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Finance Bill
Schedule 19 — Stamp duty land tax: commencement and transitional provisions

    247

 

          (2)      The following provisions have effect as regards what transactions are SDLT

transactions, that is, are chargeable or notifiable or are transactions in

relation to which section 79 (registration etc) applies.

          (3)      Nothing in this Schedule shall be read as meaning that other transactions,

whether effected before or after the passing of this Act, are to be disregarded

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in applying the provisions of this Part.

The implementation date

  2       (1)      A transaction is not an SDLT transaction unless the effective date of the

transaction is on or after the implementation date.

          (2)      In this Part “the implementation date” means the date appointed by

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Treasury order as the implementation date for the purposes of stamp duty

land tax.

Contract entered into before first relevant date

  3       (1)      Subject to the following provisions of this paragraph, a transaction is not an

SDLT transaction if it is effected in pursuance of a contract entered into

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before the first relevant date.

          (2)      The “first relevant date” is the day after the passing of this Act.

          (3)      The exclusion of transactions effected in pursuance of contracts entered into

before the first relevant date does not apply—

              (a)             if there is any variation of the contract or assignment of rights under

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the contract on or after that date;

              (b)             if the transaction is effected in consequence of the exercise after that

date of any option, right of pre-emption or similar right;

              (c)             where the purchaser under the transaction is a person other than the

purchaser under the contract because of a further contract made on

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or after that date.

Contract substantially performed before implementation date

  4       (1)      This paragraph applies where a transaction—

              (a)             is completed on or after the implementation date,

              (b)             is effected in pursuance of a contract entered into and substantially

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performed before that date, and

              (c)             is not excluded from being an SDLT transaction by paragraph 3.

          (2)      The transaction is not an SDLT transaction if the contract was substantially

performed before the first relevant date.

          (3)      In any other case, the fact that the contract was substantially performed

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before the implementation date does not affect the matter.

                   Accordingly, the effective date of the transaction is the date of completion.

Credit for ad valorem stamp duty paid

  5       (1)      Where a transaction chargeable to stamp duty land tax is effected in

pursuance of a contract entered into before the implementation date, any ad

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valorem stamp duty paid on the contract shall go to reduce the amount of tax

payable (but not so as to give rise to any repayment).

 

 

Finance Bill
Schedule 19 — Stamp duty land tax: commencement and transitional provisions

    248

 

          (2)      Where the application or operation of any exemption or relief from stamp

duty land tax turns on whether tax was paid or payable in respect of an

earlier transaction, that requirement is treated as met if ad valorem stamp

duty was paid or (as the case may be) payable in respect of the instrument

by which that transaction was effected.

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Effect for stamp duty purposes of stamp duty land tax being paid or chargeable

  6       (1)      Where in the case of a contract that, apart from paragraph 7 of Schedule 13

to the Finance Act 1999 (c. 16) (contracts chargeable as conveyances on sale),

would not be chargeable with stamp duty—

              (a)             a conveyance made in conformity with the contract is effected after

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the implementation date, and

              (b)             stamp duty land tax is duly paid in respect of that transaction or no

tax is chargeable because of an exemption or relief,

                   the contract shall be deemed to be duly stamped.

          (2)      The references in section 111(1)(c) of, and paragraph 4(3) of Schedule 34 to,

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the Finance Act 2002 (c. 23) (which relate to the circumstances in which

stamp duty group relief is withdrawn) to a transfer at market value by a duly

stamped instrument on which ad valorem duty was paid and in respect of

which group relief was not claimed shall be read, on or after the

implementation date, as including a reference to a transfer at market value

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by a chargeable transaction in respect of which relief under Part 1 of

Schedule 7 to this Act was available but was not claimed.

          (3)      The references in section 113(1)(c) of, and in paragraph 3(3) or 4(3) of

Schedule 35 to, the Finance Act 2002 (which relate to the circumstances in

which stamp duty company acquisitions relief is withdrawn) to a transfer at

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market value by a duly stamped instrument on which ad valorem duty was

paid and in respect of which section 76 relief was not claimed shall be read,

on or after the implementation date, as including a reference to a transfer at

market value by a chargeable transaction on which stamp duty land tax was

chargeable and in respect of which relief under Part 2 of Schedule 7 to this

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Act was available but was not claimed.

