Finance Act 2003 Part 1 Excise duties Tobacco products duty Rates of tobacco products duty 1 1 For the Table of rates of duty in Schedule 1 to the Tobacco Products Duty Act 1979 (c. 7) substitute— Table 1. Cigarettes An amount equal to 22 per cent of the retail price plus £96.88 per thousand cigarettes. 2. Cigars £141.10 per kilogram. 3. Hand-rolling tobacco £101.42 per kilogram. 4. Other smoking tobacco and chewing tobacco £62.03 per kilogram. 2 This section shall be deemed to have come into force at 6 o'clock in the evening of 9th April 2003. Alcoholic liquor duties Rate of duty on beer 2 1 In section 36(1AA)(a) of the Alcoholic Liquor Duties Act 1979 (c. 4) (rate of duty on beer), for “£11.89” substitute “ £12.22 ” . 2 This section shall be deemed to have come into force at midnight on 13th April 2003. Rates of duty on wine and made-wine 3 1 For Part 1 of the Table of rates of duty in Schedule 1 to the Alcoholic Liquor Duties Act 1979 (rates of duty on wine and made-wine) substitute— Part 1 Wine and made-wine of a strength not exceeding 22 per cent Description of wine or made-wine Rates of duty per hectolitre £ Wine or made-wine of a strength not exceeding 4 per cent 48.91 Wine or made-wine of a strength exceeding 4 per cent but not exceeding 5.5 per cent 67.25 Wine or made-wine of a strength exceeding 5.5 per cent but not exceeding 15 per cent and not sparkling 158.69 Sparkling wine or sparkling made-wine of a strength exceeding 5.5 per cent but less than 8.5 per cent 166.70 Sparkling wine or sparkling made-wine of a strength of 8.5 per cent or of a strength exceeding 8.5 per cent but not exceeding 15 per cent 220.54 Wine or made-wine of a strength exceeding 15 per cent but not exceeding 22 per cent 211.58 2 This section shall be deemed to have come into force at midnight on 13th April 2003. Hydrocarbon oil duties Rates of hydrocarbon oil duties 4 1 In section 6(1A) of the Hydrocarbon Oil Duties Act 1979 (c. 5) (rates of duty)— a in paragraph (a) (ultra low sulphur petrol) for “£0.4582” substitute “ £0.4710 ” , b in paragraph (b) (other light oil) for “£0.5468” substitute “ £0.5620 ” , c in paragraph (c) (ultra low sulphur diesel) for “£0.4582” substitute “ £0.4710 ” , and d in paragraph (d) (other heavy oil) for “£0.5182” substitute “ £0.5327 ” . 2 In section 6AA(3) of that Act (biodiesel duty) for “£0.2582” substitute “ £0.2710 ” . 3 In section 13A(1) of that Act (rebate on unleaded petrol) for “£0.0586” substitute “ £0.0601 ” . 4 This section shall come into force on 1st October 2003. Rebates on hydrocarbon oil duties 5 1 In section 11(1) of the Hydrocarbon Oil Duties Act 1979 (rebate on heavy oil)— a in paragraph (a) (fuel oil) for “£0.0274” substitute “ £0.0382 ” , b in paragraph (b) (gas oil: general) for “£0.0313” substitute “ £0.0422 ” , and c in paragraph (ba) (ultra low sulphur diesel) for “£0.0313” substitute “ £0.0422 ” . 2 In section 14(1) of that Act (furnace fuel) for “£0.0274” substitute “ £0.0382 ” . 3 This section shall be deemed to have come into force at 6 o'clock in the evening of 9th April 2003. Betting and gaming duties General betting duty and pool betting duty: relief for losses 6 1 Part 1 of the Betting and Gaming Duties Act 1981 (c. 63) (betting duties) is amended as follows. 2 In section 5 (net stake receipts) at the end of subsection (3) (negative net stake receipts to be disregarded) insert “ except as provided for by section 5AA ” . 3 After that section insert— Relief for losses 5AA 1 This section applies where the amount of a person’s net stake receipts for an accounting period in respect of a class of bets (calculated in accordance with section 5(1)) is a negative amount. 2 That amount shall be carried forward to the following accounting period and, to the extent that it does not exceed it, deducted from the amount of the person’s net stake receipts in respect of the same class of bets for that period. 3 If the amount of those net stake receipts for that following accounting period— a is not a positive amount, or b is less than the amount carried forward, the amount carried forward or, as the case may be, the balance of it shall be treated for the purposes of this section as if it were a negative amount of net stake receipts for that period in respect of the same class of bets. . 4 Omit section 5A (multiple bets) (which becomes unnecessary as a result of the amendment made by subsection (3) above). 5 After section 7 (duty charged on net pool betting receipts) insert— Relief for losses 7ZA 1 This section applies where the amount of a person’s net pool betting receipts for an accounting period is a negative amount. 2 That amount shall be carried forward to the following accounting period and, to the extent that it does not exceed it, deducted from the amount of the person’s net pool betting receipts for that period. 3 If the amount of the net pool betting receipts for that following accounting period— a is not a positive amount, or b is less than the amount carried forward, the amount carried forward or, as the case may be, the balance of it shall be treated for the purposes of this section as if it were a negative amount of net pool betting receipts for that period. . 6 The amendments made by this section apply in relation to any accounting period beginning on or after 1st September 2003 for which the net stake receipts in respect of a particular class of bets, or (as the case may be) the net pool betting receipts, is a negative amount. General betting duty: betting exchanges 7 1 Part 1 of the Betting and Gaming Duties Act 1981 (c. 63) (betting duties) is amended as follows. 2 After section 5AA (inserted by section 6 above) insert— Betting exchanges 5AB 1 This section applies where— a one person makes a bet with another person using facilities provided by a third person in the course of a business, and b that business is one that does not involve the provision of premises for use by persons making or taking bets. 2 General betting duty shall be charged on the amounts (“ commission charges ”) that the parties to the bet are charged, whether by deduction from winnings or otherwise, for using those facilities. 3 No deductions shall be allowed from commission charges. 4 The amount of duty charged under this section in respect of bets determined in an accounting period shall be 15 per cent of the commission charges relating to those bets. 5 For the purposes of this section, and section 5B(4) so far as relating to this section, a person who arranges for facilities relating to a bet to be provided by another person shall be treated as providing them himself (and the other person shall not). . 3 In section 5B (liability to pay)— a for subsection (1) substitute— 1 All general betting duty chargeable in respect of— a bets made in an accounting period, or b in the case of duty chargeable under section 5AB, bets determined in an accounting period, shall become due at the end of that period. ; b in subsection (4), after “section 4(1) to (3)” insert “ or 5AB ” . 4 In section 5C (bet-brokers)— a in paragraph (a) of subsection (1) (application of section) after “in the course of a business” insert “ , other than a betting-exchange business, ” ; b at the end of that subsection insert— “ In paragraph (a) “ betting-exchange business ” means a business such as is mentioned in section 5AB(1). ” ; c omit subsections (2) (bet treated as made between bettor and bet-broker) and (3) (subsection (2) not to apply to off-course bets where bet-taker is a bookmaker); d in subsection (4) omit the words “In the case of a bet which is excluded from subsection (2) by virtue of subsection (3),”. 5 The amendments made by this section apply in relation to any accounting period beginning on or after 1st June 2003. 6 Those amendments do not apply in relation to a bet (a “ straddling bet ”) that is— a made, using facilities provided by a person (“ the broker ”), in an accounting period of the broker beginning before 1st June 2003, but b not determined until an accounting period of the broker beginning on or after that date. 7 Any winnings paid in respect of a straddling bet to which section 5AB of the Betting and Gaming Duties Act 1981 (c. 63) would apply but for subsection (6) above shall be treated for the purposes of that Act as paid in the broker’s accounting period in which the bet was made (“ the earlier accounting period ”). 8 Subsection (7) shall not have effect to reduce the general betting duty payable by the broker for the earlier accounting period; but the amount of the reduction that would (but for this subsection) have been made for that period shall be set against any liability of the broker to general betting duty for accounting periods in the following three years, taking earlier periods before later ones until the amount is exhausted. General betting duty: restriction of exemption for on-course bets 8 1 In section 12(4) of the Betting and Gaming Duties Act 1981 (general betting duty: supplementary provisions), in the definition of “on-course bet” for “a meeting” substitute “ a horse or dog race meeting ” . 2 This section applies to bets made on or after 1st September 2003. Bingo duty 9 1 For sections 17 to 20 of the Betting and Gaming Duties Act 1981 (bingo duty) substitute— Bingo duty 17 1 A duty of excise, to be known as bingo duty, shall be charged— a on the playing of bingo in the United Kingdom, and b at the rate of 15 per cent of a person’s bingo promotion profits for an accounting period. 2 Subsection (1) is subject to the exemptions specified in Part 1 of Schedule 3 to this Act. 3 The amount of a person’s bingo promotion profits for an accounting period is— a the amount of the person’s bingo receipts for the period (calculated in accordance with section 19), minus b the amount of his expenditure on bingo winnings for the period (calculated in accordance with section 20). 4 Bingo duty charged in respect of a person’s bingo promotion profits shall be paid by him. 5 Where the amount that would be charged in respect of a person’s bingo promotion profits for an accounting period is less than £1, no duty shall be charged. Accounting period 18 1 For the purposes of section 17 an accounting period ends, and another begins, at the end of the last Sunday in each calendar month. 2 But regulations under paragraph 9 of Schedule 3 to this Act may make provision in place of subsection (1) for the purposes of the application of section 17 to specified persons or in specified circumstances. 3 Regulations made by virtue of subsection (2) may make transitional provision. Bingo receipts 19 1 A person has bingo receipts for an accounting period if payments fall due in the period in respect of entitlement to participate in bingo promoted by him. 2 The amount of the person’s bingo receipts for the accounting period is the aggregate of those payments. 3 For the purposes of subsections (1) and (2)— a an amount in respect of entitlement to participate in a game of bingo is to be treated as falling due in the accounting period in which the game is played, b where a payment relates to a supply of services on which value added tax is chargeable, the amount of value added tax chargeable shall be disregarded (irrespective of whether or not that amount is paid by way of value added tax), c it is immaterial whether an amount falls due to be paid to the promoter or to another person, d it is immaterial whether an amount is described as a fee for participation, as a stake, or partly as one and partly as the other, and e where a sum is paid partly in respect of entitlement to participate in a game of bingo and partly in respect of another matter— i such part of the sum as is applied to, or properly attributable to, entitlement to participate in the game shall be treated as an amount falling due in respect of entitlement to participate in the game, and ii the remainder shall be disregarded. Expenditure on bingo winnings 20 1 A person’s expenditure on bingo winnings for an accounting period is the aggregate of the values of prizes provided by him in that period by way of winnings at bingo promoted by him. 2 Where a prize is obtained by the promoter from a person not connected with him, the cost to the promoter shall be treated as the value of the prize for the purpose of subsection (1). 3 Where a prize is a voucher which— a may be used in place of money as whole or partial payment for benefits of a specified kind obtained from a specified person, b specifies an amount as the sum or maximum sum in place of which the voucher may be used, and c does not fall within subsection (2), the specified amount is the value of the voucher for the purpose of subsection (1). 4 Where a prize is a voucher (whether or not it falls within subsection (2)) it shall be treated as having no value for the purpose of subsection (1) if— a it does not satisfy subsection (3)(a) and (b), or b its use as described in subsection (3)(a) is subject to a specified restriction, condition or limitation which may make the value of the voucher to the recipient significantly less than the amount mentioned in subsection (3)(b). 5 In the case of a prize which— a is neither money nor a voucher, and b does not fall within subsection (2), the value of the prize for the purpose of subsection (1) is— i the amount which the prize would cost the promoter if obtained from a person not connected with him, or ii where no amount can reasonably be determined in accordance with sub-paragraph (i), nil. 6 For the purpose of this section— a a reference to connection between two persons shall be construed in accordance with section 839 of the Income and Corporation Taxes Act 1988 (connected persons), and b an amount paid by way of value added tax on the acquisition of a thing shall be treated as part of its cost (irrespective of whether or not the amount is taken into account for the purpose of a credit or refund). Combined bingo 20A 1 A game of bingo is “ combined bingo ” if— a it is multiple bingo within the meaning of section 1 of the Gaming (Bingo) Act 1985, or b it is played in more than one place and promoted by more than one person. 2 Payments made in respect of entitlement to participate in combined bingo shall be treated for the purposes of section 19(1) as bingo receipts only of the first promoter to whom (or at whose direction) they are paid. 3 Where money representing stakes hazarded at combined bingo is paid in an accounting period by one promoter of the bingo (“ the first promoter ”) to another (“ the second promoter ”)— a the money shall not be treated as a bingo receipt of the second promoter for the purposes of section 19(1), b the payment shall be treated as expenditure of the first promoter on bingo winnings for the accounting period for the purposes of section 20(1), and c no subsequent payment of all or part of the money shall be treated as expenditure on bingo winnings for the purposes of section 20(1) (whether paid by the second promoter to another person, by the first promoter having received it from the second promoter, or otherwise). 4 Subsections (2) and (3) shall apply only where the combined bingo is played entirely in the United Kingdom. Carrying losses forward 20B 1 Where the calculation of a person’s bingo promotion profits for an accounting period results in a negative amount (“ the loss ”)— a no bingo duty shall be chargeable in respect of that accounting period, and b for the purpose of section 17(3), the amount of the person’s expenditure on bingo winnings for the next accounting period shall be increased by the amount of the loss. 2 Subsection (1) applies to an accounting period whether or not the loss results wholly or partly from the previous application of that subsection. Supplementary 20C 1 Part 2 of Schedule 3 to this Act (bingo duty: supplementary) shall have effect. 2 In sections 17 to 20B above, this section and Schedule 3— “ bingo ” includes any version of that game, whatever name it is called, “ licensed bingo ” means bingo played at premises licensed under— the Gaming Act 1968, or Chapter II of Part III of the Betting, Gaming, Lotteries and Amusements (Northern Ireland) Order 1985, “ prize ” means anything won at bingo, and “ United Kingdom ” includes the territorial sea of the United Kingdom. 3 For the purposes of those provisions, except in relation to combined bingo, the promoter of a game of bingo is— a in the case of licensed bingo, the holder of the licence, and b in the case of non-licensed bingo, the person who provides the facilities for the game. 4 For the purposes of those provisions in relation to combined bingo a person promotes a game of bingo if he is wholly or partly responsible for organising it or for providing facilities for it. 5 In those provisions a reference to entitlement to participate in a game of bingo includes a reference to an opportunity to participate in a game of bingo in respect of which a charge is made (whether by way of a fee for participation, a stake, or both). 6 In proceedings relating to bingo duty under the customs and excise Acts an averment in any process that a particular game is a version of bingo shall, until the contrary is proved, be sufficient evidence that it is. . 2 In paragraph 1 of Schedule 3 to the Betting and Gaming Duties Act 1981 (c. 63) (bingo duty: exemptions: domestic bingo) for “Bingo duty shall not be charged in respect of” substitute “ In calculating liability to bingo duty no account shall be taken of ” . 3 For paragraph 2 of Schedule 3 to the Betting and Gaming Duties Act 1981 (bingo duty: exemptions: small-scale bingo) substitute— Small-scale bingo 2 1 This paragraph applies where entitlement to participate in non-licensed bingo depends on a person’s being— a a member of a group or organisation, b a guest of a member of a group or organisation, or c a guest of a group or organisation. 2 Payments in respect of entitlement to participate in the non-licensed bingo shall not be brought into account in relation to any person for the purpose of section 19. 3 Winnings at the non-licensed bingo shall not be brought into account in relation to any person for the purpose of section 20. Small-scale bingo 2A 1 In the case of non-licensed bingo to which paragraph 2 does not apply— a payments in respect of entitlement to participate in the non-licensed bingo shall not be brought into account in relation to any person for the purpose of section 19 (subject to sub-paragraphs (2) to (5) below), and b winnings at the non-licensed bingo shall not be brought into account in relation to any person for the purpose of section 20 (subject to sub-paragraphs (2) to (5) below). 2 If on a day winnings at non-licensed bingo promoted by a person exceed £500, sub-paragraph (1) shall not apply in relation to the person in respect of the accounting period in which that day falls and the next two accounting periods. 3 If stakes exceeding in aggregate £500 are hazarded on a day at non-licensed bingo promoted by a person, sub-paragraph (1) shall not apply in relation to the person in respect of the accounting period in which that day falls and the next two accounting periods. 4 If in an accounting period winnings at non-licensed bingo promoted by a person exceed £7,500, sub-paragraph (1) shall not apply in relation to the person in respect of that accounting period and the next two accounting periods. 5 If stakes exceeding in aggregate £7,500 are hazarded in an accounting period at non-licensed bingo promoted by a person, sub-paragraph (1) shall not apply in relation to the person in respect of that accounting period and the next two accounting periods. 6 For the purposes of this paragraph winnings at bingo shall be valued in accordance with section 20(2) to (6). . 4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 In paragraph 5(1) of Schedule 3 to the Betting and Gaming Duties Act 1981 (c. 63) (bingo duty: exemptions: commercial amusements) for “Bingo duty shall not be charged in respect of” substitute “ In calculating liability to bingo duty no account shall be taken of ” . 6 In paragraph 6 of Schedule 3 to that Act (bingo duty: exemptions: machine bingo) for “Bingo duty shall not be charged in respect of” substitute “ In calculating liability to bingo duty no account shall be taken of ” . 7 In paragraph 10(1) of Schedule 3 to that Act (notification and registration of bingo-promoters) for “which will, or may, be chargeable with bingo duty” substitute “ in connection with which bingo duty may be chargeable ” . 8 The following paragraphs of Schedule 3 to that Act shall cease to have effect— a paragraph 11 (announcement of prizes), b paragraph 12 (records), and c paragraph 15 (disputes). 9 In paragraph 16(2) of Schedule 3 to that Act (enforcement)— a for “(being bingo which is or may be chargeable with bingo duty)” substitute “ (being bingo in connection with which bingo duty may be chargeable) ” , and b paragraph (b) (and the word “or” immediately before it) shall cease to have effect. 10 This section shall have effect in relation to bingo played on or after 27th October 2003 (with which day the first accounting period for the purposes of section 17 of the Betting and Gaming Duties Act 1981 shall begin). Amusement machines not operated by coins or tokens 10 1 In section 21 of the Betting and Gaming Duties Act 1981 (amusement machine licences), for subsections (3B) to (3D) (meaning of “fifty-penny machine”) substitute— 3B For the purposes of this section an amusement machine is a “ fifty-penny machine ” if, and only if— a where it is a machine on which a game can be played solo, the cost for each time the game is played on it solo— i does not exceed 50p, or ii where the machine provides differing numbers of games in different circumstances, cannot exceed 50p; and b where it is a machine on which a game can be played by more than one person at a time, the cost per player for each time the game is played on it simultaneously by more than one player— i does not exceed 50p, or ii where the machine provides differing numbers of games in different circumstances, cannot exceed 50p. . 2 In section 25(1) of that Act (definition of “amusement machine”), in paragraph (c) for “coin or token” substitute “ coin, token or other thing ” . 3 In section 26(2) of that Act (interpretation), for the definitions of “two-penny machine”, “five-penny machine” and “ten-penny machine” substitute— “ two-penny machine ” means an amusement machine in relation to which the cost for each time a game is played on it— a does not exceed 2p, or b where the machine provides differing numbers of games in different circumstances, cannot exceed 2p, and “ five-penny machine ” and “ ten-penny machine ” have a corresponding meaning; . 4 In the following provisions of the Value Added Tax Act 1994 (c. 23)— a the definition of “gaming machine” in section 23(4), and b Note (3) (definition of “gaming machine”) to Group 4 of Schedule 9, for “coin or token” substitute “ coin, token or other thing ” . Amusement machines: use of currencies other than sterling 11 1 In section 26 of the Betting and Gaming Duties Act 1981 (c. 63) (interpretation etc ), omit the definition of “coin” in subsection (2). 2 After that section insert— Amounts in currencies other than sterling 26A 1 Any reference in this Part of this Act to a amount in sterling, in the context of— a the cost of playing a game, or b the amount of the prize for a game, includes a reference to the equivalent amount in another currency. 2 The equivalent amount in another currency, in relation to any day, shall be determined by reference to the London closing exchange rate for the previous day. 3 For the purposes of determining what duty is payable on an amusement machine licence in a case where this section applies, the equivalent in another currency of an amount in sterling shall be taken to be its equivalent on the day on which the application for the licence is received by the Commissioners, or the due date in the case of a default licence. 4 In subsection (3) above— “ default licence ” means a licence granted under paragraph 3(1) of Schedule 4A to this Act; “ due date ” has the meaning given by paragraph 2(4) of that Schedule. . 3 This section does not apply in relation to any amusement machine licence granted before the day on which this Act is passed or to anything done under such a licence. Responsibility for unlicensed amusement machines 12 1 In section 24(5) of the Betting and Gaming Duties Act 1981 (c. 63) (penalty for unlicensed amusement machines), for paragraph (c) (liability of person responsible for, inter alia, issuing or exchanging coins etc for amusement machine) substitute— c is a person responsible for controlling the use of any amusement machine on the premises, or . 2 In Schedule 4A to that Act (unlicensed amusement machines), for paragraph (c) of paragraph 7(3) (which makes similar provision) substitute— c responsible for controlling the use of any amusement machine on the premises, or . Rates of gaming duty 13 1 For the Table in section 11(2) of the Finance Act 1997 (c. 16) (rates of gaming duty) substitute— Table Part of gross gaming yield Rate The first £502,500 2.5 per cent. The next £1,115,500 12.5 per cent. The next £1,115,500 20 per cent. The next £1,953,000 30 per cent. The remainder 40 per cent. 2 This section has effect in relation to accounting periods beginning on or after 1st April 2003. Vehicle excise duty Vehicle excise duty: rates 14 1 In paragraph 1 of Schedule 1 to the Vehicle Excise and Registration Act 1994 (c. 22) (the general rate)— a . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . b in sub-paragraph (2A) (general rate of duty in case of vehicle with engine with cylinder capacity not exceeding 1,549 cubic centimetres) for “£105” substitute “ £110 ” . 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 In paragraph 1J of that Schedule (rates of duty applicable to light goods vehicles first registered on or after 1st March 2001)— a in paragraph (a) (vehicle which is not a lower-emission van) for “£160” substitute “ £165 ” ; b in paragraph (b) (vehicle which is a lower-emission van) for “£105” substitute “ £110 ” . 4 This section applies to any licence taken out on or after 17th April 2003 for a period beginning on or after 1st May 2003. Disclosure for exemptions: Northern Ireland 15 In section 22ZA of the Vehicle Excise and Registration Act 1994 (c. 22) (nil licences for vehicles for disabled persons: disclosure of information) in subsection (1)(a) (which provides that the section applies to certain information held by the Secretary of State or a person providing services to him) in sub-paragraphs (i) and (ii), after “the Secretary of State” insert “ or a Northern Ireland department ” . Duty at higher rate: exception for tractive units 16 1 After section 15 of the Vehicle Excise and Registration Act 1994 insert— Exception for tractive units from charge at higher rate 15A 1 Where— a a vehicle licence has been taken out for a tractive unit, and b the licence was taken out at a rate of vehicle excise duty applicable to a tractive unit which is to be used with semi-trailers with a minimum number of axles, duty at a higher rate does not become chargeable under section 15 by reason only that while the licence is in force the tractive unit is used with a semi-trailer with fewer axles than that minimum number, if the condition in subsection (2) is satisfied. 2 The condition is that the rate of duty at which the licence was taken out is equal to or exceeds the rate which would have been applicable if the revenue weight of the tractive unit had been a weight equal to the actual laden weight, at the time of the use, of the articulated vehicle consisting of the tractive unit and the semi-trailer. . 2 Section 16 of that Act (which makes provision, in the case of tractive units, for exemptions from the charge to vehicle excise duty at a higher rate on a basis different from that set out in new section 15A) shall cease to have effect. 3 This section has effect in relation to the use of a tractive unit on or after 9th April 2003. Part 2 Value added tax Requirement of evidence or security 17 1 The Value Added Tax Act 1994 (c. 23) is amended as follows. 2 In section 24(6)(a) (regulations about input tax etc: requirement of documentary evidence) after “documents” insert “ or other information ” . 3 In paragraph 4 of Schedule 11 (power to require security and production of documents) for sub-paragraph (1) substitute— 1 The Commissioners may, as a condition of allowing or repaying input tax to any person, require the production of such evidence relating to VAT as they may specify. 