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Finance Bill


Finance Bill
Part 4 — Stamp duty land tax

    43

 

 62    Group relief and reconstruction or acquisition relief

     (1)    Schedule 7 provides for relief from stamp duty land tax.

     (2)    In that Schedule—

                    Part 1 makes provision for group relief,

                    Part 2 makes provision for reconstruction and acquisition reliefs.

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     (3)    Any relief under that Schedule must be claimed in a land transaction return or

an amendment of such a return.

 63    Demutualisation of insurance company

     (1)    A land transaction is exempt from charge if it is entered into for the purposes

of or in connection with a qualifying transfer of the whole or part of the

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business of a mutual insurance company (“the mutual”) to a company that has

share capital (“the acquiring company”).

     (2)    A transfer is a qualifying transfer if—

           (a)           it is a transfer of business consisting of the effecting or carrying out of

contracts of insurance and takes place under an insurance business

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transfer scheme, or

           (b)           it is a transfer of business of a general insurance company carried on

through a permanent establishment in the United Kingdom and takes

place in accordance with authorisation granted outside the United

Kingdom for the purposes of—

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                  (i)                 Article 14 of the life assurance Directive, or

                  (ii)                Article 12 of the 3rd non-life insurance Directive,

            and, in either case, the requirements of subsections (3) and (4) are met in

relation to the shares of a company (“the issuing company”) which is either the

acquiring company or a company of which the acquiring company is a wholly-

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owned subsidiary.

     (3)    Shares in the issuing company must be offered, under the scheme, to at least

90% of the persons who are members of the mutual immediately before the

transfer.

     (4)    Under the scheme all of the shares in the issuing company that will be in issue

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immediately after the transfer has been made, other than shares that are to be

or have been issued pursuant to an offer to the public, must be offered to the

persons who (at the time of the offer) are—

           (a)           members of the mutual,

           (b)           persons who are entitled to become members of the mutual, or

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           (c)           employees, former employees or pensioners of—

                  (i)                 the mutual, or

                  (ii)                a wholly-owned subsidiary of the mutual.

     (5)    The Treasury may by regulations—

           (a)           amend subsection (3) by substituting a lower percentage for the

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percentage mentioned there;

           (b)           provide that any or all of the references in subsections (3) and (4) to

members shall be construed as references to members of a class

specified in the regulations.

            Regulations under paragraph (b) may make different provision for different

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cases.

 

 

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     (6)    For the purposes of this section a company is the wholly-owned subsidiary of

another company (“the parent”) if the company has no members except the

parent and the parent’s wholly-owned subsidiaries or persons acting on behalf

of the parent or the parent’s wholly-owned subsidiaries.

     (7)    In this section—

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                    “contract of insurance” has the meaning given by Article 3(1) of the

Financial Services and Markets Act 2000 (Regulated Activities) Order

2001 (S.I. 2001/544);

                    “employee”, in relation to a mutual insurance company or its wholly-

owned subsidiary, includes any officer or director of the company or

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subsidiary and any other person taking part in the management of the

affairs of the company or subsidiary;

                    “general insurance company” means a company that has permission

under Part 4 of the Financial Services and Markets Act 2000 (c. 8), or

paragraph 15 of Schedule 3 to that Act (as a result of qualifying for

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authorisation under paragraph 12(1) of that Schedule), to effect or carry

out contracts of insurance;

                    “insurance company” means a company that carries on the business of

effecting or carrying out contracts of insurance;

                    “insurance business transfer scheme” has the same meaning as in Part 7 of

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the Financial Services and Markets Act 2000;

                    “the life assurance Directive” means the Council Directive of 5th

November 2002 concerning life assurance (No.2002/83/EC);

                    “mutual insurance company” means an insurance company carrying on

business without having any share capital;

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                    “the 3rd non-life insurance Directive” means the Council Directive of 18th

June 1992 on the co-ordination of laws, regulations and administrative

provisions relating to direct insurance other than life insurance and

amending Directives 73/239/EEC and 88/357/EEC (No. 92/49/EEC);

                    “pensioner”, in relation to a mutual insurance company or its wholly-

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owned subsidiary, means a person entitled (whether presently or

prospectively) to a pension, lump sum, gratuity or other like benefit

referable to the service of any person as an employee of the company or

subsidiary.

 64    Demutualisation of building society

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A land transaction effected by section 97(6) or (7) of the Building Societies Act

1986 (c. 53) (transfer of building society’s business to a commercial company)

is exempt from charge.

 65    Incorporation of limited liability partnership

     (1)    A transaction by which a chargeable interest is transferred by a person (“the

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transferor”) to a limited liability partnership in connection with its

incorporation is exempt from charge if the following three conditions are met.

     (2)    The first condition is that the effective date of the transaction is not more than

one year after the date of incorporation of the limited liability partnership.

     (3)    The second condition is that at the relevant time the transferor—

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           (a)           is a partner in a partnership comprised of all the persons who are or are

to be members of the limited liability partnership (and no-one else), or

 

 

Finance Bill
Part 4 — Stamp duty land tax

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           (b)           holds the interest transferred as nominee or bare trustee for one or more

of the partners in such a partnership.

     (4)    The third condition is that—

           (a)           the proportions of the interest transferred to which the persons

mentioned in subsection (3)(a) are entitled immediately after the

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transfer are the same as those to which they were entitled at the

relevant time, or

           (b)           none of the differences in those proportions has arisen as part of a

scheme or arrangement of which the main purpose, or one of the main

purposes, is avoidance of liability to any duty or tax.

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     (5)    In this section “the relevant time” means—

           (a)           where the transferor acquired the interest after the incorporation of the

limited liability partnership, immediately after he acquired it, and

           (b)           in any other case, immediately before its incorporation.