Earlier related transactions under stamp duty

  7       (1)      In relation to a transaction that is not an SDLT transaction but which is

linked to an SDLT transaction and accordingly falls to be taken into account

in determining the rate of stamp duty land tax chargeable on the latter

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transaction, any reference in this Part to the chargeable consideration for the

first-mentioned transaction shall be read as a reference to the consideration

by reference to which ad valorem stamp duty was payable in respect of the

instrument by which that transaction was effected.

          (2)      In paragraph 3 of Schedule 9 (relief for transfer of reversion under shared

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ownership lease where election made for market value treatment) as it

applies in a case where the original lease was granted before the

implementation date—

              (a)             the reference to a lease to which paragraph 2 of that Schedule applies

shall be read as a reference to a lease to which section 97 of the

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Finance Act 1980 applied (which made corresponding provision for

stamp duty), and

 

 

Finance Bill
Schedule 19 — Stamp duty land tax: commencement and transitional provisions

    249

 

              (b)             the reference to an election having been made for tax to be charged

under that paragraph shall be read accordingly as a reference to a

corresponding election having been in relation to stamp duty under

that section.

          (3)      In section 54 (exceptions from deemed market value rule for transactions

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with connected company) the reference in subsection (4)(b) to group relief

having been claimed in respect of a transaction shall be read in relation to a

transaction carried out before the implementation date as a reference to

relief having been claimed under section 42 of the Finance Act 1930 (c. 28),

section 11 of the Finance Act (Northern Ireland) 1954 (c. 23 (N. I.)) or section

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151 of the Finance Act 1995 (c. 4) in respect of stamp duty on the instrument

by which the transaction was effected.

Time for stamping agreement for lease: lease subject to stamp duty land tax

  8       (1)                        This paragraph makes provision corresponding to section 240 of the Finance

Act 1994 (c. 9) (stamp duty: time for presenting agreement for lease) and

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applies where—

              (a)             an agreement for a lease is entered into before the implementation

date,

              (b)             a lease giving effect to the agreement is executed on or after that date,

and

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              (c)             the transaction effected on completion is an SDLT transaction or

would be but for an exemption or relief from stamp duty land tax.

          (2)                        If in those circumstances—

              (a)             the lease is produced when the agreement is presented for stamping,

and

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              (b)             the duty (if any) chargeable on the agreement is paid,

                   sections 15A and 15B of the Stamp Act 1891 (c. 39) (interest and penalty on

late stamping) apply in relation to the agreement as if it had been executed

on the date on which the lease was executed.

          (3)      For the purposes of this paragraph a lease gives effect to an agreement if the

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lease either is in conformity with the agreement or relates to substantially

the same property and term as the agreement.

          (4)                        References in this paragraph to an agreement for a lease include missives of

let in Scotland.

Exercise of option or right of pre-emption acquired before implementation date

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  9       (1)      This paragraph applies where—

              (a)             an option binding the grantor to enter into a land transaction, or

              (b)             a right of pre-emption preventing the grantor from entering into, or

restricting the right of the grantor to enter into, a land transaction,

                   is acquired before the implementation date and exercised on or after that

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date.

          (2)      Where the option or right was acquired on or after 17th April 2003, any

consideration for the acquisition is treated as part of the chargeable

consideration for the transaction resulting from the exercise of the option or

right.

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Finance Bill
Schedule 20 — Stamp duty: restriction to instruments relating to stock or marketable securities
Part 1 — Supplementary provisions

    250

 

          (3)      Where the option or right was varied on or after 17th April 2003 and before

the implementation date, any consideration for the variation is treated as

part of the chargeable consideration for the transaction resulting from the

exercise of the option or right.