1A If they think it necessary for the protection of the revenue, the Commissioners may require, as a condition of making any VAT credit, the giving of such security for the amount of the payment as appears to them appropriate. . 4 For sub-paragraph (2) of that paragraph substitute— 2 If they think it necessary for the protection of the revenue, the Commissioners may require a taxable person, as a condition of his supplying or being supplied with goods or services under a taxable supply, to give security, or further security, for the payment of any VAT that is or may become due from— a the taxable person, or b any person by or to whom relevant goods or services are supplied. 3 In sub-paragraph (2) above “ relevant goods or services ” means goods or services supplied by or to the taxable person. 4 Security under sub-paragraph (2) above shall be of such amount, and shall be given in such manner, as the Commissioners may determine. 5 The powers conferred on the Commissioners by sub-paragraph (2) above are without prejudice to their powers under section 48(7). . 5 In section 72(11) (penalty for supplying goods in contravention of paragraph 4(2) of Schedule 11) after “supplies” insert “ or is supplied with ” . 6 In section 83(l) (right of appeal against requirement of security under paragraph 4(2) of Schedule 11 etc) for “paragraph 4(2)” substitute “ paragraph 4(1A) or (2) ” . 7 In section 84 (further provisions relating to appeals) after subsection (4D) insert— 4E Where an appeal is brought against a requirement imposed under paragraph 4(2)(b) of Schedule 11 that a person give security, the tribunal shall allow the appeal unless the Commissioners satisfy the tribunal that— a there has been an evasion of, or an attempt to evade, VAT in relation to goods or services supplied to or by that person, or b it is likely, or without the requirement for security it is likely, that VAT in relation to such goods or services will be evaded. 4F A reference in subsection (4E) above to evading VAT includes a reference to obtaining a VAT credit that is not due or a VAT credit in excess of what is due. . 8 This section shall be deemed to have come into force on 10th April 2003. Joint and several liability for unpaid VAT of another trader 18 1 In Part 4 of the Value Added Tax Act 1994 (c. 23) (administration, collection and enforcement), after section 77 insert— Liability for unpaid VAT of another Joint and several liability of traders in supply chain where tax unpaid 77A 1 This section applies to goods of any of the following descriptions— a telephones and any other equipment, including parts and accessories, made or adapted for use in connection with telephones or telecommunication; b computers and any other equipment, including parts, accessories and software, made or adapted for use in connection with computers or computer systems. 2 Where— a a taxable supply of goods to which this section applies has been made to a taxable person, and b at the time of the supply the person knew or had reasonable grounds to suspect that some or all of the VAT payable in respect of that supply, or on any previous or subsequent supply of those goods, would go unpaid, the Commissioners may serve on him a notice specifying the amount of the VAT so payable that is unpaid, and stating the effect of the notice. 3 The effect of a notice under this section is that— a the person served with the notice, and b the person liable, apart from this section, for the amount specified in the notice, are jointly and severally liable to the Commissioners for that amount. 4 For the purposes of subsection (2) above the amount of VAT that is payable in respect of a supply is the lesser of— a the amount chargeable on the supply, and b the amount shown as due on the supplier’s return for the prescribed accounting period in question (if he has made one) together with any amount assessed as due from him for that period (subject to any appeal by him). 5 The reference in subsection (4)(b) above to assessing an amount as due from a person includes a reference to the case where, because it is impracticable to do so, the amount is not notified to him. 6 For the purposes of subsection (2) above, a person shall be presumed to have reasonable grounds for suspecting matters to be as mentioned in paragraph (b) of that subsection if the price payable by him for the goods in question— a was less than the lowest price that might reasonably be expected to be payable for them on the open market, or b was less than the price payable on any previous supply of those goods. 7 The presumption provided for by subsection (6) above is rebuttable on proof that the low price payable for the goods was due to circumstances unconnected with failure to pay VAT. 8 Subsection (6) above is without prejudice to any other way of establishing reasonable grounds for suspicion. 9 The Treasury may by order amend subsection (1) above; and any such order may make such incidental, supplemental, consequential or transitional provision as the Treasury think fit. 10 For the purposes of this section— a “ goods ” includes services; b an amount of VAT counts as unpaid only to the extent that it exceeds the amount of any refund due. . 2 In section 83 of that Act (appeals) after paragraph (r) insert— ra any liability arising by virtue of section 77A; . 3 In section 84(3) of that Act (appeals not to be entertained unless the VAT has been paid or deposited, except where that would cause hardship) for “or (q)” substitute “ , (q) or (ra) ” . 4 This section shall be deemed to have come into force on 10th April 2003 except subsection (3) which applies in relation to any appeal notice of which is given on or after the day on which this Act is passed. Face-value vouchers 19 Schedule 1 to this Act (VAT: face-value vouchers) has effect. Supplies arising from prior grant of fee simple 20 1 In section 96 of the Value Added Tax Act 1994 (c. 23) (interpretative provisions), after subsection (10A) (time for determining status of supplies arising from prior grant of interest etc) insert— 10B Notwithstanding subsection (10A) above— a item 1 of Group 1 of Schedule 9 does not make exempt any supply that arises for the purposes of this Act from the prior grant of a fee simple falling within paragraph (a) of that item; and b that paragraph does not prevent the exemption of a supply that arises for the purposes of this Act from the prior grant of a fee simple not falling within that paragraph. . 2 This section applies in relation to any supply that arises for the purposes of the Value Added Tax Act 1994 (c. 23) from the prior grant of a fee simple made on or after 9th April 2003. Business gifts 21 1 In Schedule 4 to the Value Added Tax Act 1994 (matters to be treated as supply of goods or services), paragraph 5 (business gifts etc) is amended as follows. 2 In sub-paragraph (2) (cases where sub-paragraph (1) does not apply), for paragraph (a) substitute— a a business gift the cost of which, together with the cost of any other business gifts made to the same person in the same year, was not more than £50. . 3 After that sub-paragraph insert— 2ZA In sub-paragraph (2) above— “ business gift ” means a gift of goods that is made in the course or furtherance of the business in question; “ cost ”, in relation to a gift of goods, means the cost to the donor of acquiring or, as the case may be, producing the goods; “ the same year ”, in relation to a gift, means any period of twelve months that includes the day on which the gift is made. . 4 This section applies in relation to gifts made on or after 1st October 2003. Non-business use of business property 22 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Supply of electronic services in member States: special accounting scheme 23 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Part 3 Taxes and duties on importation and exportation: penalties Preliminary Introductory 24 1 This Part makes provision for and in connection with the imposition of liability to a penalty where a person— a engages in any conduct for the purpose of evading any relevant tax or duty, or b engages in any conduct by which he contravenes a duty, obligation, requirement or condition imposed by or under legislation relating to any relevant tax or duty. 2 For the purposes of this Part “ relevant tax or duty ” means any of the following— a customs duty; b . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . c . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . d import VAT; e . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 In this Part— “ appeal tribunal ” means a the First-tier Tribunal or, where determined by or under Tribunal Procedure Rules, the Upper Tribunal ; “ the Commissioners ” means the Commissioners of Customs and Excise; . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . “ contravene ” includes fail to comply with; ... “ demand notice ” means a demand notice within the meaning of section 30; “ HMRC ” means “Her Majesty’s Revenue and Customs. “ import VAT ” means value added tax chargeable by virtue of section 1(1)(c) of the Value Added Tax Act 1994 (c. 23) (importation of goods into the United Kingdom ); “ notice ” means notice in writing; ... “ prescribed ” means specified in, or determined in accordance with, regulations made by the Treasury; “ relevant rule ”, in relation to any relevant tax or duty, has the meaning given by subsection (8) of section 26 (as read with subsection (9) of that section); “ representative ”, in relation to any person, means— his personal representative, his trustee in bankruptcy or interim or permanent trustee, any receiver or liquidator appointed in relation to that person or any of his property, or any other person acting in a representative capacity in relation to that person. “Union Customs Code” means Regulation ( EU ) No 952/2013 of the European Parliament and of the Council of 9 October 2013 laying down the Union Customs Code; “Union export duty” means export duty, as defined in Article 5(21) of the Union Customs Code; “Union import duty” means import duty, as defined in Article 5(20) of the Union Customs Code. 4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 Except for this subsection and section 41 (which accordingly come into force on the passing of this Act), this Part comes into force on such day as the Treasury may by order appoint. The penalties Penalty for evasion 25 1 In any case where— a a person engages in any conduct for the purpose of evading any relevant tax or duty, and b his conduct involves dishonesty (whether or not such as to give rise to any criminal liability), that person is liable to a penalty of an amount equal to the amount of the tax or duty evaded or, as the case may be, sought to be evaded. 2 Subsection (1) is subject to the following provisions of this Part. 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 Any reference in this section to a person’s “ evading ” any relevant tax or duty includes a reference to his obtaining or securing, without his being entitled to it,— a any repayment, rebate or drawback of any relevant tax or duty, b any relief or exemption from, or any allowance against, any relevant tax or duty, or c any deferral or other postponement of his liability to pay any relevant tax or duty or of the discharge by payment of any such liability, and also includes a reference to his evading the cancellation of any entitlement to, or the withdrawal of, any such repayment, rebate, drawback, relief, exemption or allowance. 5 In relation to any such evasion of any relevant tax or duty as is mentioned in subsection (4), the reference in subsection (1) to the amount of the tax or duty evaded or sought to be evaded is a reference to the amount of— a the repayment, rebate or drawback, b the relief, exemption or allowance, or c the payment which, or the liability to make which, is deferred or otherwise postponed, as the case may be. 6 Where, by reason of conduct falling within subsection (1) in the case of any relevant tax or duty, a person— a is convicted of an offence, b is given, and has not had withdrawn, a demand notice in respect of a penalty to which he is liable under section 26, or c is liable to a penalty imposed upon him under any other provision of the law relating to that relevant tax or duty, that conduct does not also give rise to liability to a penalty under this section in respect of that relevant tax or duty. Penalty for contravention of relevant rule 26 1 If, in the case of any relevant tax or duty, a person of a prescribed description engages in any conduct by which he contravenes— a a prescribed relevant rule, or b a relevant rule of a prescribed description, he is liable to a penalty under this section of a prescribed amount. 2 Subsection (1) is subject to the following provisions of this Part. 3 The power conferred by subsection (1) to prescribe a description of person includes power to prescribe any person (without further qualification) as such a description. 4 Different penalties may be prescribed under subsection (1) for different cases or different circumstances. 5 Any amount prescribed under subsection (1) as the amount of a penalty must not be more than £2,500. 5A Where the conduct constituting a contravention of a relevant rule is a contravention of a condition imposed under regulations under section 20(1A), 20B(2), 22(1A) or 25(1A) of the Customs and Excise Management Act 1979— a the Treasury may by regulations provide that, in prescribed circumstances, there are to be deemed for the purposes of subsection (1) of this section to be further separate contraventions of the rule, and b the provision that may be made by the regulations includes provision replicating or applying, with or without modifications, any provision made by section 20A(1A) or (1B), 22A(1A) or (1B) or 25A(1A) or (1B) of the Customs and Excise Management Act 1979. 6 The Treasury may by order amend subsection (5) by substituting a different amount for the amount for the time being specified in that subsection. 7 A statutory instrument containing an order under subsection (6) may not be made unless a draft of the instrument has been laid before, and approved by a resolution of, the House of Commons. 8 In this Part “ relevant rule ”, in relation to any relevant tax or duty, means any duty, obligation, requirement or condition imposed by or under any of the following— za Part 1 and sections 40A and 40B of the Taxation (Cross-border Trade) Act 2018, as they apply in relation to the relevant tax or duty; a the Customs and Excise Management Act 1979 (c. 2), as it applies in relation to the relevant tax or duty; b any other Act, or any statutory instrument, as it applies in relation to the relevant tax or duty; c . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . d . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . e . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . f any relevant international rules applying in relation to the relevant tax or duty. 9 In subsection (8)— ... “ relevant international rules ” means international agreements so far as applying in relation to a relevant tax or duty and having effect as part of the law of any part of the United Kingdom by virtue of— any Act or statutory instrument, ... ... Exceptions from section 26 27 1 A person is not liable to a penalty under section 26 if he satisfies— a the Commissioners, or b on appeal, an appeal tribunal, that there is a reasonable excuse for his conduct. 2 For the purposes of subsection (1) none of the following is a reasonable excuse— a an insufficiency of funds available to any person for paying any relevant tax or duty or any penalty due; b that reliance was placed by any person on another to perform any task; c that the contravention is attributable, in whole or in part, to the conduct of a person on whom reliance to perform any task was so placed. 3 Where, by reason of conduct falling within subsection (1) of section 26 in the case of any relevant tax or duty, a person— a is prosecuted for an offence, b is given, and has not had withdrawn, a demand notice in respect of a penalty to which he is liable under section 25, or c is liable to a penalty imposed upon him under any other provision of the law relating to that relevant tax or duty, that conduct does not also give rise to liability to a penalty under section 26 in respect of that relevant tax or duty. 4 A person is not liable to a penalty under section 26 in respect of any conduct, so far as relating to import VAT, if in respect of that conduct— a he is liable to a penalty under any of sections 62 to 69A of the Value Added Tax Act 1994 (c. 23) (penalty for contravention of statutory requirements as to VAT), or b he would be so liable but for section 62(4), 63(11), 64(6), 67(9), 69(9) or 69A(7) of that Act (conduct resulting in conviction, different penalty etc). Liability of directors etc where body corporate liable to penalty for evasion 28 1 Where it appears to the Commissioners— a that a body corporate is liable to a penalty under section 25, and b that the conduct giving rise to the penalty is, in whole or in part, attributable to the dishonesty of a person who is, or at the material time was, a director or managing officer of the body corporate (a “ relevant officer ”), the Commissioners may give a notice under this section to the body corporate (or its representative) and to the relevant officer (or his representative). 2 A notice under this section must state— a the amount of the penalty referred to in subsection (1)(a) (the “basic penalty”), and b that the Commissioners propose, in accordance with this section, to recover from the relevant officer such portion (which may be the whole) of the basic penalty as is specified in the notice. 3 If a notice is given under this section, this Part shall apply in relation to the relevant officer as if he were personally liable under section 25 to a penalty which corresponds to that portion of the basic penalty specified in the notice. 4 If a notice is given under this section— a the amount which may be recovered from the body corporate under this Part is limited to so much (if any) of the basic penalty as is not recoverable from the relevant officer by virtue of subsection (3), and b the body corporate is to be treated as discharged from liability for so much of the basic penalty as is so recoverable from the relevant officer. 5 In this section “ managing officer ”, in relation to a body corporate, means— a a manager, secretary or other similar officer of the body corporate, or b a person purporting to act in any such capacity or as a director. 6 Where the affairs of a body corporate are managed by its members, this section applies in relation to the conduct of a member in connection with his functions of management as if he were a director of the body corporate. Reduction of amount of penalty Reduction of penalty under section 25 or 26 29 1 Where a person is liable to a penalty under section 25 or 26— a the Commissioners (whether originally or on review) or, on appeal, an appeal tribunal may reduce the penalty to such amount (including nil) as they think proper; and b the Commissioners on a review, or an appeal tribunal on an appeal, relating to a penalty reduced by the Commissioners under this subsection may cancel the whole or any part of the reduction previously made by the Commissioners. 2 In exercising their powers under subsection (1), neither the Commissioners nor an appeal tribunal are entitled to take into account any of the matters specified in subsection (3). 3 Those matters are— a the insufficiency of the funds available to any person for paying any relevant tax or duty or the amount of the penalty, b the fact that there has, in the case in question or in that case taken with any other cases, been no or no significant loss of any relevant tax or duty, c the fact that the person liable to the penalty, or a person acting on his behalf, has acted in good faith. Demand notices Demands for penalties 30 1 Where a person is liable to a penalty under this Part, the Commissioners may give to that person or his representative a notice in writing (a “ demand notice ”) demanding payment of the amount due by way of penalty. 2 An amount demanded as due from a person or his representative in accordance with subsection (1) is recoverable as if it were an amount due from the person or, as the case may be, the representative as an amount of customs duty. This subsection is subject to— a any appeal under section 33 (appeals to tribunal); and b subsection (3). 3 An amount so demanded is not recoverable if or to the extent that— a the demand has subsequently been withdrawn; or b the amount has been reduced under section 29. Time limits for demands for penalties 31 1 A demand notice may not be given— a in the case of a penalty under section 25, more than 20 years after the conduct giving rise to the liability to the penalty ceased, or b in the case of a penalty under section 26, more than 3 years after the conduct giving rise to the liability to the penalty ceased. 2 A demand notice may not be given more than 2 years after there has come to the knowledge of the Commissioners evidence of facts sufficient in the opinion of the Commissioners to justify the giving of the demand notice. 3 A demand notice— a may be given in respect of a penalty to which a person was liable under section 25 or 26 immediately before his death, but b in the case of a penalty to which the deceased was so liable under section 25, may not be given more than 3 years after his death. No prosecution after demand notice for penalty under section 26 32 1 Where a demand notice is given demanding payment of an amount due by way of penalty under section 26 in respect of any conduct of a person, no proceedings may be brought against that person for any offence constituted by that conduct (whether or not the demand notice is subsequently withdrawn). 2 Nothing in subsection (1) prevents the bringing of proceedings against a person for an offence under section 20A(1A), 22A(1A) or 25A(1A) of the Customs and Excise Management Act 1979 in circumstances where it is alleged that the person is liable to a penalty of an enhanced amount. Appeals and reviews Right to appeal against certain decisions 33 1 If, in the case of any relevant tax or duty, HMRC give a person or his representative a notice informing him— a that they have decided that the person has engaged in conduct by which he contravenes a relevant rule, and b that the person is, in consequence, liable to a penalty under section 26, but c that they do not propose to give a demand notice in respect of the penalty, the person or his representative may make an appeal to an appeal tribunal in respect of the decision mentioned in paragraph (a). 2 Where HMRC give a demand notice to a person or his representative, the person or his representative may make an appeal to an appeal tribunal in respect of — a their decision that the person is liable to a penalty under section 25 or 26, or b their decision as to the amount of the liability. 3 Where HMRC give a notice under section 28 to a body corporate and to a relevant officer— a subsection (2) does not apply to any demand notice given in respect of the liability of either of them to a penalty under this Part in respect of the conduct in question, but b subsections (4) and (5) have effect instead in relation to any such demand notice. 4 Where HMRC give a demand notice to the relevant officer or his representative for a penalty which corresponds to the portion of the basic penalty specified in the notice under section 28, the relevant officer or his representative may make an appeal to an appeal tribunal in respect of — a their decision that the conduct of the body corporate referred to in section 28(1)(b) is, in whole or in part, attributable to the relevant officer’s dishonesty, or b their decision as to the portion of the basic penalty which the HMRC are seeking to recover from the relevant officer or his representative. 5 Where HMRC give a demand notice to the body corporate or its representative for so much of the basic penalty as is not recoverable from the relevant officer by virtue of section 28(3), the body corporate or its representative may make an appeal to an appeal tribunal in respect of — a their decision that the body corporate is liable to a penalty under section 25, or b their decision as to amount of the basic penalty as if it were the amount specified in the demand notice. 6 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. 7 On an appeal under this section— a the burden of proof as to the matters mentioned in section 25(1) or 26(1) lies on HMRC ; but b it is otherwise for the appellant to show that the grounds on which any such appeal is brought have been established. Offer of review 33A 1 HMRC must offer a person (P) a review of a decision that has been notified to P if an appeal lies under section 33 in respect of the decision. 2 The offer of the review must be made by notice given to P at the same time as the decision is notified to P. 3 This section does not apply to the notification of the conclusions of a review. Review by HMRC 33B 1 HMRC must review a decision if— a they have offered a review of the decision under section 33A, and b P notifies HMRC accepting the offer within 30 days from the date of the document containing the notification of the offer. 2 But P may not notify acceptance of the offer if P has already appealed to the appeal tribunal under section 33F. 3 HMRC shall not review a decision if P has appealed to the appeal tribunal under section 33F in respect of the decision. Extensions of time 33C 1 If under section 33A, HMRC have offered P a review of a decision, HMRC may within the relevant period notify P that the relevant period is extended. 2 If notice is given the relevant period is extended to the end of 30 days from— a the date of the notice, or b any other date set out in the notice or a further notice. 3 In this section “relevant period” means— a the period of 30 days referred to in section 33B(1)(b), or b if notice has been given under subsection (1) that period as extended (or as most recently extended) in accordance with subsection (2). Review out of time 33D 1 This section applies if— a HMRC have offered a review of a decision under section 33A, and b P does not accept the offer within the time allowed under section 33B(1)(b) or 33C(2). 2 HMRC must review the decision under section 33B if— a after the time allowed, P notifies HMRC in writing requesting a review out of time, b HMRC are satisfied that P had a reasonable excuse for not accepting the offer or requiring review within the time allowed, and c HMRC are satisfied that P made the request without unreasonable delay after the excuse had ceased to apply. 3 HMRC shall not review a decision if P has appealed to the appeal tribunal under section 33F in respect of the decision. Nature of review etc 33E 1 This section applies if HMRC are required to undertake a review under section 33B or 33D. 2 The nature and extent of the review are to be such as appear appropriate to HMRC in the circumstances. 3 For the purpose of subsection (2), HMRC must, in particular, have regard to steps taken before the beginning of the review— a by HMRC in reaching the decision, and b by any person in seeking to resolve disagreement about the decision. 4 The review must take account of any representations made by P at a stage which gives HMRC a reasonable opportunity to consider them. 5 The review may conclude that the decision is to be— a upheld, b varied, or c cancelled. 6 HMRC must give P notice of the conclusions of the review and their reasoning within— a a period of 45 days beginning with the relevant date, or b such other period as HMRC and P may agree. 7 In subsection (6) “relevant date” means— a the date HMRC received P’s notification accepting the offer of a review (in a case falling within section 33A), or b the date on which HMRC decided to undertake the review (in a case falling within section 33D). 8 Where HMRC are required to undertake a review but do not give notice of the conclusions within the period specified in subsection (6), the review is to be treated as having concluded that the decision is upheld. 