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Finance Bill
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 68    Charities relief

     (1)    Schedule 8 provides for relief from stamp duty land tax for acquisitions by

charities.

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

an amendment of such a return.

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 69    Acquisition by bodies established for national purposes

A land transaction is exempt from charge if the purchaser is any of the

following—

           (a)           the Historic Buildings and Monuments Commission for England;

           (b)           the National Endowment for Science, Technology and the Arts;

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           (c)           the Trustees of the British Museum;

           (d)           the Trustees of the National Heritage Memorial Fund;

           (e)           the Trustees of the Natural History Museum.

 70    Right to buy transactions, shared ownership leases etc

Schedule 9 makes provision for relief in the case of right to buy transactions,

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shared ownership leases and certain related transactions.

 71    Certain acquisitions by registered social landlord

     (1)    A land transaction under which the purchaser is a registered social landlord is

exempt from charge if—

           (a)           the registered social landlord is controlled by its tenants,

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           (b)           the vendor is a qualifying body, or

           (c)           the transaction is funded with the assistance of a public subsidy.

     (2)    The reference in subsection (1)(a) to a registered social landlord “controlled by

its tenants” is to a registered social landlord the majority of whose board

members are tenants occupying properties owned or managed by it.

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            “Board member”, in relation to a registered social landlord, means—

           (a)           if it is a company, a director of the company,

           (b)           if it is a body corporate whose affairs are managed by its members, a

member,

           (c)           if it is body of trustees, a trustee,

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           (d)           if it is not within paragraphs (a) to (c), a member of the committee of

management or other body to which is entrusted the direction of the

affairs of the registered social landlord.

     (3)    In subsection (1)(b) “qualifying body” means—

           (a)           a registered social landlord,

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           (b)           a housing action trust established under Part 3 of the Housing Act 1988

(c. 50),

           (c)           a principal council within the meaning of the Local Government Act

1972 (c. 70),

           (d)           the Common Council of the City of London,

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           (e)           the Scottish Ministers,

           (f)           a council constituted under section 2 of the Local Government etc.

(Scotland) Act 1994 (c. 39),

 

 

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           (g)           Scottish Homes,

           (h)           the Department for Social Development in Northern Ireland, or

           (i)           the Northern Ireland Housing Executive.

     (4)    In subsection (1)(c) “public subsidy” means any grant or other financial

assistance—

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           (a)           made or given by way of a distribution pursuant to section 25 of the

National Lottery etc. Act 1993 (c. 39) (application of money by

distributing bodies),

           (b)           under section 18 of the Housing Act 1996 (c. 52) (social housing grants),

           (c)           under section 126 of the Housing Grants, Construction and

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Regeneration Act 1996 (c. 53) (financial assistance for regeneration and

development),

           (d)           under section 2 of the Housing (Scotland) Act 1988 (c. 43) (general

functions of the Scottish Ministers), or

           (e)           under Article 33 of the Housing (Northern Ireland) Order 1992 (S.I.

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1992/1725 (N.I. 15)).

 72    Alternative property finance: land sold to financial institution and leased to

individual

     (1)    This section applies where arrangements are entered into between an

individual and a financial institution under which the institution—

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           (a)           purchases a major interest in land (“the first transaction”),

           (b)           grants to the individual out of that interest a lease (if the interest

acquired is freehold) or a sub-lease (if the interest acquired is leasehold)

(“the second transaction”), and

           (c)           enters into an agreement under which the individual has a right to

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require the institution or its successor in title to transfer the major

interest purchased by the institution under the first transaction.

     (2)    The first transaction is exempt from charge if the vendor is—

           (a)           the individual, or

           (b)           another financial institution by whom the interest was acquired under

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arrangements of the kind mentioned in subsection (1) entered into

between it and the individual.

     (3)    The second transaction is exempt from charge if the provisions of this Part

relating to the first transaction are complied with (including the payment of

any tax chargeable).

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     (4)    A transfer to the individual that results from the exercise of the right

mentioned in subsection (1)(c) (“the third transaction”) is exempt from charge

if—

           (a)           the provisions of this Part relating to the first and second transactions

are complied with, and

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           (b)           at all times between the second and third transactions—

                  (i)                 the interest purchased under the first transaction is held by a

financial institution, and

                  (ii)                the lease or sub-lease granted under the second transaction is

held by the individual.

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     (5)    The agreement mentioned in subsection (1)(c) is not to be treated—

 

 

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           (a)           as substantially performed unless and until the third transaction is

entered into (and accordingly section 44(5) does not apply), or

           (b)           as a distinct land transaction by virtue of section 46 (options and rights

of pre-emption).

     (6)    The requirements of subsection (1), or (4)(b)(ii), are not met if—

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           (a)           the individual enters into the arrangement, or holds the lease or sub-

lease, as trustee and any beneficiary of the trust is not an individual, or

           (b)           the individual enters into the arrangements, or holds the lease or sub-

lease, as partner and any of the other partners is not an individual.

     (7)    In this section “financial institution” means—

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           (a)           a bank within the meaning of section 840A of the Taxes Act 1988,

           (b)           a building society within the meaning of the Building Societies Act 1986

(c. 53), or

           (c)           a wholly-owned subsidiary of a bank within paragraph (a) or a

building society within paragraph (b).

