          (6)      If the consideration so attributable includes consideration other than rent,

then—

              (a)             if—

                    (i)                    the annual rent so attributable does not exceed £600, and

                    (ii)                  the relevant consideration does not exceed £150,000,

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                              the consideration other than rent does not count as chargeable

consideration;

              (b)             if the annual rent so attributable exceeds £600, the 0% band in the

Tables in subsection (2) of section 55 does not apply in relation to the

consideration other than rent and any case that would have fallen

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within that band is treated as falling within the 1% band.

Part 4

Interpretation

Relevant consideration and relevant rental value

  11      (1)      References in this Schedule to the “relevant consideration” in relation to a

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transaction are to the amount falling to be taken into account for the

purposes of section 55(2) in determining the rate of tax chargeable under that

section in relation to the transaction apart from any relief under this

Schedule (whether in relation to that or any other transaction).

 

 

Finance Bill
Schedule 7 — Stamp duty land tax: group relief and reconstruction and acquisition reliefs
Part 1 — Group relief

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          (2)      References in this Schedule to the “relevant rental value” in relation to a

transaction are to the amount falling to be taken into account for the

purposes of paragraph 2(3) of Schedule 5 in determining the rate of tax

chargeable under that Schedule in relation to the transaction apart from any

relief under this Schedule (whether in relation to that or any other

5

transaction).

Rent and annual rent

  12       For the purposes of this Schedule “rent” has the same meaning as in

Schedule 5 (amount of tax chargeable: rent) and “annual rent” has the same

meaning as in paragraph 9(2) of that Schedule.

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Schedule 7

Section 62

 

Stamp duty land tax: group relief and reconstruction and acquisition reliefs

Part 1

Group relief

Group relief

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  1       (1)      A transaction is exempt from charge if the vendor and purchaser are

companies that at the effective date of the transaction are members of the

same group.

          (2)      For the purposes of group relief—

              (a)             “company” means a body corporate, and

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              (b)             companies are members of the same group if one is the 75%

subsidiary of the other or both are 75% subsidiaries of a third

company.

          (3)      For the purposes of group relief a company (“company A”) is the 75%

subsidiary of another company (“company B”) if company B—

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              (a)             is beneficial owner of not less than 75% of the ordinary share capital

of company A,

              (b)             is beneficially entitled to not less than 75% of any profits available for

distribution to equity holders of company A, and

              (c)             would be beneficially entitled to not less than 75% of any assets of

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company A available for distribution to its equity holders on a

winding-up.

          (4)      The ownership referred to in sub-paragraph (3)(a) is ownership either

directly or through another company or companies.

                   For the purposes of that provision the amount of ordinary share capital of

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company A owned by company B through another company or companies

shall be determined in accordance with section 838(5) to (10) of the Taxes Act

1988.

          (5)      In sub-paragraphs (3)(a) and (4) above “ordinary share capital”, in relation

to a company, means all the issued share capital (by whatever name called)

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of the company, other than capital the holders of which have a right to a

 

 

Finance Bill
Schedule 7 — Stamp duty land tax: group relief and reconstruction and acquisition reliefs
Part 1 — Group relief

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dividend at a fixed rate but have no other right to share in the profits of the

company.

          (6)      Schedule 18 to the Taxes Act 1988 (equity holders and profits or assets

available for distribution) applies for the purposes of subsection (3)(b) and

(c) above as it applies for the purposes of section 413(7)(a) and (b) of that Act,

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but with the omission of paragraphs 5(3) and 5B to 5E.

          (7)      This paragraph is subject to paragraph 2 (restrictions on availability of group

relief) and paragraph 3 (withdrawal of group relief).

Restrictions on availability of group relief

  2       (1)      Group relief is not available if at the effective date of the transaction there are

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arrangements in existence by virtue of which, at that or some later time, a

person has or could obtain, or any persons together have or could obtain,

control of the purchaser but not of the vendor.