9 If subsection (8) applies, HMRC must notify P of the conclusions which the review is treated as having reached. Bringing of appeals 33F 1 An appeal under section 33 is to be made to the appeal tribunal before— a the end of the period of 30 days beginning with the date of the document notifying the decision to which the appeal relates, or b if later, the end of the relevant period (within the meaning of section 33C). 2 But that is subject to subsections (3) to (5). 3 In a case where HMRC are required to undertake a review under section 33B — a an appeal may not be made until the conclusion date, and b any appeal is to be made within the period of 30 days beginning with the conclusion date. 4 In a case where HMRC are requested to undertake a review in accordance with section 33D— a an appeal may not be made to an appeal tribunal— i unless HMRC have notified P as to whether or not a review will be undertaken, and ii if HMRC have notified P that a review will be undertaken, until the conclusion date; b any appeal where paragraph (a)(ii) applies is to be made within the period of 30 days beginning with the conclusion date; c if HMRC have notified P that a review will not be undertaken, an appeal may be made only if the appeal tribunal gives permission to do so. 5 In a case where section 33E(8) applies, an appeal may be made at any time from the end of the period specified in section 33E(6) to the date 30 days after the conclusion date. 6 An appeal may be made after the end of the period specified in subsection (1), (3)(b), (4)(b) or (5) if an appeal tribunal gives permission to do so. 7 In this section “conclusion date” means the date of the document notifying the conclusions of the review. Time limit and right to further review 34 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Powers of Commissioners on a review 35 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Appeals to a tribunal 36 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Appeal tribunals 37 Section 85 of the Value Added Tax Act 1994 (settling appeals by agreement) has effect as if the reference to section 83 of that Act included a reference to section 33 above. Evidence Admissibility of certain statements and documents 38 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 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 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 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 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 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 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Miscellaneous and supplementary Service of notices 39 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 representative. Penalties not to be deducted for income tax or corporation tax purposes 40 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Regulations and orders 41 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 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. Part 4 Stamp duty land tax Introduction The tax 42 1 A tax (to be known as “ stamp duty land tax ”) shall be charged in accordance 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 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 ”). Land transactions Land transactions 43 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 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 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 right is benefitted or enlarged by the transaction, and ii a disposal by the person ceasing to be entitled to that interest; ... c the variation of a chargeable interest (other than a lease) is— i an acquisition of a chargeable interest (other than a lease) by the person benefitting from the variation, and ii a disposal of a chargeable interest (other than a lease) by the person whose interest is subject to or limited by the variation. d the variation of a lease is an acquisition and disposal of a chargeable interest only where i it takes effect, or is treated for the purposes of this Part, as the grant of a new lease , or ii paragraph 15A of Schedule 17A (reduction of rent or term) applies. 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-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. 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. Contract and conveyance 44 1 This section applies where a contract for a land transaction is entered into 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 as parts of a single land transaction. In this case the effective date of the transaction is the date of completion. 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— a the purchaser , or a person connected with 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 possession includes receipt of rents and profits or the right to receive them, and b it is immaterial whether possession is taken 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— 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 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 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 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. 9A Where— a paragraph 12A of Schedule 17A applies (agreement for lease), or b . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . it applies in place of subsections (4), (8) and (9). 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 instrument. 11 Section 1122 of the Corporation Tax Act 2010 (connected persons) has effect for the purposes of this section. Contract providing for conveyance to third party 44A 1 This section applies where a contract is entered into under which a chargeable interest is to be conveyed by one party to the contract (A) at the direction or request of the other (B)— a to a person (C) who is not a party to the contract, or b either to such a person or to B. 2 B 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 contract is substantially performed B is treated for the purposes of this Part as acquiring a chargeable interest, and accordingly as entering into a land transaction. The effective date of the transaction is when the contract is substantially performed. 4 Where the contract is (to any extent) afterwards rescinded or annulled, or is for any other reason not carried into effect, the tax paid by virtue of subsection (3) 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. 5 Subject to subsection (6), section 44 (contract and conveyance) does not apply (except so far as it defines “substantial performance”) in relation to the contract. 6 Where— a this section applies by virtue of subsection (1)(b), and b by reason of B’s direction or request, A becomes obliged to convey a chargeable interest to B, section 44 applies to that obligation as it applies to a contract for a land transaction that is to be completed by a conveyance. 7 Section 44 applies in relation to any contract between B and C, in respect of the chargeable interest referred to in subsection (1) above, that is to be completed by a conveyance. References to completion in that section, as it so applies, include references to conveyance by A to C of the subject matter of the contract between B and C. 8 In this section “ contract ” includes any agreement and “ conveyance ” includes any instrument. Transactions entered into before completion of contract 45 Schedule 2A contains— a provision about the application of section 44 (contract and conveyance) in certain cases where an assignment of rights, subsale or other transaction is entered into without the contract having been completed, and b other provision about such cases. Contract providing for conveyance to third party: effect of transfer of rights 45A 1 This section applies where— a a contract (“the original contract”) is entered into under which a chargeable interest is to be conveyed by one party to the contract (A) at the direction or request of the other (B)— i to a person (C) who is not a party to the contract, or ii either to such a person or to B, and b there is an assignment or other transaction (relating to the whole or part of the subject-matter of the original contract) as a result of which a person (D) becomes entitled to exercise any of B’s rights under the original contract in place of B. References in the following provisions of this section to a transfer of rights are to any such assignment or other transaction. 2 D is not regarded as entering into a land transaction by reason of the transfer of rights, but section 44A (contract providing for conveyance to third party) has effect in accordance with the following provisions of this section. 3 That section applies as if— a D had entered into a contract (a “secondary contract”) in the same terms as the original contract except with D as a party instead of B, and b the consideration due from D under the secondary contract were— 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 be given (directly or indirectly) by D or a person connected with him, and ii the consideration given for the transfer of rights. 4 The substantial performance of the original contract shall be disregarded if— a it occurs at the same time as, and in connection with, the substantial performance of the secondary contract, or b it occurs after the transfer of rights. 5 Where there are successive transfers of rights, subsection (3) has effect in relation to each of them. 6 The substantial performance of the secondary contract arising from an earlier transfer of rights shall be disregarded if— a it occurs at the same time as, and in connection with, the substantial performance of the secondary contract arising from a subsequent transfer of rights, or b it occurs after that subsequent transfer. 7 Where a transfer of rights relates to only part of the subject matter of the original contract, or to only some of the rights under that contract— a a reference in subsection (3)(a) or (4) to the original contract, or a reference in subsection (6) to the secondary contract arising from an earlier transfer, is to that contract so far as relating to that part or those rights, and b that contract so far as not relating to that part or those rights shall be treated as a separate contract. 8 The effective date of a land transaction treated as entered into by virtue of subsection (3) is not earlier than the date of the transfer of rights. 9 In relation to a such a transaction— a references in Schedule 7 (group relief) to the vendor shall be read as references to A; b other references in this Part to the vendor shall be read, where the context permits, as referring to either A or B. 10 Section 1122 of the Corporation Tax Act 2010 (connected persons) applies for the purposes of subsection (3)(b). 11 In this section “ contract ” includes any agreement. Options and rights of pre-emption 46 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 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 a land transaction includes an option requiring the grantor either to enter into 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). 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. Exchanges 47 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 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 (and they are not linked transactions within the meaning of section 108) . 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 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— paragraphs 5 and 6 of Schedule 4 (exchanges, partition etc), ... paragraph 17 of that Schedule (arrangements involving public or educational bodies), and ... Chargeable interests, chargeable transactions and chargeable consideration Chargeable interests 48 1 In this Part “ chargeable interest ” means— a an estate, interest, right or power in or over land in England ... or Northern Ireland , 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. 1A See section 48A regarding land which is partly in England and partly in Wales. 2 The following are exempt interests— a any security interest; b a licence to use or occupy land; c ...— i a tenancy at will; 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 b “ franchise ” means a grant from the Crown such as the right to hold a market or fair, or the right to take tolls. 3A Section 73B makes additional provision about exempt interests in relation to alternative finance arrangements. 4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 The Treasury may by regulations provide that any other description of interest or right in relation to land in England ... or Northern Ireland is an exempt interest. 6 The regulations may contain such supplementary, incidental and transitional provision as appears to the Treasury to be appropriate. 7 This section has effect subject to subsection (3) of section 44A (contract and conveyance to third party) and to paragraph 15A of Schedule 17A (reduction of rent or term of lease) . Interests, transactions and consideration where land in England and Wales 48A 1 This section sets out how this Part applies to a transaction which is the acquisition of— a an estate, interest, right or power in or over land, or b the benefit of an obligation, restriction or condition affecting the value of any such estate, interest, right or power, where the land is partly in England and partly in Wales. 2 The transaction is to be treated as if it were two transactions, one relating to the land in England (“the English transaction”) and the other relating to the land in Wales. 3 The consideration for the transaction is to be apportioned between those two transactions on a just and reasonable basis. 4 Accordingly, the English transaction is to be treated as a land transaction within the meaning of this Part (being the acquisition of a chargeable interest relating to the land in England). 5 But subsection (4) does not apply in the case of an exempt interest. 6 See section 9 of the Land Transaction Tax and Anti-avoidance of Devolved Taxes (Wales) Act 2017 (anaw 0) as to the application of that Act to the transaction relating to the land in Wales. Chargeable transactions 49 1 A land transaction is a chargeable transaction if it is not a transaction that is exempt from charge. 2 Schedule 3 provides for certain transactions to be exempt from charge. Other transactions are exempt from charge under other provisions of this Part. Chargeable consideration 50 1 Schedule 4 makes provision as to the chargeable consideration for a transaction. 2 The Treasury may by regulations amend or repeal the provisions of this Part relating to chargeable consideration and make such other provision as appears to them appropriate with respect to— a what is to count as chargeable consideration, or b the determination of the amount of chargeable consideration. 3 The regulations may make different provision in relation to different descriptions of transaction or consideration and different circumstances. Contingent, uncertain or unascertained consideration 51 1 Where the whole or part of the chargeable consideration for a transaction is contingent, the amount or value of the consideration shall be determined for the purposes of this Part on the assumption that the outcome of the contingency will be such that the consideration is payable or, as the case may be, does not cease to be payable. 2 Where the whole or part of the chargeable consideration for a transaction is uncertain or unascertained, its amount or value shall be determined for the purposes of this Part on the basis of a reasonable estimate. 3 In this Part— “ contingent ”, in relation to consideration, means— that it is to be paid or provided only if some uncertain future event occurs, or that it is to cease to be paid or provided if some uncertain future event occurs; and “ uncertain ”, in relation to consideration, means that its amount or value depends on uncertain future events. 4 This section has effect subject to— section 80 (adjustment where contingency ceases or consideration is ascertained), and section 90 (application to defer payment in case of contingent or uncertain consideration). 5 This section applies in relation to chargeable consideration consisting of rent only to the extent that it is applied by paragraph 7 of Schedule 17A. Annuities etc: chargeable consideration limited to twelve years' payments 52 1 This section applies to so much of the chargeable consideration for a land transaction as consists of an annuity payable— a for life, or b in perpetuity, or c for an indefinite period, or d for a definite period exceeding twelve years. 2 For the purposes of this Part the consideration to be taken into account is limited to twelve years' annual payments. 3 Where the amount payable varies, or may vary, from year to year, the twelve highest annual payments shall be taken. No account shall be taken for the purposes of this Schedule of any provision for adjustment of the amount payable in line with the retail price index. 4 References in this section to annual payments are to payments in respect of each successive period of twelve months beginning with the effective date of the transaction. 5 For the purposes of this section the amount or value of any payment shall be determined (if necessary) in accordance with section 51 (contingent, uncertain or unascertained consideration). 6 References in this section to an annuity include any consideration (other than rent) that falls to be paid or provided periodically. References to payment shall be read accordingly. 7 Where this section applies— a section 80 (adjustment where contingency ceases or consideration is ascertained) does not apply, and b no application may be made under section 90 (application to defer payment in case of contingent or uncertain consideration). Deemed market value where transaction involves connected company 53 1 This section applies where the purchaser is a company and— a the vendor is connected with the purchaser, or b some or all of the consideration for the transaction consists of the issue or transfer of shares in a company with which the vendor is connected. 1A The chargeable consideration for the transaction shall be taken to be not less than— a the market value of the subject-matter of the transaction as at the effective date of the transaction, and b if the acquisition is the grant of a lease at a rent, that rent. 2 Section 1122 of the Corporation Tax Act 2010 (connected persons) has effect for the purposes of this section. 3 In this section— “ company ” means any body corporate; “ shares ” includes stock and the reference to shares in a company includes a reference to securities issued by a company. 4 Where this section applies paragraph 1 of Schedule 3 (exemption of transactions for which there is no chargeable consideration) does not apply. But this section has effect subject to any other provision affording exemption or relief from stamp duty land tax. 5 This section is subject to the exceptions provided for in section 54. Exceptions from deemed market value rule 54 1 Section 53 (chargeable consideration: transaction with connected company) does not apply in the following cases. In the following provisions “ the company ” means the company that is the purchaser in relation to the transaction in question. 2 Case 1 is where immediately after the transaction the company holds the property as trustee in the course of a business carried on by it that consists of or includes the management of trusts. 3 Case 2 is where— a immediately after the transaction the company holds the property as trustee, and b the vendor is connected with the company only because of section 1122(6) of the Corporation Tax Act 2010 . 4 Case 3 is where— a the vendor is a company and the transaction is, or is part of, a distribution of the assets of that company (whether or not in connection with its winding up), and b it is not the case that— i the subject-matter of the transaction, or ii an interest from which that interest is derived, has, within the period of three years immediately preceding the effective date of the transaction, been the subject of a transaction in respect of which group relief was claimed by the vendor. Amount of tax chargeable Amount of tax chargeable: general 55 1 The amount of tax chargeable in respect of a chargeable transaction to which this section applies is determined in accordance with subsections (1B) and (1C) . 1A This section applies to any chargeable transaction other than a transaction to which paragraph 3 of Schedule 4A or step 4 of section 74(1A) (higher rate for certain transactions) applies. 1B If ... the transaction is not one of a number of linked transactions, the amount of tax chargeable is determined as follows— Step 1 Apply the rates specified in the second column of the appropriate table below to the parts of the relevant consideration specified in the first column of the appropriate table . “The “appropriate table” is— (a) Table A, if the relevant land consists entirely of residential property, and (b) Table B, if the relevant land consists of or includes land that is not residential property. Step 2 Add together the amounts calculated at Step 1 (if there are two or more such amounts). TABLE A: RESIDENTIAL Part of relevant consideration Rate So much as does not exceed £125,000 0% So much as exceeds £125,000 but does not exceed £250,000 2% So much as exceeds £250,000 but does not exceed £925,000 5% So much as exceeds £925,000 but does not exceed £1,500,000 10% The remainder (if any) 12% Table B: Non-residential or mixed Relevant consideration Percentage So much as does not exceed £150,000 0% So much as exceeds £150,000 but does not exceed £250,000 2% The remainder (if any) 5% 1C If ... the transaction is one of a number of linked transactions, the amount of tax chargeable in respect of the particular transaction under consideration is determined as follows— Step 1 Apply the rates specified in the second column of the appropriate table in subsection (1B) to the parts of the relevant consideration specified in the first column of the appropriate table . “The “appropriate table” is— (a) Table A, if the relevant land consists entirely of residential property, and (b) Table B, if the relevant land consists of or includes land that is not residential property. Step 2 Add together the amounts calculated at Step 1 (if there are two or more such amounts). Step 3 Multiply the amount given by Step 1 or Step 2, as the case may be, by— C R where— C is the chargeable consideration for the transaction, and R is the relevant consideration. 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 For the purposes of subsection (1B) — a the relevant land is the land an interest in which is the main subject-matter of the transaction, and b the relevant consideration is the chargeable consideration for the transaction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 For the purposes of subsection (1C) — a the relevant land is any land an interest in which is the main subject-matter of any of the linked transactions, and b the relevant consideration is the total of the chargeable consideration for all those transactions. 4A Schedule 4ZA (higher rates for additional dwellings and dwellings purchased by companies) modifies this section as it applies for the purpose of determining the amount of tax chargeable in respect of certain transactions involving major interests in dwellings. 5 This section has effect subject to— section 74(1B) ( exercise of collective rights by tenants of flats ), ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (which provides for the amount of tax to be determined by reference to a fraction of the relevant consideration). 6 In the case of a transaction for which the whole or part of the chargeable consideration is rent this section has effect subject to section 56 and Schedule 5 (amount of tax chargeable: rent). 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Amount of tax chargeable: higher rate for certain transactions 55A Schedule 4A provides for the calculation of the tax chargeable in respect of certain transactions involving higher threshold interests in dwellings. Amount of tax chargeable: rent 56 Schedule 5 provides for the calculation of the tax chargeable where the chargeable consideration for a transaction consists of or includes rent. Reliefs Disadvantaged areas relief 57 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Sale and leaseback arrangements 57A 1 The leaseback element of a sale and leaseback arrangement is exempt from charge if the qualifying conditions specified below are met. 2 A “ sale and leaseback ”arrangement means an arrangement under which— a A transfers or grants to B a major interest in land (the “sale”), and b out of that interest B grants a lease to A (the “leaseback”). 3 The qualifying conditions are— a that the sale transaction is entered into wholly or partly in consideration of the leaseback transaction being entered into, aa that the sale transaction is entered into wholly or partly in consideration of the leaseback transaction being entered into, b that the only other consideration (if any) for the sale is the payment of money or the assumption, satisfaction or release of a debt (or both), c that the sale is not a transfer of rights within the meaning of ... 45A (contract providing for conveyance to third party: effect of transfer of rights) or a pre-completion transaction within the meaning of Schedule 2A (transactions entered into before completion of contract) , and d where A and B are both bodies corporate at the effective date of the leaseback transaction, that they are not members of the same group for the purposes of group relief (see paragraph 1 of Schedule 7) at that date. e where A and B are both bodies corporate at the effective date of the leaseback transaction, that they are not members of the same group for the purposes of group relief (see paragraph 1 of Schedule 7) at that date. 4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . First-time buyers 57AA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . First-time buyers 57B 1 Schedule 6ZA provides relief for first-time buyers. 2 Any relief under that Schedule must be claimed in a land transaction return or an amendment of such a return. Relief for certain acquisitions of residential property 58A Schedule 6A provides for relief in the case of certain acquisitions of residential property. Relief for new zero-carbon homes 58B 1 The Treasury may make regulations granting relief on the first acquisition of a dwelling which is a “zero-carbon home”. 2 For the purposes of this section— a a building, or a part of a building, is a dwelling if it is constructed for use as a single dwelling, and b “ first acquisition ”, in relation to a dwelling, means its acquisition when it has not previously been occupied. 3 For the purpose of subsection (2) land occupied or enjoyed with a dwelling as a garden or grounds is part of the dwelling. 4 The regulations shall define “zero-carbon home” by reference to specified aspects of the energy efficiency of a building; for which purpose “ energy efficiency ” includes— a consumption of energy, b conservation of energy, and c generation of energy. 5 The relief may take the form of— a exemption from charge, or b a reduction in the amount of tax chargeable. 6 Regulations under this section shall not have effect in relation to acquisitions on or after 1st October 2012. 7 The Treasury may by order— a substitute a later date for the date in subsection (6); b make transitional provision, or provide savings, in connection with the effect of subsection (6). Relief for new zero-carbon homes: supplemental 58C 1 Regulations under section 58B— a shall include provision about the method of claiming relief (including documents or information to be provided), and b in particular, shall include provision about the evidence to be adduced to show that a dwelling satisfies the definition of “zero-carbon home”. 2 Regulations made by virtue of subsection (1)(b) may, in particular— a refer to a scheme or process established by or for the purposes of an enactment about building; b establish or provide for the establishment of a scheme or process of certification; c specify, or provide for the approval of, one or more schemes or processes for certifying energy efficiency. d provide for the charging of fees of a reasonable amount in respect of services provided as part of a scheme or process of certification. 3 In defining “zero-carbon home” regulations under section 58B may include requirements which may be satisfied in relation to a dwelling either— a by features of the building which, or part of which, constitutes the dwelling , or b by other installations or utilities. 