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                   For the purposes of paragraph (c) a company is a wholly-owned subsidiary of

a bank or building society (“the parent”) if it 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.

     (8)    In the application of this section to Scotland—

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           (a)           the reference to a freehold interest is a reference to the interest of the

owner, and

           (b)           the reference to a leasehold interest is to a tenant’s right over or interest

in a property subject to a lease.

            Until the appointed day for the purposes of the Abolition of Feudal Tenure etc.

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(Scotland) Act 2000 (asp 5), the reference in paragraph (a) to the interest of the

owner shall be read, in relation to feudal property, as a reference to the estate

or interest of the proprietor of the dominium utile.

     (9)    References in this section to an individual shall be read, in relation to times

after the death of the individual concerned, as references to his personal

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representatives.

 73    Alternative property finance: land sold to financial institution and re-sold to

individual

     (1)    This section applies where arrangements are entered into between an

individual and a financial institution under which—

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           (a)           the institution—

                  (i)                 purchases a major interest in land (“the first transaction”), and

                  (ii)                sells that interest to the individual (“the second transaction”),

and

           (b)           the individual grants the institution a legal mortgage over that interest.

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     (2)    The first transaction is exempt from charge if the vendor is—

           (a)           the individual concerned, or

           (b)           another financial institution by whom the interest was acquired under

other arrangements of the kind mentioned in section 72(1) entered into

between it and the individual.

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     (3)    The second transaction is exempt from charge if the financial institution

complies with the provisions of this Part relating to the first transaction

(including the payment of any tax chargeable).

     (4)    This section does not apply if—

           (a)           the individual enters into the arrangements as trustee and any

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beneficiary of the trust is not an individual, or

           (b)           the individual enters into the arrangements as partner and any of the

other partners is not an individual.

     (5)    In this section—

           (a)           “financial institution” has the same meaning as in section 72;

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           (b)           “legal mortgage”—

                  (i)                 in relation to land in England or Wales, means a legal mortgage

as defined in section 205(1)(xvi) of the Law of Property Act 1925

(c. 20);

                  (ii)                in relation to land in Scotland, means a standard security;

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                  (iii)               in relation to land in Northern Ireland, means a mortgage by

conveyance of a legal estate or by demise or sub-demise or a

charge by way of legal mortgage.

     (6)    References in this section to an individual shall be read, in relation to times

after the death of the individual concerned, as references to his personal

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representatives.

 74    Collective enfranchisement by leaseholders

     (1)    This section applies where a chargeable transaction is entered into by an RTE

company in pursuance of a right of collective enfranchisement.

     (2)    In that case, the rate of tax is determined by reference to the fraction of the

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relevant consideration produced by dividing the total amount of that

consideration by the number of flats in respect of which the right of collective

enfranchisement is being exercised.

     (3)    The tax chargeable is then determined by applying that rate to the chargeable

consideration for the transaction.

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     (4)    In this section—

           (a)           “RTE company” has the meaning given by section 4A of the Leasehold

Reform, Housing and Urban Development Act 1993 (c. 28);

           (b)           “right of collective enfranchisement” means the right exercisable by an

RTE company under—

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                  (i)                 Part 1 of the Landlord and Tenant Act 1987 (c. 31), or

                  (ii)                Chapter 1 of Part 1 of the Leasehold Reform, Housing and

Urban Development Act 1993 (c. 28); and

           (c)           “flat” has the same meaning as in the Act conferring the right of

collective enfranchisement.

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     (5)    References in this section to the relevant consideration have the same meaning

as in section 55.

 75    Crofting community right to buy

     (1)    This section applies where—

 

 

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           (a)           a chargeable transaction is entered into in pursuance of the crofting

community right to buy, and

           (b)           under that transaction two or more crofts are being bought.

     (2)    In that case, the rate of tax is determined by reference to the fraction of the

relevant consideration produced by dividing the total amount of that

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consideration by the number of crofts being bought.

     (3)    The tax chargeable is then determined by applying that rate to the amount of

the chargeable consideration for the transaction in question.

     (4)    In this section “crofting community right to buy” means the right exercisable

by a crofting community body under Part 3 of the Land Reform (Scotland) Act

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2003 (asp 2).

     (5)    References in this section to the relevant consideration have the same meaning

as in section 55.

Returns and other administrative matters

 76    Duty to deliver land transaction return

15

     (1)    In the case of every notifiable transaction the purchaser must deliver a return

(a “land transaction return”) to the Inland Revenue before the end of the period

of 30 days after the effective date of the transaction.

     (2)    The Inland Revenue may by regulations amend subsection (1) so as to require

a land transaction return to be delivered before the end of such shorter period

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after the effective date of the transaction as may be prescribed or, if the

regulations so provide, on that date.

     (3)    A land transaction return in respect of a chargeable transaction must—

           (a)           include an assessment (a “self-assessment”) of the tax that, on the basis

of the information contained in the return, is chargeable in respect of

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the transaction, and

           (b)           be accompanied by payment of the amount chargeable.