                   This does not apply to arrangements entered into with a view to an

acquisition of shares by a company (“the acquiring company”)—

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              (a)             in relation to which section 75 of the Finance Act 1986 (c. 41) (stamp

duty: acquisition relief) will apply,

              (b)             in relation to which the conditions for relief under that section will

be met, and

              (c)             as a result of which the purchaser will be a member of the same

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group as the acquiring company.

          (2)      Group relief is not available if the transaction is effected in pursuance of, or

in connection with, arrangements under which—

              (a)             the consideration, or any part of the consideration, for the

transaction is to be provided or received (directly or indirectly) by a

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person other than a group company, or

              (b)             the vendor and the purchaser are to cease to be members of the same

group by reason of the purchaser ceasing to be a 75% subsidiary of

the vendor or a third company.

          (3)      Arrangements are within sub-paragraph (2)(a) if under them the vendor or

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the purchaser, or another group company, is to be enabled to provide any of

the consideration, or is to part with any of it, by or in consequence of the

carrying out of a transaction or transactions involving, or any of them

involving, a payment or other disposition by a person other than a group

company.

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          (4)      In sub-paragraphs (2)(a) and (3) a “group company” means a company that

at the effective date of the transaction is a member of the same group as the

vendor or the purchaser.

          (5)      In this paragraph—

               “arrangements” includes any scheme, agreement or understanding,

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whether or not legally enforceable; and

               “control” has the meaning given by section 840 of the Taxes Act 1988.

Withdrawal of group relief

  3       (1)      Where in the case of a transaction (“the relevant transaction”) that is exempt

from charge by virtue of paragraph 1 (group relief)—

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Finance Bill
Schedule 7 — Stamp duty land tax: group relief and reconstruction and acquisition reliefs
Part 1 — Group relief

    176

 

              (a)             the purchaser ceases to be a member of the same group as the

vendor—

                    (i)                   before the end of the period of three years beginning with the

effective date of the transaction, or

                    (ii)                  in pursuance of, or in connection with, arrangements made

5

before the end of that period,

                              and

              (b)             at the time the purchaser ceases to be a member of the same group as

the vendor (“the relevant time”), it or a relevant associated company

holds a chargeable interest—

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                    (i)                   that was acquired by the purchaser under the relevant

transaction, or

                    (ii)                  that is derived from a chargeable interest so acquired,

                              and that has not subsequently been acquired at market value under

a chargeable transaction for which group relief was available but was

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not claimed,

                   group relief in relation to the relevant transaction, or an appropriate

proportion of it, is withdrawn and tax is chargeable in accordance with this

paragraph.

          (2)      The amount chargeable is the tax that would have been chargeable in respect

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of the relevant transaction but for group relief if the chargeable

consideration for that transaction had been an amount equal to the market

value of the subject matter of the transaction or, as the case may be, an

appropriate proportion of the tax that would have been so chargeable.

          (3)      In sub-paragraphs (1) and (2) “an appropriate proportion” means an

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appropriate proportion having regard to the subject matter of the relevant

transaction and what is held at the relevant time by the transferee company

or, as the case may be, by that company and its relevant associated

companies.

          (4)      In this paragraph—

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               “arrangements” includes any scheme, agreement or understanding,

whether or not legally enforceable; and

               “relevant associated company”, in relation to the purchaser, means a

company that—

                     (a)                    is a member of the same group as the purchaser

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immediately before the purchaser ceases to be a member of

the same group as the vendor, and

                     (b)                    ceases to be a member of the same group as the vendor in

consequence of the purchaser so ceasing.

          (5)      This paragraph has effect subject to paragraph 4 (cases in which group relief

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not withdrawn).

Cases in which group relief not withdrawn

  4       (1)      Group relief is not withdrawn under paragraph 3 in the following cases.

          (2)      The first case is where the purchaser ceases to be a member of the same

group as the vendor because the vendor leaves the group.

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          (3)      The vendor is regarded as leaving the group if the companies cease to be

members of the same group by reason of a transaction relating to shares in—

 

 

 
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