4 Regulations under section 58B may modify the effect of section 108, or another provision of this Part about linked transactions, in relation to a set of transactions of which at least one is the first acquisition of a dwelling which is a zero-carbon home. 5 In determining whether section 116(7) applies, and in the application of section 116(7), a transaction shall be disregarded if or in so far as it involves the first acquisition of a dwelling which is a zero-carbon home. 6 Regulations under section 58B— a may provide for relief to be wholly or partly withdrawn if a dwelling ceases to be a zero-carbon home, and b may provide for the reduction or withholding of relief where a person acquires more than one zero-carbon home within a specified period. 7 Regulations under section 58B may include provision for relief to be granted in respect of acquisitions occurring during a specified period before the regulations come into force. Transfers involving multiple dwellings 58D 1 Schedule 6B provides for relief in the case of transfers involving multiple dwellings. 2 Any relief under that Schedule must be claimed in a land transaction return or an amendment of such a return. Compulsory purchase facilitating development 60 1 A compulsory purchase facilitating development is exempt from charge. 2 In this section “ compulsory purchase facilitating development ” means— a in relation to England ... ..., the acquisition by a person of a chargeable interest in respect of which that person has made a compulsory purchase order for the purpose of facilitating development by another person; b in relation to Northern Ireland, the acquisition by a person of a chargeable interest by means of a vesting order made for the purpose of facilitating development by a person other than the person who acquires the interest. 3 For the purposes of subsection (2)(a) it does not matter how the acquisition is effected (so that provision applies where the acquisition is effected by agreement). 4 In subsection (2)(b) a “ vesting order ” means an order made under any statutory provision to authorise the acquisition of land otherwise than by agreement. 5 In this section “ development ”— a in relation to England ..., has the same meaning as in the Town and Country Planning Act 1990 (c. 8) (see section 55 of that Act); b . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . c in relation to Northern Ireland, has the same meaning as in the Planning Act (Northern Ireland) 2011 (see section 23 of that Act). Compliance with planning obligations 61 1 A land transaction that is entered into in order to comply with a planning obligation or a modification of a planning obligation is exempt from charge if— a the planning obligation or modification is enforceable against the vendor, b the purchaser is a public authority, and c the transaction takes place within the period of five years beginning with the date on which the planning obligation was entered into or modified. 2 In this section— a in relation to England and Wales— “ planning obligation ” means either of the following— a planning obligation within the meaning of section 106 of the Town and Country Planning Act 1990 that is entered into in accordance with subsection (9) of that section, or a planning obligation within the meaning of section 299A of that Act that is entered into in accordance with subsection (2) of that section; and “ modification ” of a planning obligation means modification as mentioned in section 106A(1) of that Act; b . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . c in relation to Northern Ireland— “ planning obligation ” means a planning agreement within the meaning of section 76 of the Planning Act (Northern Ireland) 2011 that is entered into in accordance with subsection (10) of that section, and “ modification of a planning obligation ” means modification as mentioned in section 77(1) of that Act. 3 The following are public authorities for the purposes of subsection (1)(b)— Government A Minister of the Crown or government department . . . A Northern Ireland department The Welsh Ministers, the First Minister for Wales and the Counsel General to the Welsh Government Local government: England A county or district council constituted under section 2 of the Local Government Act 1972 (c. 70) The council of a London borough The Common Council of the City of London The Greater London Authority Transport for London 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: Northern Ireland A district council within the meaning of the Local Government Act (Northern Ireland) 1972 (c. 9 (N.I.)) Health: England and Wales A Strategic Health Authority established under section 13 of the National Health Service Act 2006 A Special Health Authority established under section 28 of that Act or section 22 of the National Health Service (Wales) Act 2006 A Primary Care Trust established under section 18 of the National Health Service Act 2006 A Local Health Board established under section 11 of the National Health Service (Wales) Act 2006 A National Health Service Trust established under section 25 of the National Health Service Act 2006 or section 18 of the National Health Service (Wales) Act 2006 . . . Health: Northern Ireland The Regional Agency for Public Health and Social Well-being A Health and Social Care trust established under Article 10 of the Health and Personal Social Services (Northern Ireland) Order 1991 ( S.I. 1991/194 (N.I. 1)) Other planning authorities Any other authority that— is a local planning authority within the meaning of the Town and Country Planning Act 1990 (c. 8), ... ... Prescribed persons A person prescribed for the purposes of this section by Treasury order Relief for special tax sites 61A 1 Schedule 6C provides for relief in the case of transactions relating to land in a special tax site . 2 In that Schedule— a Part 1 contains definitions, b Part 2 makes provision about the relief, c Part 3 makes provision about the withdrawal of the relief, d Part 4 makes provision about cases involving alternative finance arrangements, and e Part 5 confers power to change the cases in which the relief is available. 3 Relief under that Schedule is available only in relation to a land transaction with an effective date falling on or before the applicable sunset date in relation to the special tax site concerned (as to which see section 332 (4) and (5) of the Finance (No.2) Act 2023) . 4 Any relief under that Schedule must be claimed in a land transaction return or an amendment of such a return. 5 A claim for relief under that Schedule must— a be made on or before the period of one year and 14 days beginning with the end of the applicable sunset date in relation to the special tax site in which the transaction land is situated , and b include, or be accompanied by, such information as HMRC may require. 6 In this section and Schedule 6C, “ special tax site ” means an area for the time being designated under section 113 of the Finance Act 2021 . Group relief and reconstruction or acquisition relief 62 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. 3 Any relief under that Schedule must be claimed in a land transaction return or an amendment of such a return. Demutualisation of insurance company 63 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 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 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 the Solvency 2 Directive, and the requirements of subsection (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-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 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 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 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 cases. 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— “ 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 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 4A of the Financial Services and Markets Act 2000 (c. 8) ... 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 the Financial Services and Markets Act 2000; . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . “ mutual insurance company ” means an insurance company carrying on business without having any share capital; . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . “ pensioner ”, in relation to a mutual insurance company or its wholly-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. “ the Solvency 2 Directive ” means Directive 2009/138/EC of the European Parliament and of the Council of 25 November 2009 on the taking-up and pursuit of the business of Insurance and Reinsurance (Solvency II). Demutualisation of building society 64 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. Initial transfer of assets to trustees of unit trust scheme 64A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Incorporation of limited liability partnership 65 1 A transaction by which a chargeable interest is transferred by a person (“ the 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— 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 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 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. 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 partnership formed under the Limited Liability Partnerships Act 2000 (c. 12) or the Limited Liability Partnerships Act (Northern Ireland) 2002 (c. 12 (N. I.)). Seeding relief 65A 1 Schedule 7A provides for relief from stamp duty land tax. 2 In that Schedule— a Part 1 makes provision for relief for property authorised investment funds (PAIF seeding relief), and b Part 2 makes provision for relief for co-ownership authorised contractual schemes and Reserved Investor Funds (Contractual Schemes) (co-ownership scheme seeding relief) . 3 Any relief under that Schedule must be claimed in a land transaction return or an amendment of such a return, and must be accompanied by a notice to HMRC referring to the claim. 4 In the case of a claim for PAIF seeding relief, the notice must confirm that the purchaser is— a a property AIF as defined in paragraph 2(2) of Schedule 7A, or b a company treated as a property AIF by virtue of paragraph 2(5) of Schedule 7A (equivalent EEA funds). 5 In the case of a claim for co-ownership scheme seeding relief, the notice must confirm that the purchaser is— a a co-ownership authorised contractual scheme or a Reserved Investor Fund (Contractual Scheme) as defined in section 102A(8), or b an entity treated as a co-ownership authorised contractual scheme by virtue of section 102A(7) (equivalent EEA schemes). 6 The notice must be in such form, and contain such further information, as HMRC may require. 7 Co-ownership scheme seeding relief may not be claimed where the purchaser is a Reserved Investor Fund (Contractual Scheme) if the scheme— a has previously claimed such relief, and b following that claim ceased, at any time, to be a Reserved Investor Fund (Contractual Scheme). Transfers involving public bodies 66 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 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 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, 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 A Minister of the Crown The Scottish Ministers A Northern Ireland department The Welsh Ministers, the First Minister for Wales and the Counsel General to the Welsh Government The Corporate Officer of the House of Lords The Corporate Officer of the House of Commons The Scottish Parliamentary Corporate Body The Northern Ireland Assembly Commission The National Assembly for Wales Commission Local government: England 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 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 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.)) Health: England and Wales A Strategic Health Authority established under section 13 of the National Health Service Act 2006 A Special Health Authority established under section 28 of that Act or section 22 of the National Health Service (Wales) Act 2006 A Primary Care Trust established under section 18 of the National Health Service Act 2006 A Local Health Board established under section 11 of the National Health Service (Wales) Act 2006 A National Health Service Trust established under section 25 of the National Health Service Act 2006 or section 18 of the National Health Service (Wales) Act 2006 Health: Scotland The Common Services Agency established under section 10(1) of the National 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 The Regional Agency for Public Health and Social Well-being A Health and Social Care trust established under Article 10 of the Health and Personal Social Services (Northern Ireland) Order 1991 (S.I. 1991/194 (N.I. 1)) Other planning authorities Any other authority that— is a local planning authority within the meaning of the Town and Country Planning Act 1990 (c. 8), or 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 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 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. 6 In this section “ company ” means a company as defined by section 1 of the Companies Act 2006 .... Resolution of financial institutions 66A 1 A land transaction is exempt from charge if it is effected by— a an instrument listed in subsection (2), or b an instrument made under an instrument listed in subsection (2). 2 The instruments are— a a property transfer instrument made in accordance with section 12(2) of the Banking Act 2009 (transfer to a bridge bank), b a property transfer instrument made in accordance with section 12ZA(3) of that Act (transfer to asset management vehicle), c a supplemental property transfer instrument made in accordance with section 42(2) of that Act where the original instrument was made in accordance with section 12(2), 12ZA(3) or 41A(2) of that Act, d a property transfer instrument made in accordance with section 41A(2) of that Act (transfer of property subsequent to resolution instrument), e a bridge bank supplemental property transfer instrument made in accordance with section 44D(2) of that Act, f a property transfer order made in accordance with section 45(2) of that Act (temporary public ownership: property transfer), ... g a third-country instrument made in accordance with section 89H(2) or 89I(4) of that Act. h a property transfer instrument made in accordance with paragraph 29(3) (bridge central counterparty) of Schedule 11 to the Financial Services and Markets Act 2023 (central counterparties), i a property transfer instrument made in accordance with paragraph 66(2) of that Schedule (transfer of property subsequent to resolution instrument), j a supplemental property transfer instrument made in accordance with paragraph 67(2) of that Schedule (supplemental instruments) where the original instrument was made in accordance with paragraph 29(3) of that Schedule, k a property transfer instrument made in accordance with paragraph 71(2) (transfer of ownership and private sector purchaser: property transfer) where the original instrument was made in accordance with paragraph 30(2) of that Schedule (transfer of ownership), or l a third-country instrument made in accordance with paragraph 145(2) (third-country resolution actions) or 146(4) (effects of recognition on third-country resolution action) of that Schedule. 3 References in subsection (2) to a provision of the Banking Act 2009 include references to that provision as applied by or under any other provision of that Act (including where it is applied with modifications or in a substituted form). Transfer in consequence of reorganisation of parliamentary constituencies 67 1 Where— 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— 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, 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; 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 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 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— 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 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 association if any part of the existing association’s area is comprised in the new association’s area. Acquisitions by certain health service bodies 67A 1 A land transaction is exempt from charge if the purchaser is any of the following— a NHS England ; b an integrated care board established under section 14Z25 of the National Health Service Act 2006; ba an NHS trust established under section 25 of the National Health Service Act 2006; c an NHS foundation trust; d a Local Health Board established under section 11 of the National Health Service (Wales) Act 2006; e a National Health Service trust established under section 18 of that Act; f a Health and Social Services trust established under the Health and Personal Social Services (Northern Ireland) Order 1991. 2 Any relief under this section must be claimed in a land transaction return or an amendment of such a return. Charities relief 68 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. Acquisition by bodies established for national purposes 69 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 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . c the Trustees of the British Museum; d the Trustees of the National Heritage Memorial Fund; e the Trustees of the Natural History Museum. Right to buy transactions, shared ownership leases etc 70 Schedule 9 makes provision for relief in the case of right to buy transactions, shared ownership leases and certain related transactions. Certain acquisitions by registered providers of social housing etc 71 A1 A land transaction under which the purchaser is a profit-making registered provider of social housing is exempt from charge if the transaction is funded with the assistance of a public subsidy. 1 A land transaction under which the purchaser is a relevant housing provider is exempt from charge if— a the purchaser is a non-profit registered provider of social housing controlled by its tenants, b the vendor is a qualifying body, or c the transaction is funded with the assistance of a public subsidy. 1A In this section “ relevant housing provider ” means— a a non-profit registered provider of social housing, ... b a housing association registered in the register maintained under Article 14 of the Housing (Northern Ireland) Order 1992 ( S.I. 1992/1725 (N.I. 15)) , or c an English local authority that is a registered provider of social housing. 2 The reference in subsection (1)(a) to a non-profit registered provider of social housing “ controlled by its tenants ” is to a non-profit registered provider of social housing the majority of whose board members are tenants occupying properties owned or managed by it. “ Board member ”, in relation to a non-profit registered provider of social housing , means— if it is a company, a director of the company, if it is a body corporate whose affairs are managed by its members, a member, if it is body of trustees, a trustee, 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 non-profit registered provider of social housing . 3 In subsection (1)(b) “ qualifying body ” means— a a relevant housing provider , b . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . c a principal council within the meaning of the Local Government Act 1972 (c. 70), d the Common Council of the City of London, e . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . f . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . g . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . h the Department for Communities in Northern Ireland, or i the Northern Ireland Housing Executive. 4 In this section “ public subsidy ” means any grant or other financial assistance— 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 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . c under section 126 of the Housing Grants, Construction and Regeneration Act 1996 (c. 53) (financial assistance for regeneration and development), ca under section 19 of the Housing and Regeneration Act 2008 (financial assistance by the Homes and Communities Agency), cb made or given by the Greater London Authority, d . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . or e under Article 33 or 33A of the Housing (Northern Ireland) Order 1992 ( S.I. 1992/1725 (N.I. 15)). 5 In this section “public subsidy” also means — a any amount that is receipts of the disposal of social housing, provided the purchaser is entitled to use the amount for the purpose of the provision of social housing, or b any grant under section 31 of the Local Government Act 2003 (grants towards expenditure incurred or to be incurred by local authorities) towards expenditure incurred or to be incurred on the provision of social housing .... 6 In subsection (5) “ social housing ” has the meaning it has in Part 2 of the Housing and Regeneration Act 2008 (see, in particular, section 68 of that Act). 7 In this section “ English local authority ” means— a a principal council within the meaning of the Local Government Act 1972, or b the Common Council of the City of London. Alternative property finance: land sold to financial institution and leased to person 71A 1 This section applies where arrangements are entered into between a person and a financial institution under which— a the institution purchases a major interest in land or an undivided share of a major interest in land (“ the first transaction ”), b where the interest purchased is an undivided share, the major interest is held on trust for the institution and the person as beneficial tenants in common, c the institution (or the person holding the land on trust as mentioned in paragraph (b)) grants to the person out of the major interest a lease (if the major interest is freehold) or a sub-lease (if the major interest is leasehold) (“ the second transaction ”), and d the institution and the person enter into an agreement under which the person has a right to require the institution or its successor in title to transfer to the person (in one transaction or a series of transactions) the whole interest purchased by the institution under the first transaction. 2 The first transaction is exempt from charge if the vendor is— a the person , or b another financial institution by whom the interest was acquired under arrangements of the kind mentioned in subsection (1) entered into between it and the person . 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). 4 Any transfer to the person that results from the exercise of the right mentioned in subsection (1)(d) (“ a further transaction ”) is exempt from charge if— a the provisions of this Part relating to the first and second transactions are complied with, and b at all times between the second transaction and the further transaction— i the interest purchased under the first transaction is held by a financial institution so far as not transferred by a previous further transaction, and ii the lease or sub-lease granted under the second transaction is held by the person . 5 The agreement mentioned in subsection (1)(d) is not to be treated— a as substantially performed unless and until the whole interest purchased by the institution under the first transaction has been transferred (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— a the person enters into the arrangement, or holds the lease or sub-lease, as trustee and any beneficiary of the trust is not a person , or b the person enters into the arrangements, or holds the lease or sub-lease, as partner and any of the other partners is not a person . 7 A further transaction that is exempt from charge by virtue of subsection (4) is not a notifiable transaction unless the transaction involves the transfer to the person of the whole interest purchased by the institution under the first transaction, so far as not transferred by a previous further transaction. 8 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 References in this section to a person shall be read, in relation to times after the death of the person concerned, as references to his personal representatives. 10 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Alternative property finance in Scotland: land sold to financial institution and leased to person 72 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Alternative property finance in Scotland: land sold to financial institution and person in common 72A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Alternative property finance: land sold to financial institution and re-sold to person 73 1 This section applies where arrangements are entered into between a person and a financial institution under which— a the institution— i purchases a major interest in land (“ the first transaction ”), and ii sells that interest to the person (“ the second transaction ”), and b the person grants the institution a legal mortgage over that interest. 2 The first transaction is exempt from charge if the vendor is— a the person concerned, or b another financial institution by whom the interest was acquired under other arrangements of the kind mentioned in section 71A(1) ... entered into between it and the person . 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 on a chargeable consideration that is not less than the market value of the interest and, in the case of the grant of a lease at a rent, the rent. ). 4 This section does not apply if— a the person enters into the arrangements as trustee and any beneficiary of the trust is not a person , or b the person enters into the arrangements as partner and any of the other partners is not a person . 5 In this section— a . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . b “ legal mortgage ”— i in relation to land in England ..., means a legal mortgage as defined in section 205(1)(xvi) of the Law of Property Act 1925 (c. 20); ii . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 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 a person shall be read, in relation to times after the death of the person concerned, as references to his personal representatives. Sections 71A to 73: relationship with Schedule 7 73A Sections 71A to 73 do not apply to arrangements in which the first transaction is exempt from charge by virtue of Schedule 7. Section 71A : arrangements to transfer control of financial institution 73AB 1 Section 71A ... does not apply to alternative finance arrangements if those arrangements, or any connected arrangements, include arrangements for a person to acquire control of the relevant financial institution. 2 That includes arrangements for a person to acquire control of the relevant financial institution only if one or more conditions are met (such as the happening of an event or doing of an act). 3 In this section— “ alternative finance arrangements ” means the arrangements referred to in section 71A(1) ...; “ arrangements ” includes any agreement, understanding, scheme, transaction or series of transactions (whether or not legally enforceable); “ connected arrangements ” means any arrangements entered into in connection with the making of the alternative finance arrangements (including arrangements involving one or more persons who are not parties to the alternative finance arrangements); “ relevant financial institution ” means the financial institution which enters into the alternative finance arrangements. 4 Section 1124 of the Corporation Tax Act 2010 applies for the purposes of determining who has control of the relevant financial institution. Exempt interests 73B 1 An interest held by a financial institution as a result of the first transaction within the meaning of section 71A(1)(a) ... is an exempt interest for the purposes of stamp duty land tax. 2 That interest ceases to be an exempt interest if— a the lease or agreement mentioned in section 71A(1)(c) ... ceases to have effect, or b the right under section 71A(1)(d) ... ceases to have effect or becomes subject to a restriction. 3 Subsection (1) does not apply if the first transaction is exempt from charge by virtue of Schedule 7. 4 Subsection (1) does not make an interest exempt in respect of— a the first transaction itself, or b a further transaction or third transaction within the meaning of section 71A(4) .... Meaning of “financial institution” 73BA 1 In sections 71A to 73B “ financial institution ” has the meaning given by section 564B of the Income Tax Act 2007. 2 For this purpose section 564B(1) applies as if paragraph (d) were omitted. 