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Finance Bill
Part 3 — Taxes and duties on importation and exportation: penalties

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review of the decision, except in so far as they are relevant to any issue

to which the facts or matters not previously considered relate.

 35    Powers of Commissioners on a review

     (1)    Where the Commissioners—

           (a)           are required in accordance with section 33 to review a decision, or

5

           (b)           agree to do so on such a request as is mentioned in section 34(4),

            the following provisions of this section apply.

     (2)    On any such review, the Commissioners may—

           (a)           confirm the decision,

           (b)           withdraw the decision, or

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           (c)           vary the decision.

     (3)    Where the Commissioners withdraw or vary the decision, they may also take

such further steps (if any) in consequence of the withdrawal or variation as

they may consider appropriate.

     (4)    If the Commissioners do not within the permitted period give notice of their

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determination on the review to the person who required the review or his

representative, they shall be taken for the purposes of this Part to have

confirmed the decision.

     (5)    For the purposes of subsection (4), the “permitted period” is the period of 45

days beginning with the day on which the review—

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           (a)           is required by the person or his representative in accordance with

section 33, or

           (b)           is agreed to by the Commissioners as mentioned in section 34(4).

Appeals

 36    Appeals to a tribunal

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     (1)    Where the Commissioners—

           (a)           are required in accordance with section 33 to review a decision, or

           (b)           agree to do so on such a request as is mentioned in section 34(4),

            an appeal lies to an appeal tribunal against any decision by the Commissioners

on the review (including any confirmation under section 35(4)).

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     (2)    An appeal lies under this section only if the appellant is one of the following

persons—

           (a)           the person who required the review in question,

           (b)           where the person who required the review in question did so as

representative of another person, that other person, or

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           (c)           a representative of a person falling within paragraph (a) or (b).

     (3)    The powers of an appeal tribunal on an appeal under this section include—

           (a)           power to quash or vary a decision; and

           (b)           power to substitute the tribunal’s own decision for any decision so

quashed.

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     (4)    On an appeal under this section—

 

 

Finance Bill
Part 3 — Taxes and duties on importation and exportation: penalties

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           (a)           the burden of proof as to the matters mentioned in section 25(1) or 26(1)

lies on the Commissioners; but

           (b)           it is otherwise for the appellant to show that the grounds on which any

such appeal is brought have been established.

 37    Appeal tribunals

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     (1)    Sections 85 and 87 of the Value Added Tax Act 1994 (c. 23) (settling of appeals

by agreement and enforcement of decisions of tribunal) have effect as if—

           (a)           any reference to section 83 of that Act included a reference to section 36

above, and

           (b)           any reference to VAT included a reference to any relevant tax or duty.

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     (2)    The provision that may be made by rules under paragraph 9 of Schedule 12 to

the Value Added Tax Act 1994 (rules of procedure for tribunals) includes

provision for costs awarded against an appellant on an appeal by virtue of this

Part to be recoverable as if the amount awarded were an amount of customs

duty which the appellant is required to pay.

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Evidence

 38    Admissibility of certain statements and documents

     (1)    Statements made or documents produced by or on behalf of a person are not

inadmissible in—

           (a)           any criminal proceedings against that person in respect of any offence

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in connection with or in relation to any relevant tax or duty, or

           (b)           any proceedings against that person for the recovery of any sum due

from him in connection with or in relation to any relevant tax or duty,

            by reason only that any of the matters specified in subsection (2) has been

drawn to his attention and that he was, or may have been, induced by that

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matter having been brought to his attention to make the statements or produce

the documents.

     (2)    The matters mentioned in subsection (1) are—

           (a)           that the Commissioners have power, in relation to any relevant tax or

duty, to demand by means of a written notice an amount by way of a

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civil penalty, instead of instituting criminal proceedings;

           (b)           that it is the Commissioners’ practice, without being able to give an

undertaking as to whether they will make such a demand in any case,

to be influenced in determining whether to make such a demand by the

fact (where it is the case) that a person has made a full confession of any

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dishonest conduct to which he has been a party and has given full

facilities for an investigation;

           (c)           that the Commissioners or, on appeal, an appeal tribunal have power

to reduce a penalty under section 25, as provided in subsection (1) of

section 29; and

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           (d)           that, in determining the extent of such a reduction in the case of any

person, the Commissioners or tribunal will have regard to the extent of

the co-operation which he has given to the Commissioners in their

investigation.

     (3)    References in this section to a relevant tax or duty do not include a reference to

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customs duty of a preferential tariff country.

 

 

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Part 4 — Stamp duty land tax

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Miscellaneous and supplementary

 39    Service of notices

Any notice to be given to any person for the purposes of this Part may be given

by sending it by post in a letter addressed to that person or his representative

at the last or usual residence or place of business of that person or

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representative.