 77    Notifiable transactions

     (1)    This section specifies what land transactions are notifiable.

     (2)    The grant of a lease is notifiable if—

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           (a)           the lease is for a contractual term of seven years or more and is granted

for chargeable consideration, or

           (b)           the lease is for a contractual term of less than seven years and either—

                  (i)                 the chargeable consideration consists or includes a premium in

respect of which tax is chargeable at a rate of 1% or higher, or

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                  (ii)                the chargeable consideration consists of or includes rent in

respect of which tax is chargeable at a rate of 1% or higher,

                         or, in either case, in respect of which tax would be so chargeable but for

a relief.

     (3)    Any other acquisition of a major interest in land is notifiable unless it is exempt

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from charge under Schedule 3.

 

 

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     (4)    An acquisition of a chargeable interest other than a major interest in land is

notifiable if there is chargeable consideration in respect of which tax is

chargeable at a rate of 1% or higher, or in respect of which tax would be so

chargeable but for a relief.

 78    Returns, enquiries, assessments and related matters

5

     (1)    Schedule 10 has effect with respect to land transaction returns, assessments

and related matters.

     (2)    In that Schedule—

                    Part 1 contains general provisions about returns;

                    Part 2 imposes a duty to keep and preserve records;

10

                    Part 3 makes provision for enquiries into returns;

                    Part 4 provides for a Revenue determination if no return is delivered;

                    Part 5 provides for Revenue assessments;

                    Part 6 provides for relief in case of excessive assessment; and

                    Part 7 provides for appeals against Revenue decisions on tax.

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     (3)    The Treasury may by regulations make such amendments of that Schedule,

and such consequential amendments of any other provisions of this Part, as

appear to them to be necessary or expedient from time to time.

 79    Registration of land transactions etc

     (1)    A land transaction to which this section applies, or (as the case may be) a

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document effecting or evidencing a land transaction to which this section

applies, shall not be registered, recorded or otherwise reflected in an entry

made—

           (a)           in England and Wales, in the register of title maintained by the Chief

Land Registrar,

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           (b)           in Scotland, in any register maintained by the Keeper of the Registers of

Scotland, or

           (c)           in Northern Ireland, in any register maintained by the Land Registry of

Northern Ireland or in the Registry of Deeds for Northern Ireland,

            unless there is produced, together with the relevant application, a certificate as

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to compliance with the requirements of this Part in relation to the transaction.

            This does not apply where the entry is required to be made without any

application or so far as the entry relates to an interest or right other than the

chargeable interest acquired by the purchaser under the land transaction that

gives rise to the application.

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     (2)    This section applies to every land transaction other than—

           (a)           a contract for a land transaction under which the transaction is to be

completed by a conveyance, or

           (b)           a transfer of rights (within the meaning of section 45) under such a

contract.

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            In this subsection “contract” includes any agreement and “conveyance”

includes any instrument.

     (3)    The certificate must be either—

           (a)           a certificate by the Inland Revenue (a “Revenue certificate”) that a land

transaction return has been delivered in respect of the transaction, or

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           (b)           a certificate by the purchaser (a “self-certificate”) that no land

transaction return is required in respect of the transaction.

     (4)    The Inland Revenue may make provision by regulations about Revenue

certificates.

            The regulations may, in particular—

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           (a)           make provision as to the conditions to be met before a certificate is

issued;

           (b)           prescribe the form and content of the certificate;

           (c)           make provision about the issue of duplicate certificates if the original is

lost or destroyed;

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           (d)           provide for the issue of multiple certificates where a return is made

relating to more than one transaction.

     (5)    Schedule 11 makes further provision about self-certificates.

            In that Schedule—

                    Part 1 contains general provisions,

15

                    Part 2 imposes a duty to keep and preserve records, and

                    Part 3 makes provision for enquiries into self-certificates.

     (6)    The registrar (in Scotland, the Keeper of the Registers of Scotland)—

           (a)           shall allow the Inland Revenue to inspect any certificates or self-

certificates produced to him under this section and in his possession,

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and

           (b)           may enter into arrangements for affording the Inland Revenue other

information and facilities for verifying that the requirements of this

Part have been complied with.

 80    Adjustment where contingency ceases or consideration is ascertained

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     (1)    Where section 51 (contingent, uncertain or unascertained consideration)

applies in relation to a transaction and—

           (a)           in the case of contingent consideration, the contingency occurs or it

becomes clear that it will not occur, or

           (b)           in the case of uncertain or unascertained consideration, an amount

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relevant to the calculation of the consideration, or any instalment of

consideration, becomes ascertained,

            the following provisions have effect to require or permit reconsideration of

how this Part applies to the transaction (and to any transaction in relation to

which it is a linked transaction).

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     (2)    If the effect of the new information is that a transaction becomes notifiable or

chargeable, or that additional tax is payable in respect of a transaction or that

tax is payable where none was payable before—

           (a)           the purchaser must make a return to the Inland Revenue within 30

days,

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           (b)           the return must contain a self-assessment of the 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

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           (d)           the return must be accompanied by payment of the tax or additional tax

payable.

 

 

 
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