3 In sections 71A, 73AB and 73B, “financial institution” also includes a person with permission under Part 4A of the Financial Services and Markets Act 2000 to carry on the regulated activity specified in Article 63F(1) of the Financial Services and Markets Act (Regulated Activities) Order 2001 ( S.I. 2001/544) (entering into regulated home purchase plans as home purchase provider). Alternative finance investment bonds 73C Schedule 61 to the Finance Act 2009 makes provision for relief from charge in the case of arrangements to which section 564G of the Income Tax Act 2007 or section 151N of the Taxation of Chargeable Gains Act 1992 (investment bond arrangements) applies . Sections 71A to 73: first-time buyers 73CA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Exercise of collective rights by tenants of flats 74 1 This section applies where a chargeable transaction is entered into by a person or persons nominated or appointed by qualifying tenants of flats contained in premises in exercise of— a a right under Part 1 of the Landlord and Tenant Act 1987 (right of first refusal), or b a right under Chapter 1 of Part 1 of the Leasehold Reform, Housing and Urban Development Act 1993 (right to collective enfranchisement). 1A The amount of tax is determined as follows. Step 1 Determine the fraction of the relevant consideration produced by dividing the total amount of that consideration by the number of qualifying flats contained in the premises. Step 2 If the amount produced by step 1 is £500,000 or less, determine the amount of tax chargeable in accordance with subsection (1B) . Step 3 If the amount produced by step 1 is more than £500,000 and the condition in paragraph 3(3) of Schedule 4A is not met with respect to the transaction, determine the amount of tax chargeable in accordance with subsection (1B) . Step 4 If the amount produced by step 1 is more than £500,000 and the condition in paragraph 3(3) of Schedule 4A is met with respect to the transaction, subsection (1B) does not apply, and the amount of tax chargeable in respect of the transaction is 17% of the chargeable consideration for the transaction. 1B Where step 2 or 3 of subsection (1A) requires the amount of tax chargeable to be determined in accordance with this subsection, it is determined as follows. Step 1 Determine the amount of tax chargeable under section 55 as if the relevant consideration for the chargeable transaction were the fraction of the relevant consideration calculated under step 1 of subsection (1A). Step 2 Multiply the amount determined at step 1 by the number of qualifying flats contained in the premises. 4 In this section— “ flat ” and “ qualifying tenant ” have the same meaning as in the Chapter or Part of the Act conferring the right being exercised; “ qualifying flat ” means a flat that is held by a qualifying tenant who is participating in the exercise of the right. 5 References in this section to the relevant consideration have the same meaning as in section 55. Crofting community right to buy 75 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Increased rates for non-resident transactions Increased rates for non-resident transactions 75ZA 1 In its application for the purpose of determining the amount of tax chargeable in respect of a chargeable transaction that is a non-resident transaction, this Part has effect as if 2% were added to each rate specified in the rate-specifying provisions. 2 The “rate-specifying provisions” are— a in section 55(1B), Table A; b in Schedule 4ZA, in paragraph 1(2), Table A; c in Schedule 4A, paragraph 3(1)(a); d in Schedule 5, in paragraph 2(3), Table A; e in Schedule 6ZA, in paragraph 4, Table A; f in section 74(1A), Step 4. 3 Schedule 9A defines “non-resident transaction” and makes further provision in connection with this section. Anti-avoidance Anti-avoidance 75A 1 This section applies where— a one person (V) disposes of a chargeable interest and another person (P) acquires either it or a chargeable interest deriving from it, b a number of transactions (including the disposal and acquisition) are involved in connection with the disposal and acquisition (“the scheme transactions”), and c the sum of the amounts of stamp duty land tax payable in respect of the scheme transactions is less than the amount that would be payable on a notional land transaction effecting the acquisition of V's chargeable interest by P on its disposal by V. 2 In subsection (1) “ transaction ” includes, in particular— a a non-land transaction, b an agreement, offer or undertaking not to take specified action, c any kind of arrangement whether or not it could otherwise be described as a transaction, and d a transaction which takes place after the acquisition by P of the chargeable interest. 3 The scheme transactions may include, for example— a the acquisition by P of a lease deriving from a freehold owned or formerly owned by V; b a sub-sale to a third person; c the grant of a lease to a third person subject to a right to terminate; d the exercise of a right to terminate a lease or to take some other action; e an agreement not to exercise a right to terminate a lease or to take some other action; f the variation of a right to terminate a lease or to take some other action. 4 Where this section applies— a any of the scheme transactions which is a land transaction shall be disregarded for the purposes of this Part, but b there shall be a notional land transaction for the purposes of this Part effecting the acquisition of V's chargeable interest by P on its disposal by V. 5 The chargeable consideration on the notional transaction mentioned in subsections (1)(c) and (4)(b) is the largest amount (or aggregate amount)— a given by or on behalf of any one person by way of consideration for the scheme transactions, or b received by or on behalf of V (or a person connected with V within the meaning of section 1122 of the Corporation Tax Act 2010 ) by way of consideration for the scheme transactions. 6 The effective date of the notional transaction is— a the last date of completion for the scheme transactions, or b if earlier, the last date on which a contract in respect of the scheme transactions is substantially performed. 7 This section does not apply where subsection (1)(c) is satisfied only by reason of— a sections 71A to 73, or b a provision of Schedule 9. Anti-avoidance: incidental transactions 75B 1 In calculating the chargeable consideration on the notional transaction for the purposes of section 75A(5), consideration for a transaction shall be ignored if or in so far as the transaction is merely incidental to the transfer of the chargeable interest from V to P. 2 A transaction is not incidental to the transfer of the chargeable interest from V to P— a if or in so far as it forms part of a process, or series of transactions, by which the transfer is effected, b if the transfer of the chargeable interest is conditional on the completion of the transaction, or c if it is of a kind specified in section 75A(3). 3 A transaction may, in particular, be incidental if or in so far as it is undertaken only for a purpose relating to— a the construction of a building on property to which the chargeable interest relates, b the sale or supply of anything other than land, or c a loan to P secured by a mortgage, or any other provision of finance to enable P, or another person, to pay for part of a process, or series of transactions, by which the chargeable interest transfers from V to P. 4 In subsection (3)— a paragraph (a) is subject to subsection (2)(a) to (c), b paragraph (b) is subject to subsection (2)(a) and (c), and c paragraph (c) is subject to subsection (2)(a) to (c). 5 The exclusion required by subsection (1) shall be effected by way of just and reasonable apportionment if necessary. 6 In this section a reference to the transfer of a chargeable interest from V to P includes a reference to a disposal by V of an interest acquired by P. Anti-avoidance: supplemental 75C 1 A transfer of shares or securities shall be ignored for the purposes of section 75A if but for this subsection it would be the first of a series of scheme transactions. 2 The notional transaction under section 75A attracts any relief under this Part which it would attract if it were an actual transaction (subject to the terms and restrictions of the relief). 3 The notional transaction under section 75A is a land transaction entered into for the purposes of or in connection with the transfer of an undertaking or part for the purposes of paragraphs 7 and 8 of Schedule 7, if any of the scheme transactions is entered into for the purposes of or in connection with the transfer of the undertaking or part. 4 In the application of section 75A(5) no account shall be taken of any amount paid by way of consideration in respect of a transaction to which any of sections 60, 61, 63, 64, 65, 66, 67, 69, 71 and 74 , or a provision of Schedule 6A , 7A or 8, applies. 5 In the application of section 75A(5) an amount given or received partly in respect of the chargeable interest acquired by P and partly in respect of another chargeable interest shall be subjected to just and reasonable apportionment. 6 Section 53 applies to the notional transaction under section 75A. 7 Paragraph 5 of Schedule 4 applies to the notional transaction under section 75A. 8 For the purposes of section 75A— a an interest in a property-investment partnership (within the meaning of paragraph 14 of Schedule 15) is a chargeable interest in so far as it concerns land owned by the partnership, ... b . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8A Nothing in Part 3 of Schedule 15 applies to the notional transaction under section 75A. 9 For the purposes of section 75A a reference to an amount of consideration includes a reference to the value of consideration given as money's worth. 10 Stamp duty land tax paid in respect of a land transaction which is to be disregarded by virtue of section 75A(4)(a) is taken to have been paid in respect of the notional transaction by virtue of section 75A(4)(b). 11 The Treasury may by order provide for section 75A not to apply in specified circumstances. 12 An order under subsection (11) may include incidental, consequential or transitional provision and may make provision with retrospective effect. Returns and other administrative matters Duty to deliver land transaction return 76 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 14 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 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 the transaction, ... b . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Notifiable transactions 77 1 A land transaction is notifiable if it is— a an acquisition of a major interest in land that does not fall within one or more of the exceptions in section 77A, b an acquisition of a chargeable interest other than a major interest in land where there is chargeable consideration in respect of any part of which tax is chargeable at a rate of more than 0% or would be so chargeable but for a relief, c a land transaction that a person is treated as entering into by virtue of section 44A(3), ... d a notional land transaction under section 75A or e a notional or additional land transaction under paragraph 5 of Schedule 2A. 2 This section has effect subject to— a sections 71A(7) ..., and b paragraph 30 of Schedule 15. 3 In this section “ relief ” does not include an exemption from charge under Schedule 3. Exceptions for certain acquisitions of major interests in land 77A 1 The exceptions referred to in section 77(1)(a) are as follows. 1 An acquisition which is exempt from charge under Schedule 3. 2 An acquisition (other than the grant, assignment or surrender of a lease) where the chargeable consideration for that acquisition, together with the chargeable consideration for any linked transactions, is less than £40,000. 3 The grant of a lease for a term of 7 years or more where— a any chargeable consideration other than rent is less than £40,000, and b the relevant rent is less than £1,000. 4 The assignment or surrender of a lease where— a the lease was originally granted for a term of 7 years or more, and b the chargeable consideration for the assignment or surrender is less than £40,000. 5 The grant of a lease for a term of less than 7 years where the chargeable consideration does not exceed the zero rate threshold. 6 The assignment or surrender of a lease where— a the lease was originally granted for a term of less than 7 years, and b the chargeable consideration for the assignment or surrender does not exceed the zero rate threshold. 2 Chargeable consideration for an acquisition does not exceed the zero rate threshold if it does not consist of or include— a any amount in respect of which tax is chargeable at a rate of more than 0% , or b any amount in respect of which tax would be so chargeable but for a relief. 3 In this section— “ annual rent ” has the meaning given in paragraph 9A of Schedule 5, “ relevant rent ” means— the annual rent, or in the case of the grant of a lease to which paragraph 11 or 19 of Schedule 15 applies, the relevant chargeable proportion of the annual rent (as calculated in accordance with that paragraph), and “ relief ” does not include an exemption from charge under Schedule 3. Returns, enquiries, assessments and related matters 78 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; 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. 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. Disclosure of information contained in land transaction returns 78A 1 Relevant information contained in land transaction returns delivered under section 76 (whether before or after the commencement of this section) is to be available for use— a by listing officers appointed under section 20 of the Local Government Finance Act 1992, for the purpose of facilitating the compilation and maintenance by them of valuation lists in accordance with Chapter 2 of Part 1 of that Act, b as evidence in an appeal by virtue of section 24(6) of that Act to a valuation tribunal ..., c by the Commissioner of Valuation for Northern Ireland, for the purpose of maintaining a valuation list prepared, and from time to time altered, by him in accordance with Part 3 of the Rates (Northern Ireland) Order 1977, and d by such other persons or for such other purposes as the Treasury may by regulations prescribe. 2 In this section, “ relevant information ” means any information of the kind mentioned in paragraph 1(4) of Schedule 10 (information corresponding to particulars required under previous legislation). 3 The Treasury may by regulations amend the definition of relevant information in subsection (2). 4 In this section “ valuation tribunal ” means— a in relation to England: the Valuation Tribunal for England; b in relation to Wales: a valuation tribunal established under paragraph 1 of Schedule 11 to the Local Government Finance Act 1988. Registration of land transactions etc 79 1 A land transaction to which this section applies, or (as the case may be) a 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, b . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 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 to compliance with the requirements of this Part in relation to the transaction or such information about compliance as the Commissioners for Her Majesty's Revenue and Customs may specify in regulations. 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. 2 This section applies to every notifiable land transaction other than a transaction treated as taking place— a under subsection (4) of section 44 (contract and conveyance) or under that section as it applies by virtue of— i . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ii paragraph 12B of Schedule 17A (assignment of agreement for lease), b under subsection (3) of section 44A (contract providing for conveyance to third party) or under that section as it applies by virtue of section 45A (contract providing for conveyance to third party: effect of transfer of rights). ba under paragraph 5 of Schedule 2A (transactions entered into before completion of contract), c under paragraph 12A(2) ... of Schedule 17A (agreement for lease), or d under paragraph 13 (increase of rent) or 15A (reduction of rent or term) of that Schedule. In this subsection “ contract ” includes any agreement and “ conveyance ” includes any instrument. 2A Subsection (1), so far as relating to the entry of a notice under section 34 of the Land Registration Act 2002 or section 38 of the Land Registration Act (Northern Ireland) 1970 (notice in respect of interest affecting registered land), does not apply where the land transaction in question is the variation of a lease. 3 The certificate referred to in subsection (1) must be ...— a a certificate by the Inland Revenue (a “ Revenue certificate ”) that a land transaction return has been delivered in respect of the transaction, ... b . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 The Inland Revenue may make provision by regulations about Revenue certificates. The regulations may, in particular— 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; d provide for the issue of multiple certificates where a return is made relating to more than one transaction. 5 Part 2 of Schedule 11 imposes a duty to keep and preserve records in respect of transactions that are not notifiable. 6 The registrar ...— a shall allow the Inland Revenue to inspect any certificates ... produced to him under this section and in his possession, 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. Adjustment where contingency ceases or consideration is ascertained 80 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 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). 2 If the effect of the new information is that a transaction becomes notifiable, the purchaser must make a return to HMRC within 14 days. 2A If the effect of the new information is that— a tax is payable in respect of a transaction where none was payable before and subsection (2) does not apply, or b additional tax is payable in respect of a transaction, the purchaser must make a further return to HMRC within 30 days. 2B For the purposes of subsections (2) and (2A), any tax or additional tax payable is calculated according to the effective date of the transaction. 2C If a purchaser is required to make a return under subsection (2) or a further return under subsection (2A)— a that 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, and b the tax or additional tax payable must be paid not later than the filing date for that return. 3 The provisions of Schedule 10 (returns, enquiries, assessments and other matters) apply to a return under this section as they apply to a return under section 76 (general requirement to make land transaction return), subject to the adaptation that references to the effective date of the transaction shall be read as references to the date of the event as a result of which the return is required . 4 If the effect of the new information is that less tax is payable in respect of a transaction (calculated according to its effective date) than has already been paid, a the purchaser may, within the period allowed for amendment of the land transaction return, amend the return accordingly; b after the end of that period he may (if the land transaction return is not so amended) make a claim to the Inland Revenue for repayment of the amount overpaid . 4A Where the transaction (“ the relevant transaction ”) is the grant or assignment of a lease, no claim may be made under subsection (4)— a in respect of the repayment (in whole or part) of any loan or deposit that is treated by paragraph 18A of Schedule 17A as being consideration given for the relevant transaction, or b in respect of the refund of any of the consideration given for the relevant transaction, in a case where the refund— i is made under arrangements that were made in connection with the relevant transaction, and ii is contingent on the determination or assignment of the lease or on the grant of a chargeable interest out of the lease. 5 This section does not apply so far as the consideration consists of rent (see paragraph 8 of Schedule 17A). Further return where relief withdrawn 81 1 Where relief is withdrawn to any extent under— za paragraph 11 of Schedule 6A (relief for certain acquisitions of residential property), a Part 1 of Schedule 7 (group relief), b Part 2 of that Schedule (reconstruction or acquisition relief), ... ba paragraph 5, 7 or 8 of Schedule 7A (PAIF seeding relief), bb paragraph 13, 17 or 18 of Schedule 7A ( co-ownership scheme seeding relief), or c Schedule 8 (charities relief), the purchaser must deliver a further return before the end of the period of 30 days after the date on which the disqualifying event occurred. 1A Where relief is withdrawn to any extent under— a any of paragraphs 5G to 5L of Schedule 4A (relief from higher rate under Schedule 4A (higher rate for certain transactions)), aa Part 3 of Schedule 6C (relief for special tax sites ), other than in a case to which paragraph 11 of that Schedule (alternative finance arrangements) applies, b paragraph 6 of Schedule 7A (PAIF seeding relief), or c paragraph 14 or 16 of Schedule 7A ( co-ownership scheme seeding relief), the purchaser must deliver a further return before the end of the period of 30 days after the relevant date. 1B In subsection (1A) “ the relevant date ” means— a in the case of relief under paragraph 5 of Schedule 4A (businesses of letting, trading in or redeveloping properties), the first day in the period mentioned in paragraph 5G(2) on which a requirement under paragraph 5G(3) was not met in the case of the chargeable interest in question; b in the case of relief under paragraph 5B of that Schedule (trades involving making a dwelling available to the public), the first day in the period mentioned in paragraph 5H(2) on which a requirement under paragraph 5H(3) was not met in the case of the chargeable interest in question; c in the case of relief under paragraph 5C of that Schedule (financial institutions acquiring dwellings in the course of lending), the first day in the period mentioned in paragraph 5I(2) on which a requirement under paragraph 5I(3) was not met in the case of the chargeable interest in question; ca in the case of relief under paragraph 5CA of that Schedule (acquisition under a regulated home reversion plan), the first day in the period mentioned in paragraph 5IA(2) of that Schedule on which the purchaser holds the higher threshold interest otherwise than for the purposes of the regulated home reversion plan, unless paragraph 5IA(3)(a) and (b) applies; d in the case of relief under paragraph 5D of that Schedule (dwellings for occupation by certain employees etc ), the first day in the period mentioned in paragraph 5J(2) on which a requirement under paragraph 5J(3) was not met in the case of the chargeable interest in question; da in the case of relief under paragraph 5EA of that Schedule (acquisition by management company of flat for occupation by caretaker), the first day in the period mentioned in paragraph 5JA(2) of that Schedule on which the purchaser holds the higher threshold interest otherwise than for the purpose of making the flat available for use as caretaker accommodation; e in the case of relief under paragraph 5F of that Schedule (farmhouses), the first day in the period mentioned in paragraph 5K(2) on which a requirement under paragraph 5K(3) was not met in the case of the chargeable interest in question. ea in the case of relief under paragraph 5FA of that Schedule (qualifying housing co-operatives), the date determined in accordance with subsection (1C); eb in the case of relief under Schedule 6C (relief for special tax sites ), the last day in the control period on which the qualifying land is used exclusively in a qualifying manner; f in the case of relief under paragraph 6 of Schedule 7A (PAIF seeding relief: portfolio test)— i where relief is withdrawn under paragraph 6(1), the last day of the seeding period (see paragraph 3 of that Schedule), or ii where relief is withdrawn under paragraph 6(3), the first time mentioned in paragraph 6(3)(a) or (b) at which the portfolio test was not met; g in the case of relief under paragraph 14 of Schedule 7A ( co-ownership scheme seeding relief: genuine diversity of ownership condition), the first time mentioned in paragraph 14(1) at which the genuine diversity of ownership condition was not met; h in the case of relief under paragraph 16 of Schedule 7A ( co-ownership scheme seeding relief: portfolio test)— i where relief is withdrawn under paragraph 16(1), the last day of the seeding period (see paragraph 11 of that Schedule), or ii where relief is withdrawn under paragraph 16(3), the first time mentioned in paragraph 16(3)(a) or (b) at which the portfolio test was not met. 1C For the purposes of subsection (1B)(ea) (relief under paragraph 5FA of Schedule 4A withdrawn because the conditions in paragraph 5L(3) of that Schedule are met), the date is— a where paragraph 5L(4) of Schedule 4A does not apply, the first day in the period mentioned in paragraph 5L(3)(a) of that Schedule on which the purchaser is not a qualifying housing body; b where paragraph 5L(4) or (7) of that Schedule applies and relief is withdrawn because condition A in paragraph 5L(5) of that Schedule is met, the day of succession of the relevant successor; c where paragraph 5L(4) or (7) of that Schedule applies and relief is withdrawn because condition B in paragraph 5L(6) of that Schedule is met, the first day in the part of the control period that falls after the day of succession of the relevant successor on which the relevant successor is not a qualifying housing body. 1D Where relief is withdrawn to any extent under paragraph 5L of Schedule 4A in a case to which paragraph 5L(4) or (7) applies, the reference in subsection (1A) to the purchaser is to be read as a reference to the relevant successor. 2 The return must— a include a self-assessment of the amount of tax chargeable, ... b . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2A Where subsection (1) or (1A) applies any tax payable must be paid not later than the filing date for the return. 3 The provisions of Schedule 10 (returns, assessments and other matters) apply for the purposes of this section with the following modifications— a references to a return under section 76 (general requirement to deliver land transaction return) are to be read as references to a return under subsection (1) or (1A); b references to the transaction to which a return relates are to be read as references to the withdrawal of relief in respect of which the return is required under subsection (1) or (1A); c references to a chargeable transaction to which (as yet) no return relates are to be read as references to the withdrawal of relief under any of the provisions mentioned in subsection (1) or (1A); d references to the effective date of a transaction— i in relation to the withdrawal of relief under any of the provisions mentioned in subsection (1), are to be read as references to the date on which the disqualifying event occurs, and ii in relation to the withdrawal of relief under any of the provisions mentioned in subsection (1A), are to be read as references to the relevant date (see subsections (1B) and (1C) ); e where, by virtue of subsection (1D) , a return is to be made by the relevant successor, references to the purchaser are to be read as references to the relevant successor; f paragraph 36(5A) is to be read as if it also permitted an appeal under paragraph 35(1)(e) on the ground that no further return is required. 