 40    Penalties not to be deducted for income tax or corporation tax purposes

In section 827 of the Taxes Act 1988 (no deduction for penalties etc) after

subsection (1D) insert—

           “(1E)              Where a person is liable to make a payment by way of a penalty under

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section 25 or 26 of the Finance Act 2003 (evasion of, or contravention of

relevant rule relating to, certain taxes and duties under the

management of the Commissioners of Customs and Excise etc) the

payment shall not be allowed as a deduction in computing any income,

profits or losses for any tax purposes.”.

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 41    Regulations and orders

     (1)    Any power conferred on the Treasury by this Part to make regulations or an

order includes power—

           (a)           to make different provision for different cases, and

           (b)           to make incidental, consequential, supplemental or transitional

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provision or savings.

     (2)    Any power conferred on the Treasury by this Part to make regulations or an

order shall be exercisable by statutory instrument.

     (3)    Any statutory instrument containing regulations under this Part shall be

subject to annulment in pursuance of a resolution of the House of Commons.

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Part 4

Stamp duty land tax

Introduction

 42    The tax

     (1)    A tax (to be known as “stamp duty land tax”) shall be charged in accordance

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with this Part on land transactions.

     (2)    The tax is chargeable—

           (a)           whether or not there is any instrument effecting the transaction,

           (b)           if there is such an instrument, whether or not it is executed in the

United Kingdom, and

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           (c)           whether or not any party to the transaction is present, or resident, in the

United Kingdom.

     (3)    The tax is under the care and management of the Commissioners of Inland

Revenue (referred to in this Part as “the Board”).

 

 

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Land transactions

 43    Land transactions

     (1)    In this Part a “land transaction” means any acquisition of a chargeable interest.

            As to the meaning of “chargeable interest” see section 48.

     (2)    Except as otherwise provided, this Part applies however the acquisition is

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effected, whether by act of the parties, by order of a court or other authority, by

or under any statutory provision or by operation of law.

     (3)    For the purposes of this Part—

           (a)           the creation of a chargeable interest is—

                  (i)                 an acquisition by the person becoming entitled to the interest

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created, and

                  (ii)                a disposal by the person whose interest or right is subject to the

interest created;

           (b)           the surrender or release of a chargeable interest is—

                  (i)                 an acquisition of that interest by any person whose interest or

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right is benefitted or enlarged by the transaction, and

                  (ii)                a disposal by the person ceasing to be entitled to that interest;

and

           (c)           the variation of a chargeable interest is—

                  (i)                 an acquisition of a chargeable interest by the person benefitting

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from the variation, and

                  (ii)                a disposal of a chargeable interest by the person whose interest

is subject to or limited by the variation.

     (4)    References in this Part to the “purchaser” and “vendor”, in relation to a land

transaction, are to the person acquiring and the person disposing of the subject-

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matter of the transaction.

            These expressions apply even if there is no consideration given for the

transaction.

     (5)    A person is not treated as a purchaser unless he has given consideration for, or

is a party to, the transaction.

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     (6)    References in this Part to the subject-matter of a land transaction are to the

chargeable interest acquired (the “main subject-matter”), together with any

interest or right appurtenant or pertaining to it that is acquired with it.

 44    Contract and conveyance

     (1)    This section applies where a contract for a land transaction is entered into

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under which the transaction is to be completed by a conveyance.

     (2)    A person is not regarded as entering into a land transaction by reason of

entering into the contract, but the following provisions have effect.

     (3)    If the transaction is completed without previously having been substantially

performed, the contract and the transaction effected on completion are treated

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as parts of a single land transaction.

            In this case the effective date of the transaction is the date of completion.

 

 

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Part 4 — Stamp duty land tax

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     (4)    If the contract is substantially performed without having been completed, the

contract is treated as if it were itself the transaction provided for in the contract.

            In this case the effective date of the transaction is when the contract is

substantially performed.

     (5)    A contract is “substantially performed” when—

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           (a)           the purchaser takes possession of the whole, or substantially the whole,

of the subject-matter of the contract, or

           (b)           a substantial amount of the consideration is paid or provided.

     (6)    For the purposes of subsection (5)(a)—

           (a)           a purchaser takes possession if he receives, or becomes entitled to

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receive, rents and profits, and

           (b)           it is immaterial whether the purchaser takes possession under the

contract or under a licence or lease of a temporary character.

     (7)    For the purposes of subsection (5)(b) a substantial amount of the consideration

is paid or provided—

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           (a)           if none of the consideration is rent, where the whole or substantially the

whole of the consideration is paid or provided;

           (b)           if the only consideration is rent, when the first payment of rent is made;

           (c)           if the consideration includes both rent and other consideration, when—

                  (i)                 the whole or substantially the whole of the consideration other

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than rent is paid or provided, or

                  (ii)                the first payment of rent is made.

     (8)    Where subsection (4) applies and the contract is subsequently completed by a

conveyance—

           (a)           both the contract and the transaction effected on completion are

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notifiable transactions, and

           (b)           tax is chargeable on the latter transaction to the extent (if any) that the

amount of tax chargeable on it is greater than the amount of tax

chargeable on the contract.