          (4)      Whether or not sub-paragraph (2) or (3) applies, the acquisition of the option

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or right and any variation of the option or right is treated as linked with the

land transaction resulting from the exercise of the option or right.

                   But not so as to require the consideration for the acquisition or variation to

be counted twice in determining the rate of tax chargeable on the land

transaction resulting from the exercise of the option or right.

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          (5)      Where this paragraph applies any ad valorem stamp duty paid on the

acquisition or variation of the option or right shall go to reduce the amount

of tax payable on the transaction resulting from the exercise of the option or

right (but not so as to give rise to any repayment).

Supplementary

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  10       In this Schedule “contract” includes any agreement.

Schedule 20

Section 125

 

Stamp duty: restriction to instruments relating to stock or marketable

securities

Part 1

20

Supplementary provisions

Reduction of stamp duty where instrument partly relating to stock or marketable securities

  1       (1)      This paragraph applies where          stamp duty under Part 1 of Schedule 13 to the

Finance Act 1999 (c. 16) (transfer on sale) is chargeable on an instrument that

relates partly to stock or marketable securities and partly to property other

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than stock or marketable securities.

          (2)      In such a case—

              (a)             the consideration in respect of which duty would otherwise be

charged shall be apportioned, on a just and reasonable basis, as

between the stock or marketable securities and the other property,

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and

              (b)             the instrument shall be charged only in respect of the consideration

attributed to the stock or marketable securities.

Apportionment of consideration for stamp duty purposes

  2       (1)      Where part of the property referred to in section 58(1) of the Stamp Act 1891

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(c. 39) (consideration to be apportioned between different instruments as

parties think fit) consists of stock or marketable securities, that provision

shall have effect as if “the parties think fit” read “is just and reasonable”.

          (2)      Where—

 

 

Finance Bill
Schedule 20 — Stamp duty: restriction to instruments relating to stock or marketable securities
Part 2 — Consequential amendments and repeals

    251

 

              (a)             part of the property referred to in section 58(2) of the Stamp Act 1891

(c. 39) (property contracted to be purchased by two or more persons

etc) consists of stock or marketable securities, and

              (b)             both or (as the case may be) all the relevant persons are connected

with one another,

5

                   that provision shall have effect as if the words from “for distinct parts of the

consideration” to the end of the subsection read “, the consideration shall be

apportioned in such manner as is just and reasonable, so that a distinct

consideration for each part of the property transferred is set forth in the

transfer relating to that part, and the transfer shall be charged with ad

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valorem duty in respect of that consideration.”.

          (3)      If in a case where sub-paragraph (1) or (2) applies the consideration is

apportioned in a manner that is not just and reasonable, the enactments

relating to stamp duty shall have effect as if—

              (a)             the consideration had been apportioned in a manner that is just and

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reasonable, and

              (b)             the amount of any distinct consideration set forth in any transfer

relating to a part of the property transferred were such amount as is

found by a just and reasonable apportionment (and not the amount

actually set forth).

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          (4)      For the purposes of sub-paragraph (2)—

              (a)             a person is a relevant person if he is a person by or for whom the

property is contracted to be purchased;

              (b)             the question whether persons are connected with one another shall

be determined in accordance with section 839 of the Taxes Act 1988.

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Part 2

Consequential amendments and repeals

Removal of unnecessary references to “conveyance”

  3        In the enactments relating to stamp duty for “conveyance or transfer”,

wherever occurring, substitute “transfer”.

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Finance Act 1895

  4        In section 12 of the Finance Act 1895 (c. 16) (collection of stamp duty in cases

of property vested by Act or purchased under statutory powers)—

              (a)             in paragraph (a) for “property is” substitute “stock or marketable

securities are”;

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              (b)             in paragraph (b) for “property” substitute “stock or marketable

securities”;

              (c)             in the closing words for “conveyance”, in both places where that

word occurs, substitute “transfer”.