4 In this section “ the disqualifying event ” means— za in relation to the withdrawal of relief under Schedule 6A, an event mentioned in paragraph (a), (b) or (c) of paragraph 11(2), (3), (4) or (5) of that Schedule; a in relation to the withdrawal of group relief, the purchaser ceasing to be a member of the same group as the vendor within the meaning of Part 1 of Schedule 7; b in relation to the withdrawal of reconstruction or acquisition relief, the change of control of the acquiring company mentioned in paragraph 9(1)(a) of Schedule 7 or, as the case may be, the event mentioned in paragraph 11(1)(a) or (2)(a) of that Schedule; ba in relation to the withdrawal of PAIF seeding relief— i the purchaser ceasing to be a property AIF as mentioned in paragraph 5 of Schedule 7A, ii a person making a relevant disposal of units as mentioned in paragraph 7 of that Schedule, or iii the grant of permission to a non-qualifying individual to occupy a dwelling as mentioned in paragraph 8 of that Schedule; bb in relation to the withdrawal of co-ownership scheme seeding relief— i the purchaser ceasing to be a co-ownership ... contractual scheme as mentioned in paragraph 13 of Schedule 7A, ii a person making a relevant disposal of units as mentioned in paragraph 17 of that Schedule, or iii the grant of permission to a non-qualifying individual to occupy a dwelling as mentioned in paragraph 18 of that Schedule; c in relation to the withdrawal of charities relief, a disqualifying event as defined in paragraph 2(3) or 3(2) of Schedule 8. 4A Terms used in paragraph (eb) of subsection (1B) which are defined for the purposes of Schedule 6C have the same meaning in that paragraph as they have in that Schedule. 4B Paragraph 10 of Schedule 6C applies for the purposes of subsection (1B)(eb) as it applies for the purposes of paragraph 8 of that Schedule. 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 In subsections (1C) , (1D) and (3)(e) (which relate to the withdrawal of relief under paragraph 5L of Schedule 4A) “the relevant successor” means the person who is the most recent successor in the chain of succession at the time relief is withdrawn (and that person could be the first successor, the second successor or a subsequent successor). 7 Terms used in subsections (1C) and (6) which are defined for the purposes of paragraph 5L of Schedule 4A have the same meaning in those subsections as they have in that paragraph. Alternative finance arrangements: return where relief withdrawn 81ZA 1 Where relief given in respect of a transaction entered into under alternative finance arrangements is withdrawn to any extent under any of paragraphs 6D, 6F, 6G , 6H or 6I of Schedule 4A (higher rate of tax: alternative finance arrangements) or under Part 3 of Schedule 6C (relief for special tax sites ) in a case to which paragraph 11 of that Schedule (alternative finance arrangements) applies — a the relevant person must deliver a return to HMRC before the end of the period of 30 days after the date of the disqualifying event; b the return must contain a self-assessment of the additional tax chargeable as a result of the withdrawal of the relief; c the tax so chargeable is calculated according to the effective date of the transaction in respect of which the relief was allowed. 2 The provisions of Schedule 10 (returns, assessments and other matters) apply for the purposes of this section with the following modifications— a references to a return under section 76 (general requirement to deliver land transaction return) are to be read as references to a return under subsection (1); b references to the transaction to which a return relates are to be read as references to the withdrawal of relief in respect of which the return is required under subsection (1); c references to a chargeable transaction to which (as yet) no return relates are to be read as references to the withdrawal of relief under any of the provisions mentioned in subsection (1); d references to the effective date of a transaction are to be read as references to the date of the disqualifying event; e references to the purchaser are to be read as references to the relevant person so far as that is necessary as a result of subsection (1) of this section or section 85(3) (payment of additional tax by relevant person where relief withdrawn); f paragraph 36(5A) is to be read as if it also permitted an appeal under paragraph 35(1)(e) on the ground that no further return is required. 3 In this section “ the date of the disqualifying event ” means — a where the relief was given under paragraph 5, 5B, 5C, 5D or 5F of Schedule 4A, the first day in the control period on which a relevant requirement was not met; b where the relief was given under paragraph 5FA of Schedule 4A, the date determined in accordance with subsection (5A). c where the relief was given under Part 2 of Schedule 6C, the last day in the control period on which the qualifying land is used exclusively in a qualifying manner. 4 In subsection (3)(a) “ relevant requirement ” means— a where the relief was given under paragraph 5 of Schedule 4A (businesses of letting, trading in or redeveloping properties), a requirement under paragraph 5G(3) of that Schedule; b where the relief was given under paragraph 5B of that Schedule (trades involving making a dwelling available to the public), a requirement under paragraph 5H(3) of that Schedule; c where the relief was given under paragraph 5C of that Schedule (financial institutions acquiring dwellings in the course of lending), a requirement under paragraph 5I(3) of that Schedule; d where the relief was given under paragraph 5D of that Schedule (dwellings for occupation by certain employees etc ), a requirement under paragraph 5J(3) of that Schedule; e where the relief was given under paragraph 5F of that Schedule (farmhouses), a requirement under paragraph 5K(3) of that Schedule. 5 In subsection (3)(a) “ the control period ” has the same meaning as in paragraph 5G, 5H, 5I, 5J or 5K (as the case requires) of Schedule 4A. 5A For the purposes of subsection (3)(b) (relief withdrawn because the conditions in paragraph 6I(2) of Schedule 4A are met), the date is— a where paragraph 6I(3) of Schedule 4A does not apply, the first day in the period mentioned in paragraph 6I(2)(a) of that Schedule on which the relevant person is not a qualifying housing body; b where paragraph 6I(3) or (6) of that Schedule applies and relief is withdrawn because condition A in paragraph 6I(4) of that Schedule is met, the day of succession of the relevant successor; c where paragraph 6I(3) or (6) of that Schedule applies and relief is withdrawn because condition B in paragraph 6I(5) of that Schedule is met, the first day in the part of the control period that falls after the day of succession of the relevant successor on which the relevant successor is not a qualifying housing body. 6 In this section— “ alternative finance arrangements ” means any arrangements such as are mentioned in section 71A, 72, 72A or 73; “the relevant person” means— the person (other than the financial institution) who entered into the arrangements in question, or where relief is withdrawn to any extent under paragraph 6I of Schedule 4A in a case to which paragraph 6I(3) or (6) applies, the relevant successor; “the relevant successor” means the person who is the most recent successor in the chain of succession at the time relief is withdrawn (and that person could be the first successor, the second successor or a subsequent successor). 6A Terms used in paragraph (c) of subsection (3) which are defined for the purposes of Schedule 6C have the same meaning in that paragraph as they have in that Schedule (as modified by paragraph 11 of that Schedule). 6B Paragraph 10 of Schedule 6C (as modified by paragraph 11 of that Schedule) applies for the purposes of subsection (3)(c) as it applies for the purposes of paragraph 8 of that Schedule. 7 Terms used in subsection (5A), and in the definition of “the relevant successor” in subsection (6), which are defined for the purposes of paragraph 6I of Schedule 4A have the same meaning in those provisions as they have in that paragraph. Return or further return in consequence of later linked transaction 81A 1 Where the effect of a transaction (“the later transaction”) that is linked to an earlier transaction is that the earlier transaction becomes notifiable, the purchaser under the earlier transaction must deliver a return in respect of that transaction before the end of the period of 14 days after the effective date of the later transaction. 1A Where the effect of a transaction (“the later transaction”) that is linked to an earlier transaction is that— a tax is payable in respect of the earlier transaction where none was payable before and subsection (1) does not apply, or b additional tax is payable in respect of the earlier transaction, the purchaser under the earlier transaction must deliver a further return in respect of that transaction before the end of the period of 30 days after the effective date of the later transaction. 1B For the purposes of subsections (1) and (1A), any tax or additional tax payable is calculated according to the effective date of the earlier transaction. 1C Where a purchaser is required to deliver a return under subsection (1) or a further return under subsection (1A)— a that return must include a self-assessment of the amount of tax chargeable as a result of the later transaction, and b the tax or additional tax payable must be paid not later than the filing date for that return. 2 The provisions of Schedule 10 (returns, enquiries, assessments and other matters) apply to a return under this section as they apply to a return under section 76 (general requirement to deliver land transaction return), with the following adaptations— a in paragraph 5 (formal notice to deliver return), the requirement in sub-paragraph (2)(a) that the notice specify the transaction to which it relates shall be read as requiring both the earlier and later transactions to be specified; b references to the effective date of the transaction to which the return relates shall be read as references to the effective date of the later transaction. 3 This section does not affect any requirement to make a return under section 76 in respect of the later transaction. Declaration by person authorised to act on behalf of individual 81B 1 This section applies to the declaration mentioned in paragraph 1(1)(c) of Schedule 10 ... (declaration that return ... is correct and complete). 2 The requirement that an individual make such a declaration (alone or jointly with others) is treated as met if a declaration to that effect is made by a person authorised to act on behalf of that individual in relation to the matters to which the return or certificate relates. 3 For the purposes of this section a person is not regarded as authorised to act on behalf of an individual unless he is so authorised by a power of attorney in writing, signed by that individual. In this subsection as it applies in Scotland “ power of attorney ” includes factory and commission. 4 Nothing in this section affects the making of a declaration in accordance with— a section 100(2) (persons through whom a company acts), or b . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Loss or destruction of, or damage to, return etc 82 1 This section applies where— a a return delivered to the Inland Revenue, or b any other document relating to tax made by or provided to the Inland Revenue, has been lost or destroyed, or been so defaced or damaged as to be illegible or otherwise useless. 2 The Inland Revenue may treat the return as not having been delivered or the document as not having been made or provided. 3 Anything done on that basis shall be as valid and effective for all purposes as it would have been if the return had not been made or the document had not been made or provided. 4 But if as a result a person is charged with tax and he proves to the satisfaction of the tribunal that he has already paid tax in respect of the transaction in question, relief shall be given, by reducing the charge or by repayment as the case may require. Claims not included in returns 82A Schedule 11A has effect with respect to claims not included in returns. Formal requirements as to assessments, penalty determinations etc 83 1 An assessment, determination, notice or other document required to be used in assessing, charging, collecting and levying tax or determining a penalty under this Part must be in accordance with the forms prescribed from time to time by the Board and a document in the form so prescribed and supplied or approved by the Board is valid and effective. 2 Any such assessment, determination, notice or other document purporting to be made under this Part is not ineffective— a for want of form, or b by reason of any mistake, defect or omission in it, if it is substantially in conformity with this Part and its intended effect is reasonably ascertainable by the person to whom it is directed. 3 The validity of an assessment or determination is not affected— a by any mistake in it as to— i the name of a person liable, or ii the amount of the tax charged, or b by reason of any variance between the notice of assessment or determination and the assessment or determination itself. Delivery and service of documents 84 1 A notice or other document to be served under this Part on a person may be delivered to him or left at his usual or last known place of abode. 2 A notice or other document to be given, served or delivered under this Part may be served by post. 3 For the purposes of section 7 of the Interpretation Act 1978 (c. 30) (general provisions as to service by post) any such notice or other document to be given or delivered to, or served on, any person by the Inland Revenue is properly addressed if it is addressed to that person— a in the case of an individual, at his usual or last known place of residence or his place of business; b in the case of a company— i at its principal place of business, ii if a liquidator has been appointed, at his address for the purposes of the liquidation, or iii at any place prescribed by regulations made by the Inland Revenue. Liability for and payment of tax Liability for tax 85 1 The purchaser is liable to pay the tax in respect of a chargeable transaction. 2 As to the liability of purchasers acting jointly see— section 103(2)(c) (joint purchasers); Part 2 of Schedule 15 (partners); and paragraph 5 of Schedule 16 (trustees). 2A Where relief is withdrawn to any extent under paragraph 5L of Schedule 4A (qualifying housing co-operatives) in a case to which paragraph 5L(4) or (7) applies— a subsection (1) does not apply in relation to the additional tax payable as a result of the withdrawal of the relief, and b the relevant successor is liable to pay that additional tax. 2B In subsection (2A) “the relevant successor” has the same meaning as it has in subsections (1C) , (1D) and (3)(e) of section 81 (see subsections (6) and (7) of that section). 3 Where relief given in respect of a transaction entered into under alternative finance arrangements is withdrawn to any extent under any of paragraphs 6D, 6F, 6G , 6H and 6I of Schedule 4A (higher rate: alternative finance arrangements) or under Part 3 of Schedule 6C (relief for special tax sites ) in a case to which paragraph 11 of that Schedule (alternative finance arrangements) applies — a subsection (1) does not apply in relation to the additional tax payable as a result of the withdrawal of the relief, and b the relevant person is liable to pay that additional tax. 4 In subsection (3) “ the relevant person ” has the same meaning as in section 81ZA (see subsections (6) and (7) of that section) . Payment of tax 86 1 Tax payable in respect of a land transaction must be paid not later than the filing date for the land transaction return relating to the transaction. 2 Tax payable as a result of the withdrawal of relief under— za any of paragraphs 5G to 5L of Schedule 4A (higher rate for certain transactions), zb Part 3 of Schedule 6C (relief for special tax sites ), other than in a case to which paragraph 11 of that Schedule (alternative finance arrangements) applies, a Part 1 of Schedule 7 (group relief), b Part 2 of that Schedule (reconstruction or acquisition relief), ... ba Part 1 of Schedule 7A (PAIF seeding relief), bb Part 2 of Schedule 7A ( co-ownership scheme seeding relief), or c Schedule 8 (charities relief), must be paid not later than the filing date for the return relating to the withdrawal (see section 81). 2A Tax payable as a result of a withdrawal of relief under any of paragraphs 6D, 6F, 6G , 6H and 6I of Schedule 4A (higher rate: alternative finance arrangements) or under Part 3 of Schedule 6C (relief for special tax sites ) in a case to which paragraph 11 of that Schedule (alternative finance arrangements) applies must be paid not later than the filing date for the return relating to the withdrawal (see section 81ZA(1)). 3 Tax payable as a result of the amendment of a return must be paid forthwith or, if the amendment is made before the filing date for the return, not later than that date. 4 Tax payable in accordance with a determination or assessment by the Inland Revenue must be paid within 30 days after the determination or assessment is issued. 5 The above provisions are subject to— a section 90 (application to defer payment of tax in case of contingent or uncertain consideration), ... b paragraphs 39 and 40 of Schedule 10 (postponement of payment pending determination of appeal) , and c regulation 31 of the Co-ownership Contractual Schemes (Tax) Regulations 2025 (withdrawal of seeding relief: application to postpone payment of tax where appeal against relevant decisions). 5A The above provisions are also subject to paragraph 7 of Schedule 61 to the Finance Act 2009 (payment of tax where land ceases to qualify for relief in respect of alternative finance investment bonds). 6 This section does not affect the date from which interest is payable (as to which, see section 87). Interest on unpaid tax 87 1 Interest is payable on the amount of any unpaid tax from the end of the period of 30 days after the relevant date until the tax is paid. 1A But where the relevant date is determined by subsection (3)(aa), (aaa), (ab) or (c) or section 87A(4) or (6) , and a return is required to be delivered before the end of the period of 14 days after that relevant date, interest is instead payable on the amount of any unpaid tax from the end of that period until the tax is paid. 2 The Inland Revenue may by regulations amend subsection (1) or (1A) so as to make interest run from the end of such shorter period after the relevant date as may be prescribed or, if the regulations so provide, from that date. 3 For the purposes of this section “ the relevant date ” is— za in the case of an amount payable because relief is withdrawn under any of paragraphs 5G to 5L of Schedule 4A (higher rate for certain transactions), the date which is the relevant date for the purposes of section 81(1A); zb in the case of an amount payable because relief is withdrawn under any of paragraphs 6D, 6F, 6G, 6H and 6I of Schedule 4A, the date which is the date of the disqualifying event for the purposes of section 81ZA (see subsection (3) of that section); a in the case of an amount payable because relief is withdrawn under— ia Schedule 6A (relief for certain acquisitions of residential property), i Part 1 of Schedule 7 (group relief), ii Part 2 of that Schedule (reconstruction or acquisition relief), ... iia paragraph 5, 7 or 8 of Schedule 7A (PAIF seeding relief), iib paragraph 13, 17 or 18 of Schedule 7A ( co-ownership scheme seeding relief), or (except in a case to which section 87A applies) iii Schedule 8 (charities relief), the date of the disqualifying event; aza . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . azaa in the case of an amount payable because relief is withdrawn under Part 3 of Schedule 6C (relief for special tax sites ), other than in a case to which paragraph 11 of that Schedule (alternative finance arrangements) applies, the date which is the relevant date for the purposes of section 81(1A); azab in the case of an amount payable because relief is withdrawn under Part 3 of Schedule 6C (relief for special tax sites ) in a case to which paragraph 11 of that Schedule (alternative finance arrangements) applies, the date which is the date of the disqualifying event for the purposes of section 81ZA (see subsection (3) of that section); azb in the case of an amount payable under paragraph 6(3) of Schedule 7A (PAIF seeding relief: portfolio test), the first time mentioned in paragraph 6(3)(a) or (b) at which the portfolio test was not met; azc in the case of an amount payable under paragraph 14(1) of Schedule 7A ( co-ownership scheme seeding relief: genuine diversity of ownership condition) because the genuine diversity of ownership condition was not met at a time mentioned in paragraph 14(1)(b) or (c), the first time mentioned in paragraph 14(1)(b) or (c) at which that condition was not met; azd in the case of an amount payable under paragraph 16(3) of Schedule 7A ( co-ownership scheme seeding relief: portfolio test), the first time mentioned in paragraph 16(3)(a) or (b) at which the portfolio test was not met; aa in the case of an amount payable under section 81A in respect of an earlier transaction because of the effect of a later linked transaction, the effective date of the later transaction; aaa in the case of an amount payable under paragraph 3(3) of Schedule 17A (leases that continue after a fixed term) by reason of the continuation of a lease for a period (or further period) under paragraph 3(2) or (6) of that Schedule, the final day of the period (or further period), ab in the case of an amount payable under paragraph ... 4(3) of Schedule 17A ( ... treatment of leases for an indefinite term), the day on which the lease becomes treated as being for a longer fixed term; b in the case of a deferred payment under section 90, the date when the deferred payment is due; c in any other case, the effective date of the transaction. 4 In subsection (3)(a) “ the disqualifying event ” has the same meaning as in section 81(4) (except in a case to which section 87A applies) . 5 Subsection (3)(c) applies in a case within section 51 (contingent, uncertain or unascertained consideration) if payment is not deferred under section 90, with the result that interest on any tax payable under section 80 (adjustment where contingency ceases or consideration is ascertained) runs from the effective date of the transaction. 6 If an amount is lodged with the Inland Revenue in respect of the tax, the amount on which interest is payable is reduced by that amount. 7 Interest is calculated at the rate applicable under section 178 of the Finance Act 1989 (c. 26) (power of Treasury to prescribe rates of interest). Interest on unpaid tax: cases involving Reserved Investor Fund (Contractual Schemes) 87A 1 This section makes provision about the meaning of “ relevant date ” for the purposes of section 87 in the cases set out below where co-ownership seeding relief in relation to a land transaction has been withdrawn under paragraph 13 of Schedule 7A as a result of the purchaser ceasing to be a Reserved Investor Fund (Contractual Scheme) (and, accordingly, ceasing to be a co-ownership contractual scheme). 2 In those cases this section applies instead of section 87(3)(a)(iib) for the purposes of determining the relevant date. 3 The first case is where— a the purchaser ceases to be a Reserved Investor Fund (Contractual Scheme) by virtue of breaching the ownership requirement or the restriction requirement, and b the effective date of the relevant land transaction fell before the start of the cure period that applied in relation to the breach, and in such a case the “relevant date” is the date on which the breach mentioned in paragraph (a) first occurred. 4 The second case is where— a the purchaser ceases to be a Reserved Investor Fund (Contractual Scheme) by virtue of breaching the ownership requirement or the restriction requirement, and b the effective date of the relevant land transaction fell within the cure period that applied in relation to the breach, and in such a case the “relevant date” is the effective date of the relevant land transaction. 5 The third case is where— a the purchaser ceases to be a Reserved Investor Fund (Contractual Scheme) as a result of ceasing to meet the UK property rich condition in regulation 12 of the 2025 Regulations, and b regulation 19 of those Regulations applied in relation to the scheme, and in such a case the “ relevant date ” means the date on which regulation 19 first applied in relation to the scheme. 6 The fourth case is where— a the purchaser ceases to be a Reserved Investor Fund (Contractual Scheme) by virtue of the scheme no longer being able to rely on regulation 9 of the 2025 Regulations to meet the ownership requirement, and b the effective date of the relevant land transaction fell at a time when the scheme was relying on that regulation to meet the ownership requirement, and in such a case the “ relevant date ” means the effective date of the relevant land transaction. 7 In this section— “ the 2025 Regulations ” means the Co-ownership Contractual Schemes (Tax) Regulations 2025; “ cure period ”— in relation to a breach of the ownership requirement, means— “the 9 month period” that applies in relation to the breach under regulation 16 of the 2025 Regulations (as defined in that regulation), or if a notice is given in relation to the breach under paragraph (2) of that regulation, the period beginning with the day on which the breach occurred and ending on the day on which the notice is given; in relation to a breach of the restriction requirement, means— “the 9 month period” that applies in relation to a breach under regulation 18 of the 2025 Regulations (as defined in that regulation), or if a notice is given in relation to the breach under paragraph (3) of that regulation, the period beginning with the day on which the breach occurred and ending on the day on which the notice is given; “ ownership requirement ” has the meaning given in regulation 5 of the 2025 Regulations; “ relevant land transaction ” means the land transaction to which the withdrawal of seeding relief relates; “ restriction requirement ” has the meaning given in regulation 10(1) of the 2025 Regulations; “ UK property rich condition ” has the meaning given in regulation 12 of the 2025 Regulations. Interest on penalties 88 A penalty under this Part shall carry interest at the rate applicable under section 178 of the Finance Act 1989 from the date it is determined until payment. Interest on repayment of tax overpaid etc 89 1 A repayment by the Inland Revenue to which this section applies shall be made with interest at the rate applicable under section 178 of the Finance Act 1989 for the period between the relevant time (as defined below) and the date when the order for repayment is issued. 2 This section applies to— a any repayment of tax, and b any repayment of a penalty under this Part. In that case the relevant time is the date on which the payment of tax or penalty was made. 3 This section also applies to a repayment by the Inland Revenue of an amount lodged with them in respect of the tax payable in respect of a transaction. In that case the relevant time is the date on which the amount was lodged with them. 4 No interest is payable under this section in respect of a payment made in consequence of an order or judgment of a court having power to allow interest on the payment. 5 Interest paid to any person under this section is not income of that person for any tax purposes. Application to defer payment in case of contingent or uncertain consideration 90 1 The purchaser may apply to the Inland Revenue to defer payment of tax in a case where the amount payable depends on the amount or value of chargeable consideration that— a at the effective date of the transaction is contingent or uncertain, and b falls to be paid or provided on one or more future dates of which at least one falls, or may fall, more than six months after the effective date of the transaction. 2 The Inland Revenue may make provision by regulations for carrying this section into effect. 3 The regulations may in particular— a specify when an application is to be made; b impose requirements as to the form and contents of an application; c require the applicant to provide such information as the Inland Revenue may reasonably require for the purposes of determining whether to accept an application; d specify the grounds on which an application may be refused; e specify the procedure for reaching a decision on an application; f make provision for postponing payment of tax when an application has been made; g provide for an appeal to the tribunal against a refusal to accept an application, and make provision in relation to such an appeal corresponding to any provision made in relation to appeals under Part 7 of Schedule 10 (appeals against Revenue decisions on tax); h provide for the effect of accepting an application; i require the purchaser to make a return or further return, and to make such payments or further payments of tax as may be specified, in such circumstances as may be specified. 