     (9)    Where subsection (4) applies and the contract is (to any extent) afterwards

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rescinded or annulled, or is for any other reason not carried into effect, the tax

paid by virtue of that subsection shall (to that extent) be repaid by the Inland

Revenue.

            Repayment must be claimed by amendment of the land transaction return

made in respect of the contract.

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     (10)   In this section—

           (a)           references to completion are to completion of the land transaction

proposed, between the same parties, in substantial conformity with the

contract; and

           (b)           “contract” includes any agreement and “conveyance” includes any

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instrument.

 45    Contract and conveyance: effect of transfer of rights

     (1)    This section applies where—

           (a)           a contract for a land transaction (“the original contract”) is entered into

under which the transaction is to be completed by a conveyance, and

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           (b)           there is an assignment, subsale or other transaction (relating to the

whole or part of the subject-matter of the original contract) as a result

of which a person other than the original purchaser becomes entitled to

call for a conveyance to him.

            References in the following provisions of this section to a transfer of rights are

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to any such assignment, subsale or other transaction.

     (2)    The transferee is not regarded as entering into a land transaction by reason of

the transfer of rights, but section 44 (contract and conveyance) has effect in

accordance with the following provisions of this section.

     (3)    That section applies as if there were a contract for a land transaction (a

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“secondary contract”) under which—

           (a)           the transferee is the purchaser, and

           (b)           the consideration for the transaction is—

                  (i)                 so much of the consideration under the original contract as is

referable to the subject-matter of the transfer of rights and is to

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be given (directly or indirectly) by the transferee or a person

connected with him, and

                  (ii)                the consideration given for the transfer of rights.

            The substantial performance or completion of the original contract at the same

time as, and in connection with, the substantial performance or completion of

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the secondary contract shall be disregarded.

     (4)    Where there are successive transfers of rights, subsection (3) has effect in

relation to each of them.

            The substantial performance or completion of the secondary contract arising

from an earlier transfer of rights at the same time as, and in connection with,

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the substantial performance or completion of the secondary contract arising

from a subsequent transfer of rights shall be disregarded.

     (5)    Where a transfer of rights relates to part only of the subject-matter of the

original contract, subsection (8)(b) of section 44 (restriction of charge to tax on

subsequent conveyance) has effect as if the reference to the amount of tax

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chargeable on that contract were a reference to an appropriate proportion of

that amount.

     (6)    Section 839 of the Taxes Act 1988 (connected persons) applies for the purposes

of subsection (3)(b)(i).

     (7)    In this section “contract” includes any agreement and “conveyance” includes

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any instrument.

 46    Options and rights of pre-emption

     (1)    The acquisition of—

           (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

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

            is a land transaction distinct from any land transaction resulting from the

exercise of the option or right.

            They may be “linked transactions” (see section 108).

     (2)    The reference in subsection (1)(a) to an option binding the grantor to enter into

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a land transaction includes an option requiring the grantor either to enter into

 

 

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Part 4 — Stamp duty land tax

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a land transaction or to discharge his obligations under the option in some

other way.

     (3)    The effective date of the transaction in the case of the acquisition of an option

or right such as is mentioned in subsection (1) is when the option or right is

acquired (as opposed to when it becomes exercisable).

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     (4)    Nothing in this section applies to so much of an option or right of pre-emption

as constitutes or forms part of a land transaction apart from this section.

 47    Exchanges

     (1)    Where a land transaction is entered into by the purchaser (alone or jointly)

wholly or partly in consideration of another land transaction being entered

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into by him (alone or jointly) as vendor, this Part applies in relation to each

transaction as if each were distinct and separate from the other.

     (2)    A transaction is treated for the purposes of this Part as entered into by the

purchaser wholly or partly in consideration of another land transaction being

entered into by him as vendor in any case where an obligation to give

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consideration for a land transaction that a person enters into as purchaser is

met wholly or partly by way of that person entering into another transaction as

vendor.

     (3)    As to the amount of the chargeable consideration in the case of exchanges and

similar transactions, see—

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                    paragraphs 5 and 6 of Schedule 4 (exchanges, partition etc), and

                    section 58 (relief for certain exchanges of residential property).

Chargeable interests, chargeable transactions and chargeable consideration

 48    Chargeable interests

     (1)    In this Part “chargeable interest” means—

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           (a)           an estate, interest, right or power in or over land in the United

Kingdom, or

           (b)           the benefit of an obligation, restriction or condition affecting the value

of any such estate, interest, right or power,

            other than an exempt interest.

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     (2)    The following are exempt interests—

           (a)           any security interest;

           (b)           a licence to use or occupy land;

           (c)           in England and Wales or Northern Ireland—

                  (i)                 a tenancy at will;

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                  (ii)                an advowson, franchise or manor.

     (3)    In subsection (2)—

           (a)           “security interest” means an interest or right (other than a rentcharge)

held for the purpose of securing the payment of money or the

performance of any other obligation; and

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           (b)           “franchise” means a grant from the Crown such as the right to hold a

market or fair, or the right to take tolls.

 

 

 
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