     (6)    In this section “limited liability partnership” means a limited liability

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partnership formed under the Limited Liability Partnerships Act 2000 (c. 12) or

the Limited Liability Partnerships Act (Northern Ireland) 2002 (c. 12 (N. I.)).

 66    Transfers involving public bodies

     (1)    A land transaction entered into on, or in consequence of, or in connection with,

a reorganisation effected by or under a statutory provision is exempt from

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charge if the purchaser and vendor are both public bodies.

     (2)    The Treasury may by order provide that a land transaction that is not entered

into as mentioned in subsection (1) is exempt from charge if—

           (a)           the transaction is effected by or under a prescribed statutory provision,

and

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           (b)           either the purchaser or the vendor is a public body.

            In this subsection “prescribed” means prescribed in an order made under this

subsection.

     (3)    A “reorganisation” means changes involving—

           (a)           the establishment, reform or abolition of one or more public bodies,

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           (b)           the creation, alteration or abolition of functions to be discharged or

discharged by one or more public bodies, or

           (c)           the transfer of functions from one public body to another.

     (4)    The following are public bodies for the purposes of this section—

Government, Parliament etc

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            A Minister of the Crown

            The Scottish Ministers

            A Northern Ireland department

            The National Assembly for Wales

            The Corporate Officer of the House of Lords

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            The Corporate Officer of the House of Commons

            The Scottish Parliamentary Corporate Body

            The Northern Ireland Assembly Commission

Local government: England

 

 

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            A county or district council constituted under section 2 of the Local

Government Act 1972 (c. 70)

            The council of a London borough

            The Greater London Authority

            The Common Council of the City of London

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            The Council of the Isles of Scilly

            Local government: Wales

            A county or county borough council constituted under section 21 of the Local

Government Act 1972

Local government: Scotland

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            A council constituted under section 2 of the Local Government etc. (Scotland)

Act 1994 (c. 39)

Local government: Northern Ireland

            A district council within the meaning of the Local Government Act (Northern

Ireland) 1972 (c. 9 (N.I.))

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Health: England and Wales

            A Strategic Health Authority or Health Authority established under section 8

of the National Health Service Act 1977 (c. 49)

            A Special Health Authority established under section 11 of that Act

            A Primary Care Trust established under section 16A of that Act

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            A Local Health Board established under section 16BA of that Act

            A National Health Service Trust established under section 5 of the National

Health Service and Community Care Act 1990 (c. 19)

Health: Scotland

            The Common Services Agency established under section 10(1) of the National

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Health Service (Scotland) Act 1978 (c. 29)

            A Health Board established under section 2(1)(a) of that Act

            A National Health Service Trust established under section 12A(1) of that Act

            A Special Health Board established under section 2(1)(b) of that Act

Health: Northern Ireland

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            A Health and Social Services Board established under Article 16 of the Health

and Personal Social Services (Northern Ireland) Order 1972 (S.I. 1972/1265

(N.I. 14))

            A Health and Social Services Trust established under Article 10 of the Health

and Personal Social Services (Northern Ireland) Order 1991 (S.I. 1991/194

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(N.I. 1))

            Other planning authorities

            Any other authority that—

           (a)           is a local planning authority within the meaning of the Town and

Country Planning Act 1990 (c. 8), or

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           (b)           is the planning authority for any of the purposes of the planning Acts

within the meaning of the Town and Country Planning (Scotland) Act

1997 (c. 8)

            Statutory bodies

            A body (other than a company) that is established by or under a statutory

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provision for the purpose of carrying out functions conferred on it by or under

a statutory provision

Prescribed persons

            A person prescribed for the purposes of this section by Treasury order

 

 

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     (5)    In this section references to a public body include—

           (a)           a company in which all the shares are owned by such a body, and

           (b)           a wholly-owned subsidiary of such a company.

 67    Transfer in consequence of reorganisation of parliamentary constituencies

     (1)    Where—

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           (a)           an Order in Council is made under the Parliamentary Constituencies

Act 1986 (c. 56) (orders specifying new parliamentary constituencies),

and

           (b)           an existing local constituency association transfers a chargeable interest

to—

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                  (i)                 a new association that is a successor to the existing association,

or

                  (ii)                a related body that as soon as practicable transfers the interest

or right to a new association that is a successor to the existing

association,

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            the transfer, or where paragraph (b)(ii) applies each of the transfers, is exempt

from charge.

     (2)    In relation to any such order as is mentioned in subsection (1)(a)—

           (a)           “the date of the change” means the date on which the order comes into

operation;

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           (b)           “former parliamentary constituency” means an area that, for the

purposes of parliamentary elections, was a constituency immediately

before that date but is no longer such a constituency after that date;

           (c)           “new parliamentary constituency” means an area that, for the purposes

of parliamentary elections, is such a constituency after that date but

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was not such a constituency immediately before that date.

     (3)    In relation to the date of the change—

           (a)           “existing local constituency association” means a local constituency

association whose area was the same, or substantially the same, as the

area of a former parliamentary constituency or two or more such

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constituencies, and

           (b)           “new association” means a local constituency association whose area is

the same, or substantially the same, as that of a new parliamentary

constituency or two or more such constituencies.

     (4)    In this section—

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           (a)           “local constituency association” means an unincorporated association

(whether described as an association, a branch or otherwise) whose

primary purpose is to further the aims of a political party in an area that

at any time is or was the same or substantially the same as the area of a

parliamentary constituency or two or more parliamentary

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constituencies, and

           (b)           “related body”, in relation to such an association, means a body

(whether corporate or unincorporated) that is an organ of the political

party concerned.

     (5)    For the purposes of this section a new association is a successor to an existing

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association if any part of the existing association’s area is comprised in the new

association’s area.

 

 

 
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