4 The provisions of Schedule 10 (returns, enquiries, assessments and other matters) apply to a return under this section as they apply to a land transaction return. 5 An application under this section does not affect the purchaser’s obligations as regards payment of tax in respect of chargeable consideration that has already been paid or provided or is not contingent and whose amount is ascertained or ascertainable at the time the application is made. This applies as regards both the time of payment and the calculation of the amount payable. 6 Regulations under this section may provide that where— a a payment is made as mentioned in subsection (5), and b an application under this section is accepted in respect of other chargeable consideration taken into account in calculating the amount of that payment, section 80 (adjustment where contingency ceases or consideration is ascertained) does not apply in relation to the payment and, instead, any necessary adjustment shall be made in accordance with the regulations. 7 This section does not apply so far as the consideration consists of rent. Collection and recovery of tax etc 91 1 The provisions of Schedule 12 have effect with respect to the collection and recovery of tax. In that Schedule— Part 1 contains general provisions, and Part 2 relates to court proceedings. 2 The provisions of that Schedule have effect in relation to the collection and recovery of any unpaid amount by way of— a penalty under this Part, or b interest under this Part (on unpaid tax or penalty), as if it were an amount of unpaid tax. Payment by cheque 92 For the purposes of this Part where— a payment to the Inland Revenue is made by cheque, and b the cheque is paid on its first presentation to the banker on whom it is drawn, the payment is treated as made on the day on which the cheque was received by the Inland Revenue. Compliance Information powers 93 1 Schedule 13 has effect with respect to the powers of the Inland Revenue to call for documents and information for the purposes of stamp duty land tax. 2 In that Schedule— . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ... ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Part 6 provides for an order of a judicial authority for the delivery of documents; . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Part 8 relates to falsification etc of documents. 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Power to inspect premises 94 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Offence of fraudulent evasion of tax 95 1 A person commits an offence if he is knowingly concerned in the fraudulent evasion of tax by him or any other person. 2 A person guilty of an offence under this section is liable— a on summary conviction to imprisonment for a term not exceeding six months or a fine not exceeding the statutory maximum, or both; b on conviction on indictment, to imprisonment for a term not exceeding 14 years or a fine, or both. Penalty for assisting in preparation of incorrect return etc 96 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Power to allow further time and reasonable excuse for failure 97 1 For the purposes of this Part a person shall be deemed not to have failed to do anything required to be done within a limited time if he did it within such further time, if any, as the Inland Revenue may allow. 2 Where a person had a reasonable excuse for not doing anything required to be done for the purposes of this Part— a he shall be deemed not to have failed to do it unless the excuse ceased, and b after the excuse ceased, he shall be deemed not to have failed to do it if he did it without unreasonably delay after the excuse had ceased. Admissibility of evidence not affected by offer of settlement etc 98 1 Statements made or documents produced by or on behalf of a person are not inadmissible in proceedings to which this section applies by reason only that it has been drawn to his attention— a that where serious tax fraud has been committed the Board may accept a money settlement and that the Board will accept such a settlement, and will not pursue a criminal prosecution, if he makes a full confession of all tax irregularities, or b that the extent to which he is helpful and volunteers information is a factor that will be taken into account in determining the amount of any penalty, and that he was or may have been induced thereby to make the statements or produce the documents. 2 The proceedings to which this section applies are— a any criminal proceedings against the person in question for any form of fraudulent conduct in connection with or in relation to tax; b any proceedings against him for the recovery of any tax due from him; c any proceedings for a penalty or on appeal against the determination of a penalty. General provisions about penalties 99 1 Schedule 14 has effect with respect to the determination of penalties under this Part and related appeals. 2 The Board may in their discretion mitigate a penalty under this Part, or stay or compound any proceedings for the recovery of such a penalty. They may also, after judgment, further mitigate or entirely remit the penalty. 2A Where a person is liable to more than one tax-related penalty in respect of the same land transaction, each penalty after the first shall be reduced so that his liability to such penalties, in total, does not exceed the amount of whichever is (or, but for this subsection, would be) the greatest one. 3 Nothing in the provisions of this Part relating to penalties affects any criminal proceedings for an offence. Application of provisions Companies 100 1 In this Part “ company ”, except as otherwise expressly provided, means any body corporate or unincorporated association, but does not include a partnership. 2 Everything to be done by a company under this Part shall be done by the company acting through— a the proper officer of the company, or b another person having for the time being having the express, implied or apparent authority of the company to act on its behalf for the purpose. Paragraph (b) does not apply where a liquidator has been appointed for the company. 3 Service on a company of any document under or in pursuance of this Part may be effected by serving it on the proper officer. 4 Tax due from a company that— a is not a body corporate, or b is incorporated under the law of a country or territory outside the United Kingdom, may, without prejudice to any other method of recovery, be recovered from the proper officer of the company. 5 The proper officer may retain out of any money coming into his hands on behalf of the company sufficient sums to pay that tax and, so far as he is not so reimbursed, he is entitled to be indemnified by the company in respect of the liability imposed on him. 6 For the purposes of this Part— a the proper officer of a body corporate is the secretary, or person acting as secretary, of the company, and b the proper officer of an unincorporated association, or of a body corporate that does not have a proper officer within paragraph (a), is the treasurer, or person acting as treasurer, of the company. This subsection does not apply if a liquidator or administrator has been appointed for the company. 7 If a liquidator or administrator has been appointed for the company, then, for the purposes of this Part— a the liquidator or, as the case may be, the administrator is the proper officer, and b if two or more persons are appointed to act jointly or concurrently as the administrator of the company, the proper officer is— i such one of them as is specified in a notice given to the Inland Revenue by those persons for the purposes of this section, or ii where the Inland Revenue is not so notified, such one or more of those persons as the Inland Revenue may designate as the proper officer for those purposes. Unit trust schemes 101 1 This Part (with the exception of the provision mentioned in subsection (7) below) applies in relation to a unit trust scheme as if— a the trustees were a company, and b the rights of the unit holders were shares in the company. 2 Each of the parts of an umbrella scheme is regarded for the purposes of this Part as a separate unit trust scheme and the scheme as a whole is not so regarded. 3 An “ umbrella scheme ” means a unit trust scheme— a that provides arrangements for separate pooling of the contributions of participants and the profits or income out of which payments are to be made for them, and b under which the participants are entitled to exchange rights in one pool for rights in another. A “ part ” of an umbrella scheme means such of the arrangements as relate to a separate pool. 4 In this Part, subject to any regulations under subsection (5)— “ unit trust scheme ” has the same meaning as in the Financial Services and Markets Act 2000 (c. 8), and “ unit holder ” means a person entitled to a share of the investments subject to the trusts of a unit trust scheme. 5 The Treasury may by regulations provide that a scheme of a description specified in the regulations is to be treated as not being a unit trust scheme for the purposes of this Part. Any such regulations may contain such supplementary and transitional provisions as appear to the Treasury to be necessary or expedient. 6 Section 620 of the Corporation Tax Act 2010 (court investment funds treated as authorised unit trusts) applies for the purposes of this Part as it applies for the purposes of that Act, with the substitution for references to an authorised unit trust of references to a unit trust scheme. 7 An unit trust scheme is not to be treated as a company for the purposes of— ... Schedule 7 (group relief, reconstruction relief or acquisition relief) , or Schedule 9A (increased rates for non-resident transactions). Open-ended investment companies 102 1 The Treasury may by regulations make such provision as they consider appropriate for securing that the provisions of this Part have effect in relation to— a open-ended investment companies of such description as may be prescribed in the regulations, and b transactions involving such companies, in a manner corresponding, subject to such modifications as the Treasury consider appropriate, to the manner in which they have effect in relation to unit trust schemes and transactions involving such trusts. 2 The regulations may, in particular, make provision— a modifying the operation of any prescribed provision in relation to open-ended investment companies so as to secure that arrangements for treating the assets of such a company as assets comprised in separate pools are given an effect corresponding to that of equivalent arrangements constituting the separate parts of an umbrella scheme; b treating the separate parts of the undertaking of an open-ended investment company in relation to which such provision is made as distinct companies for the purposes of this Part. 3 Regulations under this section may— a make different provision for different cases, and b contain such incidental, supplementary, consequential and transitional provision as the Treasury think fit. 4 In this section— “ open-ended investment company ” has the meaning given by section 236 of the Financial Services and Markets Act 2000 (c. 8); “ prescribed ” means prescribed by regulations under this section; and “ unit trust scheme ” and “ umbrella scheme ” have the same meaning as in section 101. Co-ownership ... contractual schemes 102A 1 This section has effect for the purposes of this Part. 2 This Part, with the exception of Schedule 7 (see subsection (10)), applies in relation to a co-ownership ... contractual scheme as if— a the scheme were a company, and b the rights of the participants were shares in the company. 2A In this Part, a “ co-ownership contractual scheme ” means— a a co-ownership authorised contractual scheme, or b a Reserved Investor Fund (Contractual Scheme). 3 An “ umbrella scheme ” means a co-ownership ... contractual scheme— a whose arrangements provide for separate pooling of the contributions of the participants and the profits or income out of which payments are made to them (“pooling arrangements”), and b under which the participants are entitled to exchange rights in one pool for rights in another. 4 A “ sub-scheme ”, in relation to an umbrella scheme , means such of the pooling arrangements as relate to a separate pool. 5 Each of the sub-schemes of an umbrella scheme is regarded as a separate co-ownership ... contractual scheme, and the umbrella scheme as a whole is not so regarded. 6 In relation to a sub-scheme of an umbrella scheme — a references to chargeable interests are references to such of the chargeable interests as under the pooling arrangements form part of the separate pool to which the sub-scheme relates, and b references to the scheme documents are references to such parts of the documents as apply to the sub-scheme. 7 References to a co-ownership authorised contractual scheme are treated as including a collective investment scheme which— a is constituted under the law of an EEA State ... by a contract, b is managed by a body corporate incorporated under the law of any part of the United Kingdom or of an EEA State, and c is authorised under the law of the EEA State mentioned in paragraph (a) in a way which makes it, under that law, the equivalent of a co-ownership authorised contractual scheme as defined in subsection (8), provided that, apart from this section, no charge to tax is capable of arising to the scheme under this Part. 8 Subject to any regulations under subsection (9)— “ co-ownership authorised contractual scheme ” means a co-ownership scheme which is authorised for the purposes of FSMA 2000 by an authorisation order in force under section 261D(1) of that Act; “ co-ownership scheme ” has the same meaning as in FSMA 2000 (see section 235A of that Act); “ Reserved Investor Fund (Contractual Scheme) ” has the meaning given by section 20 of the Finance (No.2) Act 2024. 9 The Treasury may by regulations provide that a scheme of a description specified in the regulations is to be treated as not being a co-ownership authorised contractual scheme or a Reserved Investor Fund (Contractual Scheme) for the purposes of this Part. Any such regulations may contain such supplementary and transitional provisions as appear to the Treasury to be necessary or expedient. 10 A co-ownership ... contractual scheme is not to be treated as a company for the purposes of Schedule 7 (group relief, reconstruction relief or acquisition relief). 11 In relation to a land transaction in respect of which a co-ownership ... contractual scheme is treated as the purchaser by virtue of this section, references to the purchaser in the following provisions are to be read as references to the operator of the scheme— a sections 76, 80, 81, 81A and 108(2) and Schedule 10 (provisions about land transaction returns and further returns, enquiries, assessments and related matters), b section 85 (liability for tax), and c section 90 (application to defer payment in case of contingent or unascertained consideration). 12 In this section— “ collective investment scheme ” has the meaning given by section 235 of FSMA 2000; “ FSMA 2000 ” means the Financial Services and Markets Act 2000; “operator”— in relation to a co-ownership ... contractual scheme constituted under the law of the United Kingdom, has the meaning given by section 237(2) of FSMA 2000, and in relation to a collective investment scheme treated as a co-ownership authorised contractual scheme by virtue of subsection (7) (equivalent EEA schemes), means the corporate body responsible for the management of the scheme (however described); “ participant ” is to be read in accordance with section 235 of FSMA 2000. Joint purchasers 103 1 This section applies to a land transaction where there are two or more purchasers who are or will be jointly entitled to the interest acquired. 2 The general rules are that— a any obligation of the purchaser under this Part in relation to the transaction is an obligation of the purchasers jointly but may be discharged by any of them, b anything required or authorised by this Part to be done in relation to the purchaser must be done by or in relation to all of them, and c any liability of the purchaser under this Part in relation to the transaction (in particular, any liability arising by virtue of the failure to fulfil an obligation within paragraph (a)), is a joint and several liability of the purchasers. These rules are subject to the following provisions. 3 If the transaction is a notifiable transaction, a single land transaction return is required. 4 The declaration required by paragraph 1(1)(c) of Schedule 10 ... (declaration that return ... is complete and correct) must be made by all the purchasers. 5 If the Inland Revenue give notice of an enquiry into the return ...— a the notice must be given to each of the purchasers, b the powers of the Inland Revenue as to the production of documents and provision of information for the purposes of the enquiry are exercisable separately (and differently) in relation to each of the purchasers, c any of the purchasers may apply for a direction that a closure notice be given (and all of them are entitled to to be parties to the application ), and d the closure notice must be given to each of the purchasers. 6 A Revenue determination or discovery assessment relating to the transaction must be made against all the purchasers and is not effective against any of them unless notice of it is given to each of them whose identity is known to the Inland Revenue. 7 In the case of an appeal arising from proceedings under this Part relating to the transaction— a the appeal may be brought by any of the purchasers, b notice of the appeal must be given to any of them by whom it is not brought, c the agreement of all the purchasers is required if the appeal is to be settled by agreement, d if it is not settled, and is notified to the tribunal, any of them are entitled to be parties to the appeal, and e the tribunal’s decision on the appeal binds all of them. 7A In a case where subsection (7) applies and some (but not all) of the purchasers require HMRC to undertake a review under paragraph 36B or 36C of Schedule 10— a notification of the review must be given by HMRC to each of the other purchasers whose identity is known to HMRC , b any of the other purchasers may be a party to the review if they notify HMRC in writing, c the notice of HMRC ’s conclusions must be given to each of the other purchasers whose identity is known to HMRC , d paragraph 36F of Schedule 10 (effect of conclusions of review) applies in relation to all of the purchasers, and e any of the purchasers may notify the appeal to the tribunal under paragraph 36G. 8 This section has effect subject to— the provisions of Schedule 15 relating to partnerships, and the provisions of Schedule 16 relating to trustees. Partnerships 104 1 Schedule 15 has effect with respect to the application of this Part in relation to partnerships. 2 In that Schedule— Part 1 defines “partnership” and contains other general provisions, and Part 2 deals with ordinary partnership transactions, and Part 3 makes special provision for certain transactions . Trustees 105 Schedule 16 has effect with respect to the application of this Part in relation to trustees. Persons acting in a representative capacity etc 106 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 The personal representatives of a person who is the purchaser under a land transaction— a are responsible for discharging the obligations of the purchaser under this Part in relation to the transaction, and b may deduct any payment made by them under this Part out of the assets and effects of the deceased person. 4 A receiver appointed by a court in the United Kingdom having the direction and control of any property is responsible for discharging any obligations under this Part in relation to a transaction affecting that property as if the property were not under the direction and control of the court. Crown application 107 1 This Part binds the Crown, subject to the following provisions of this section. 2 A land transaction under which the purchaser is any of the following is exempt from charge: Government A Minister of the Crown The Scottish Ministers A Northern Ireland department The Welsh Ministers, the First Minister for Wales and the Counsel General to the Welsh Government Parliament etc The Corporate Officer of the House of Lords The Corporate Officer of the House of Commons The Scottish Parliamentary Corporate Body The Northern Ireland Assembly Commission The National Assembly for Wales Commission 3 The powers conferred by Part 7 of Schedule 13 (entry with warrant to obtain information) are not exercisable in relation to premises occupied for the purposes of the Crown. 4 Nothing in this section shall be read as making the Crown liable to prosecution for an offence. Supplementary provisions Linked transactions 108 1 Transactions are “ linked ” for the purposes of this Part if they form part of a single scheme, arrangement or series of transactions between the same vendor and purchaser or, in either case, persons connected with them. Section 1122 of the Corporation Tax Act 2010 (connected persons) has effect for the purposes of this subsection 1A A transaction is not a linked transaction if — a the transaction relates to land in Scotland, or b the transaction relates to land in Wales (whether by virtue of section 48A(2) or otherwise) . 2 Where there are two or more linked transactions with the same effective date, the purchaser, or all of the purchasers if there is more than one, may make a single land transaction return as if all of those transactions that are notifiable were a single notifiable transaction. 3 Where two or more purchasers make a single return in respect of linked transactions, section 103 (joint purchasers) applies as if— a the transactions in question were a single transaction, and b those purchasers were purchasers acting jointly. 4 This section is subject to section 47(1). General power to vary this Part by regulations 109 1 The Treasury may if they consider it expedient in the public interest make provision by regulations for the variation of this Part in its application to land transactions of any description. 2 The power conferred by this section includes, in particular, power to alter— a the descriptions of land transaction that are chargeable or notifiable; b the descriptions of land transaction in respect of which tax is chargeable at any existing rate or amount , or in respect of which tax is calculated in accordance with any particular provision . 2A The power under subsection (2)(b) includes power to alter the conditions for the application to a chargeable transaction of paragraph 3 of Schedule 4A (higher rate for certain transactions), other than the condition that the transaction must be a high-value residential transaction. 3 The power conferred by this section does not, except as mentioned in subsections (2)(b) and (2A), include power to vary any threshold, rate or amount specified in— a section 55 (amount of tax chargeable: general), ... aa section 74(1A) (exercise of collective rights by tenants of flats), ab Schedule 4A (amount of tax chargeable: high-value interests in dwellings), or b Schedule 5 (amount of tax chargeable: rent). 4 This section has effect subject to section 110 (approval of regulations by House of Commons). 5 Regulations under this section do not apply in relation to any transaction of which the effective date is after the end of— a the period of 18 months beginning with the day on which the regulations were made, or b such shorter period as may be specified in the regulations. This does not affect the power to make further provision by regulations under this section to the same or similar effect. 6 Regulations under this section may include such supplementary, transitional and incidental provision as appears to the Treasury to be necessary or expedient. 7 The power conferred by this section may be exercised at any time after the passing of this Act. Approval of regulations under general power 110 1 An instrument containing regulations under section 109 (general power to vary this Part by regulations) must be laid before the House of Commons after being made. 2 If the regulations are not approved by the House of Commons before the end of the period of 28 days beginning with the day on which they are made, they shall cease to have effect at the end of that period (if they have not already ceased to have effect under subsection (3)). 3 If on any day during that period of 28 days the House of Commons, in proceedings on a motion that (or to the effect that) the regulations be approved, comes to a decision rejecting the regulations, they shall cease to have effect at the end of that day. 4 In reckoning any such period of 28 days take no account of any time during which— a Parliament is prorogued or dissolved, or b the House of Commons is adjourned for more than four days. 5 Where regulations cease to have effect under this section, their ceasing to have effect is without prejudice to anything done in reliance on them. As to claims for repayment, see section 111. 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 This section does not apply to regulations containing only provision varying Schedule 6ZA or paragraph 16 of Schedule 9 which does not increase any person's liability to tax. Claim for repayment if regulations under general power not approved 111 1 Where regulations cease to have effect under section 110, a claim may be made to the Inland Revenue for repayment of any tax, interest or penalty that would not have been payable but for the regulations . 2 Section 89 (interest on repayment of tax overpaid etc) applies to a repayment under this section. 3 A claim for repayment must be made within two years after the effective date of the transaction in question. 4 The Inland Revenue may make provision by regulations— a for varying the time limit for making a claim; b as to any other conditions that must be met before repayment is made. Power to amend certain provisions before implementation 112 1 The Treasury may by regulations amend the following provisions of this Part— a Schedule 5 (amount of tax chargeable: rent); b subsection (2) of section 55 (amount of tax chargeable: general) so far as relating to the thresholds at which different rates of tax become payable. 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 A statutory instrument containing regulations under this section shall not be made unless a draft of the instrument has been laid before and approved by resolution of the House of Commons. 4 The power conferred by this section is not exercisable after the implementation date. Functions conferred on “the Inland Revenue” 113 1 References in this Part to “ the Inland Revenue ” are to any officer of the Board, except as otherwise provided. 2 Any power of the Inland Revenue to make regulations is exercisable only by the Board. 3 In Schedule 10 (returns, assessments and other administrative matters)— a functions of the Inland Revenue under these provisions are exercisable by the Board or an officer of the Board— i paragraph 28 (discovery assessment), ii paragraph 29 (assessment to recover excessive repayment); b functions of the Inland Revenue under these provisions are functions of the Board— i paragraph 33 (relief in case of double assessment), ii . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3A The following functions of the Inland Revenue under Schedule 11A (claims not included in returns) are functions of the Board— a functions under paragraph 2(1) (form of claims), b functions relating to a claim made to the Board. 4 Nothing in this section affects any provision of this Part that expressly confers functions on the Board, an officer of the Board, a collector or a specific officer of the Board. Orders and regulations made by the Treasury or the Inland Revenue 114 1 Except as otherwise provided, any power of the Treasury or the Inland Revenue to make an order or regulations under this Part, or under any other enactments relating to stamp duty land tax (including enactments passed after this Act), is exercisable by statutory instrument. 