Finance Act 1990

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  5        In section 108 of the Finance Act 1990 (c. 29) (transfer of securities: abolition

 

 

Finance Bill
Schedule 21 — Approved share plans and schemes
Part 1 — Share incentive plans

    252

 

of stamp duty), for subsections (1) to (6) substitute—

              “(1)                Stamp duty shall not be chargeable under Schedule 13 to the Finance

Act 1999 (transfer of securities).”.

Finance Act 1999

  6        In paragraph 1(2) of Schedule 13 to the Finance Act 1999 (c. 16) for

5

“conveyance on sale” substitute “transfer on sale”.

Power to make further consequential amendments or repeals

  7       (1)      The Treasury may by regulations make such other amendments or repeals

of enactments relating to stamp duty or stamp duty reserve tax as appear to

them appropriate in consequence of the abolition of stamp duty except on

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instruments relating to stock or marketable securities.

          (2)      The regulations may include such transitional provisions and savings as

appear to the Treasury to be appropriate.

          (3)      Regulations under this paragraph shall be made by statutory instrument

which shall be subject to annulment in pursuance of a resolution of the

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House of Commons.

Schedule 21

Section 139

 

Approved share plans and schemes

Part 1

Share incentive plans

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Introductory

  1        Schedule 2 to the Income Tax (Earnings and Pensions) Act 2003 (c. 1)

(approved share incentive plans) is amended as follows.

Participation in more than one connected plan in a tax year

  2        After paragraph 18 insert—

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“Participation in more than one connected SIP in a tax year

          18A                 (1)                  The plan must provide that, if an individual participates in an

award of shares under the plan in a tax year in which he has

already participated in an award of shares under one or more

other approved SIPs established by the company or a connected

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company—

                      (a)                     paragraph 35 (maximum annual award of free shares),

                      (b)                     paragraph 46 (maximum amount of partnership share

money deductions), and

                      (c)                     paragraph 64 (limit on amount reinvested),

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                                             apply as if the plan and the other plan or plans were a single plan.

 

 

Finance Bill
Schedule 21 — Approved share plans and schemes
Part 1 — Share incentive plans

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                           (2)                  In this paragraph “connected company” has the same meaning as

in paragraph 18.”.

  3        In paragraph 13 (eligibility of individuals: introduction), for the entry

relating to paragraph 18 substitute—

                                     “paragraph 18 (requirement not to participate

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simultaneously in connected SIPs),

                                     paragraph 18A (successive participation in connected SIPs),

and”.

  4        In paragraph 14(7) (eligibility to participate dependent on certain

requirements of plan being met), for paragraph (b) substitute—

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                    “(b)                      not participating simultaneously in connected SIPs (see

paragraph 18),

                    (ba)                      successive participation in connected SIPs (see paragraph

18A), and”.

  5        In paragraph 18 (requirement not to participate in connected SIPs), omit sub-

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paragraph (1)(a) (successive participation in connected SIPs).

  6        After paragraph 71 insert—

“Duty to monitor participants in connected schemes

          71A                  The trust instrument must require the trustees to maintain records

of participants who have participated in one or more other

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approved SIPs established by the company or a connected

company.”.

Partnership shares

  7       (1)      Paragraph 46 (maximum amount of partnership share money deductions) is

amended as follows.

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          (2)      In sub-paragraph (1), for the words after “must not exceed” substitute

“£1,500 in any tax year.”.

          (3)      In sub-paragraph (2), for the words after “an employee’s salary” substitute

“for any tax year must not exceed 10% of the employee’s salary for the tax

year.”.

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          (4)      After that sub-paragraph insert—

          “(4A)                  A limit lower than that specified in sub-paragraph (2) may be

framed—

                      (a)                     as a proposition substituting a percentage lower than that

so specified, or

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                      (b)                     as a proposition that a particular description of earnings is

not to be regarded as forming part of an employee’s salary

for the purposes of that sub-paragraph.”.

          (5)      Sub-paragraphs (2) and (3) have effect for the year 2003-04 and subsequent

years of assessment.

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  8        In paragraph 47 (minimum amount of deductions)—

              (a)              for “in any month” substitute “on any occasion”, and

              (b)             omit sub-paragraph (3).

 

 

 
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