2 Subsection (1) does not apply in relation to the power conferred by— paragraph 8 of Schedule 5 to this Act (tax chargeable in respect of rent: power to prescribe temporal discount rate), section 178(5) of the Finance Act 1989 (c. 26) (power to prescribe rates of interest). 3 Except as otherwise provided, a statutory instrument containing any order or regulations made by the Treasury or the Inland Revenue under this Part, or under any other enactments relating to stamp duty land tax (including enactments passed after this Act), shall be subject to annulment in pursuance of a resolution of the House of Commons. 4 Subsection (3) does not apply to a statutory instrument made under the power conferred by— section 61(3) (compliance with planning obligations: power to add to list of public authorities); paragraph 1(3) of Schedule 9 (right to buy transactions: power to add to list of relevant public sector bodies); paragraph 2(2) of Schedule 19 (commencement and transitional provisions: power to appoint implementation date). 5 The first set of regulations under section 58B (new zero-carbon homes) may not be made unless a draft has been laid before and approved by resolution of the House of Commons. 6 An order or regulations under this Part— a may make provision having effect generally or only in specified cases or circumstances, b may make different provision for different cases or circumstances, and c may include incidental, consequential or transitional provision or savings. General and Special Commissioners, appeals and other proceedings 115 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Interpretation etc Meaning of “residential property” 116 1 In this Part “ residential property ” means— a a building that is used or suitable for use as a dwelling, or is in the process of being constructed or adapted for such use, and b land that is or forms part of the garden or grounds of a building within paragraph (a) (including any building or structure on such land), or c an interest in or right over land that subsists for the benefit of a building within paragraph (a) or of land within paragraph (b); and “ non-residential property ” means any property that is not residential property. This is subject to the rule in subsection (7) in the case of a transaction involving six or more dwellings. 2 For the purposes of subsection (1) a building used for any of the following purposes is used as a dwelling— a residential accommodation for school pupils; b residential accommodation for students, other than accommodation falling with subsection (3)(b); c residential accommodation for members of the armed forces; d an institution that is the sole or main residence of at least 90% of its residents and does not fall within any of paragraphs (a) to (f) of subsection (3). 3 For the purposes of subsection (1) a building used for any of the following purposes is not used as a dwelling— a a home or other institution providing residential accommodation for children; b a hall of residence for students in further or higher education; c a home or other institution providing residential accommodation with personal care for persons in need of personal care by reason of old age, disablement, past or present dependence on alcohol or drugs or past or present mental disorder; d a hospital or hospice; e a prison or similar establishment; f a hotel or inn or similar establishment. 4 Where a building is used for a purpose specified in subsection (3), no account shall be taken for the purposes of subsection (1)(a) of its suitability for any other use. 5 Where a building that is not in use is suitable for use for at least one of the purposes specified in subsection (2) and at least one of those specified in subsection (3)— a if there is one such use for which it is most suitable, or if the uses for which it is most suitable are all specified in the same sub-paragraph, no account shall be taken for the purposes of subsection (1)(a) of its suitability for any other use, b otherwise, the building shall be treated for those purposes as suitable for use as a dwelling. 6 In this section “ building ” includes part of a building. 7 Where six or more separate dwellings are the subject of a single transaction involving the transfer of a major interest in, or the grant of a lease over, them, then, for the purposes of this Part as it applies in relation to that transaction, those dwellings are treated as not being residential property. 8 The Treasury may by order— a amend subsections (2) and (3) so as to change or clarify the cases where use of a building is, or is not to be, use of a building as a dwelling for the purposes of subsection (1); b amend or repeal subsection (7) and the reference to that subsection in subsection (1). Any such order may contain such incidental, supplementary, consequential or transitional provision as appears to the Treasury to be necessary or expedient. Meaning of “major interest” in land 117 1 References in this Part to a “ major interest ” in land shall be construed as follows. 2 In relation to land in England ... , the references are to— a an estate in fee simple absolute, or b a term of years absolute, whether subsisting at law or in equity. 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 In relation to land in Northern Ireland, the references are to— a any freehold estate, or b any leasehold estate, whether subsisting at law or in equity. Meaning of “market value” 118 1 For the purposes of this Part “ market value ” shall be determined as for the purposes of the Taxation of Chargeable Gains Act 1992 (c. 12) (see sections 272 to 274 of that Act). 2 This is subject to paragraphs 7(7) and 17(7) of Schedule 7A (which define “market value” for certain purposes of PAIF seeding relief and co-ownership scheme seeding relief). Meaning of “ effective date ” of a transaction 119 1 Except as otherwise provided, the effective date of a land transaction for the purposes of this Part is a the date of completion, or b such alternative date as the Commissioners for Her Majesty's Revenue and Customs may prescribe by regulations. 2 Other provision as to the effective date of certain descriptions of land transaction is made by— section 44(4) (contract and conveyance: contract substantially performed without having been completed), ... section 44A(3) (contract providing for conveyance to third party), section 45A(8) (contract providing for conveyance to third party: effect of transfer of rights), section 46(3) (options and rights of pre-emption). paragraph 5 of Schedule 2A, paragraph 3(4) of Schedule 17A (leases that continue after a fixed term), paragraph 12A(2) of Schedule 17A (agreement for lease followed by substantial performance), paragraph 12B(3) of that Schedule (assignment of agreement for lease occurring after agreement substantially performed), and ... Further provisions relating to leases 120 Schedule 17A contains further provisions relating to leases. Minor definitions 121 In this Part— . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . “ employee ” includes an office-holder and related expressions have a corresponding meaning; “ HMRC ” means Her Majesty’s Revenue and Customs; “ jointly entitled ” means— in England ... , beneficially entitled as joint tenants or tenants in common, . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . in Northern Ireland, beneficially entitled as joint tenants, tenants in common or coparceners; “ land ” includes— buildings and structures, and land covered by water; . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . “ statutory provision ” means any provision made by or under an Act of Parliament, an Act of the Scottish Parliament or any Northern Ireland legislation; . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . “ tax ”, unless the context otherwise requires, means tax under this Part. “ tribunal ” means the First-tier Tribunal or, where determined by or under Tribunal Procedure Rules, the Upper Tribunal. Index of defined expressions 122 In this Part the expressions listed below are defined or otherwise explained by the provisions indicated— acquisition relief Schedule 7, paragraph 8(1) . . . . . . bare trust Schedule 16, paragraph 1(2) the Board (in relation to the Inland Revenue) section 42(3) chargeable consideration section 50 and Schedule 4 chargeable interest section 48(1) chargeable transaction section 49 charities relief Schedule 8, paragraph 1(1) closure notice Schedule 10, paragraph 23(1) (in relation to a land transaction return); ... co-ownership scheme seeding relief Schedule 7A, paragraph 10(1) co-ownership authorised contractual scheme section 102A co-ownership contractual scheme section 102A company section 100 (except as otherwise expressly provided) . . . . . . contingent (in relation to consideration) section 51(3) delivery (in relation to a land transaction return) Schedule 10, paragraph 2(2) discovery assessment Schedule 10, paragraph 28(1) effective date (in relation to a land transaction) section 119 employee section 121 exempt interest section 48(2) to (5) filing date (in relation to a land transaction return) Schedule 10, paragraph 2(1) implementation date Schedule 19, paragraph 2(2) the Inland Revenue section 113 jointly entitled section 121 land section 121 land transaction section 43(1) land transaction return section 76(1) lease (and related expressions) Schedule 17A linked transactions section 108 main subject-matter (in relation to a land transaction) section 43(6) major interest (in relation to land) section 117 market value section 118 non-resident transaction Schedule 9A, paragraph 2 notice of enquiry Schedule 10, paragraph 12(1) (in relation to a land transaction return); ... notifiable (in relation to a land transaction) section 77 (see too sections 71A(7) and 72A(7)) and paragraph 30 of Schedule 15 operator (in relation to a co-ownership authorised contractual scheme) section 102A PAIF seeding relief Schedule 7A, paragraph 1(1) partnership (and related expressions) Schedule 15, paragraphs 1 to 4 purchaser section 43(4) . . . . . . reconstruction relief Schedule 7, paragraph 7(1) . . . . . . Reserved Investor Fund (Contractual Scheme) section 102A residential property section 116 Revenue certificate section 79(3)(a) Revenue determination Schedule 10, paragraph 25(1) self-assessment section 76(3)(a) . . . . . . settlement Schedule 16, paragraph 1(1) (except as otherwise expressly provided) . . . . . . statutory provision section 121 subject-matter (in relation to a land transaction) section 43(6) substantial performance (in relation to a contract) section 44(5) to (7) . . . . . . tax section 121 tribunal section 121 uncertain (in relation to consideration) section 51(3) unit holder section 101(4) unit trust scheme section 101(4) vendor section 43(4) (see too section 45A(9) and paragraphs 8, 10 and 11 of Schedule 2A ) Final provisions Consequential amendments 123 1 Schedule 18 contains certain amendments consequential on the provisions of this Part. 2 The Treasury may by regulations make such other amendments and repeals as appear to them appropriate in consequence of the provisions of this Part. 3 The regulations may, in particular, make such provision as the Treasury think fit for reproducing in relation to stamp duty land tax the effect of enactments providing for exemption from stamp duty. Commencement and transitional provisions 124 Schedule 19 makes provision for and in connection with the coming into force of the provisions of this Part. Part 5 Stamp duty Abolition of stamp duty except on instruments relating to stock or marketable securities 125 1 Stamp duty is chargeable under Schedule 13 of the Finance Act 1999 (c. 16) only on instruments relating to stock or marketable securities. 2 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) does not apply to property other than stock or marketable securities. 3 This section shall be construed as one with the Stamp Act 1891 (c. 39). 4 Part 1 of Schedule 20 to this Act contains provisions supplementing this section and Part 2 of that Schedule provides for consequential amendments and repeals. 5 This section and that Schedule have effect— a in relation to an instrument effecting a land transaction (or any duplicate or counterpart of such an instrument) , if the transaction— i is an SDLT transaction within the meaning of Schedule 19 to this Act (stamp duty land tax: commencement and transitional provisions), or ii would be such a transaction but for an exemption or relief from stamp duty land tax; b in relation to an instrument effecting a transaction other than a land transaction (or any duplicate or counterpart of such an instrument) , if the instrument is executed on or after the implementation date for the purposes of stamp duty land tax (see paragraph 2(2) of that Schedule). For this purpose an instrument effecting both a land transaction and a transaction other than a land transaction (or any duplicate or counterpart of such an instrument) is treated as if it were two instruments to which paragraph (a) and paragraph (b) above respectively applied. 6 Where in the case of an instrument effecting both a land transaction and a transaction other than a land transaction the result of applying subsection (5) is that stamp duty is chargeable on either or both of the deemed instruments, the enactments relating to stamp duty have effect as if— a there were two instruments as mentioned in the closing words of that subsection, b the consideration had been apportioned between them in a just and reasonable manner, and c the amount found on that apportionment to be attributable to the chargeable instrument, or (as the case may be) to each of them, had been set forth distinctly in that instrument. 7 In subsections (5) and (6) “ land transaction ” has the same meaning as in Part 4 of this Act. 8 This section and Schedule 20 have effect subject to paragraph 31 of Schedule 15 to this Act (continued application of stamp duty in relation to certain partnership transactions). Circumstances in which group relief withdrawn 126 1 Section 111 of the Finance Act 2002 (c. 23) (stamp duty: withdrawal of group relief) is amended as follows. 2 In subsection (1)(b) (circumstances in which relief withdrawn: transferee company ceasing to be member of group within two years) for “two years” substitute “ three years ” . 3 In subsection (1)(c) (circumstances in which relief withdrawn: transferee company holding estate or interest when it ceases to be member of group)— a in the opening words— i for “it ceases” substitute “ the transferee company ceases ” , and ii for “it holds” substitute “ it or a relevant associated company holds ” ; b in sub-paragraph (i) for “to it” substitute “ to the transferee company ” ; and c for the closing words substitute “ and that has not subsequently been transferred 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 ” . 4 In subsection (3)— a after “transferred” insert “ to the transferee company ” , and b for “what the transferee company holds at the time it ceases to be a member” substitute “ what is held by that company or, as the case may be, that company and any relevant associated companies, at the time it or they cease to be members ” . 5 After subsection (4) insert— 4A In this section “ relevant associated company ”, in relation to the transferee company, means a company that— a is a member of the same group as the transferee company immediately before that company ceases to be a member of the same group as the transferor company, and b ceases to be a member of the same group as the transferor company in consequence of the transferee company so ceasing. . 6 In paragraph 4(3) of Schedule 34 to the Finance Act 2002 (c. 23) (withdrawal of group relief: supplementary provisions), in paragraph (b)— a in the opening words— i for “it ceases” substitute “ the transferee company ceases ” , and ii for “it holds” substitute “ it or a relevant associated company (as defined in sub-paragraph (4) below) holds ” ; b in sub-paragraph (i) for “to it” substitute “ to the transferee company ” ; and c for the closing words substitute “ and that has not subsequently been transferred 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 ” . 7 In the closing words of that sub-paragraph, for the words from “as if” to the end substitute “ as if the transferee had then ceased to be a member of the same group as the transferor company and had then held the estate or interest referred to in paragraph (b). ” . 8 After that sub-paragraph insert— 4 In sub-paragraph (3)(b) “ relevant associated company ”, in relation to the transferee company, means a company that is in the same group as the transferee company immediately before the transferee company ceases to be a member of the new group and which ceases to be a member of the new group in consequence of the transferee company so ceasing. . 9 This section applies to instruments executed after 14th April 2003. 10 But this section does not apply to an instrument giving effect to a contract made on or before 9th April 2003, unless— a the instrument is made in consequence of the exercise after that date of any option, right of pre-emption or similar right, or b the instrument transfers the property in question to, or vests it in, a person other than the purchaser under the contract because of an assignment (or, in Scotland, assignation) or further contract made after that date. 11 This section shall be deemed to have come into force on 15th April 2003. Circumstances in which relief for company acquisitions withdrawn 127 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Exemption of certain leases granted by registered social landlords 128 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Relief for certain leases granted before section 128 has effect 129 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Registered social landlords: treatment of certain leases granted between 1st January 1990 and 27 March 2000 130 1 This section applies to a lease in relation to which the following conditions are met— a it is a lease of a dwelling to one or more individuals; b it is for an indefinite term or is terminable by notice of a month or less; c it was executed on or after 1st January 1990 and before 28th March 2000; d at the time it was executed the rate or average rate of the rent (whether reserved as a yearly rent or not) was £5,000 a year or less; and e the landlord’s interest has at any time before 26th June 2003 been held by a registered social landlord. 2 A lease to which this section applies (whether or not presented for stamping) shall be treated— a for the purposes of section 14 of the Stamp Act 1891 (c. 39) (production of instrument in evidence) as it applies in relation to proceedings begun after the day on which this Act is passed, and b for the purposes of section 17 of that Act (enrolment etc of instrument) as it applies to any act done after that day, as if it had been duly stamped in accordance with the law in force at the time when it was executed. 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 This section shall be construed as one with the Stamp Act 1891. 8 The reference in subsection (1) above to the landlord’s interest being held by a “ registered social landlord ” is to its being held by a body that— a is registered in a register maintained under— i Article 124 of the Housing (Northern Ireland) Order 1981 (S.I. 1981/156 (N.I. 3)), ii section 3(1) of the Housing Associations Act 1985 (c. 69), iii Article 14 of the Housing (Northern Ireland) Order 1992 (S.I. 1992/1725 (N.I. 15)), iv section 1(1) of the Housing Act 1996 (c. 52), or v section 57 of the Housing (Scotland) Act 2001 (asp 10), or b is a body corporate whose objects correspond to those of a housing association and which, pursuant to a contract with Scottish Homes, is registered in a register kept for the purposes by Scottish Homes. 9 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Part 6 Income tax and corporation tax: charge and rate bands Income tax Charge and rates for 2003-04 131 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Indexed rate bands for 2003-04: PAYE deductions etc 132 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Corporation tax Charge and main rate for financial year 2004 133 Corporation tax shall be charged for the financial year 2004 at the rate of 30%. Small companies' rate and fraction for financial year 2003 134 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Corporation tax starting rate and fraction for financial year 2003 135 For the financial year 2003— a the corporation tax starting rate shall be 0%, and b the fraction mentioned in section 13AA of the Taxes Act 1988 (marginal relief for small companies) shall be 19/400ths. Part 7 Income tax, corporation tax and capital gains tax: general Employment income and related matters Provision of services through intermediary 136 1 Chapter 8 of Part 2 of the Income Tax (Earnings and Pensions) Act 2003 (c. 1) (provision of services through an intermediary) is amended as follows. 2 In section 49(1)(a) (services to which the Chapter applies), for “for the purposes of a business carried on by another person” substitute “ for another person ” . 3 In consequence of the above amendment— a omit section 49(2) of that Act, and b in section 56(7) of that Act— i at the end of paragraph (a) insert “ , and ” , and ii omit paragraph (c) and the word “and” preceding it. 4 This section applies in relation to services performed or due to be performed on or after 10th April 2003. Exemption where homeworker’s additional expenses met by employer 137 1 In Part 4 of the Income Tax (Earnings and Pensions) Act 2003 (c. 1) (employment income: exemptions), after section 316 insert— Homeworker’s additional household expenses 316A 1 This section applies where an employer makes a payment to an employee in respect of reasonable additional household expenses which the employee incurs in carrying out duties of the employment at home under homeworking arrangements. 2 No liability to income tax arises in respect of the payment. 3 In this section, in relation to an employee— “ homeworking arrangements ” means arrangements between the employee and the employer under which the employee regularly performs some or all of the duties of the employment at home; and “ household expenses ” means expenses connected with the day to day running of the employee’s home. . 2 This section applies to payments which the employer makes on or after 6th April 2003 in respect of expenses which the employee incurs on or after that date. Taxable benefits: lower threshold for cars with a CO 2 emissions figure 138 1 In section 139 of the Income Tax (Earnings and Pensions) Act 2003 (cash equivalent of the benefit of a car: calculation of the appropriate percentage for a year for cars with a CO 2 emissions figure) the table in subsection (4) (which specifies the lower threshold for each year for the purposes of that calculation) is amended as follows. 2 In the entry relating to 2004-05 and subsequent tax years omit “and subsequent tax years”. 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 In section 170(3) of that Act (power to provide by order for a lower threshold different from that specified in the table in section 139(4) to apply for tax years beginning on or after 6th April 2005) for “6th April 2005” substitute “ 6th April 2006 ” . Approved share plans and schemes 139 Schedule 21 to this Act (which contains amendments relating to share incentive plans, SAYE option schemes and CSOP schemes) has effect. Employee securities and options 140 Schedule 22 to this Act (which makes provision about securities, and options to acquire securities, acquired by reason of employment) has effect. Corporation tax relief for employee share acquisitions 141 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Ending of relief for contributions to QUESTS 142 1 Section 67 of the Finance Act 1989 (c. 26) (tax relief for contributions to trustees of qualifying employee share ownership trust) does not apply in relation to sums expended by a company in an accounting period of the company beginning on or after 1st January 2003. 2 In section 69 of that Act (chargeable events)— a the definitions in subsections (3AC) and (3AD) (by virtue of which certain transfers of shares by trustees of an employee share ownership trust to a SIP trust are not chargeable events) have effect in relation to 26th November 2002 as they had effect in relation to 20th March 2000; b in relation to shares that are relevant shares by virtue of paragraph (a) above, subsection (3AB) (deemed order of disposal of shares) has effect as if the reference there to 21st March 2000 were to 27th November 2002; and c the other provisions of that section have effect accordingly. 3 In consequence of subsection (2), in paragraph 78(2)(b) of Schedule 2 to the Income Tax (Earnings and Pensions) Act 2003 (c. 1) (reference to section 69(3AA) of the Finance Act 1989) after “21st March 2000” insert “ or, by virtue of section 142(2) of the Finance Act 2003, 27th November 2002 ” . Restriction of deductions for employee benefit contributions 143 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . PAYE on notional payments: reimbursement period 144 1 In section 222(1)(c) of the Income Tax (Earnings and Pensions) Act 2003 (period within which employee must reimburse employer for amount to be accounted for to Inland Revenue in respect of income tax on notional payment), for “30 days” substitute “ 90 days ” . 2 This section has effect in relation to payments of income treated as made on or after 9th April 2003. PAYE: regulations and notional payments 145 1 In the list in subsection (2) of section 684 of the Income Tax (Earnings and Pensions) Act 2003 (c. 1) (PAYE regulations)— a for item 2 substitute— 1A Provision— a for deductions to be made, if and to the extent that the payee does not object, with a view to securing that income tax payable in respect of any income of a payee for a tax year which is not PAYE income is deducted from PAYE income of the payee paid during that year; and b as to the circumstances and manner in which a payee may object to the making of deductions. 2 Provision— a for repayments or deductions to be made, if and to the extent that the payee does not object, in respect of any amounts overpaid or remaining unpaid (or treated as overpaid or remaining unpaid) on account of— i income tax in respect of income for a previous tax year, or ii capital gains tax in respect of chargeable gains for such a year; and b as to the circumstances in which repayments or deductions may be made, and the circumstances and manner in which a payee may object to the making of repayments or deductions. ; b after item 4 insert — 4A Provision authorising the recovery from the payee rather than the payer of any amount that the Inland Revenue considers should have been deducted by the payer. ; c for item 8 substitute as items 7A and 8— 7A Provision for excluding payments of such description as may be specified from the operation of the regulations in such circumstances as may be specified. 8 Provision for the making of decisions by the Board or the Inland Revenue as to any matter required to be decided for the purposes of the regulations and for appeals against such decisions. . 2 After subsection (7) of that section insert— 7A Nothing in PAYE regulations may be read— a as preventing the making of arrangements for the collection of tax in such manner as may be agreed by, or on behalf of, the payer and the Inland Revenue, or b as requiring the payer to comply with the regulations in circumstances in which the Inland Revenue is satisfied that it is unnecessary or not appropriate for the payer to do so. 7B References in this section and section 685 to income tax in respect of PAYE income are references to income tax in respect of that income if reasonable assumptions are (when necessary) made about other income. 7C In this section and section 685— “ payer ” means any person paying PAYE income and “ payee ” means any person in receipt of such income; “ specified ” means specified in PAYE regulations. . 3 In subsection (2) of section 685 of that Act (tax tables), for paragraph (b) substitute— b subject to an adjustment in respect of amounts required to be deducted or repaid by PAYE regulations made under item 1A or 2 in the list in section 684(2). . 4 After subsection (3) of that section insert— 4 PAYE regulations may make provision, where it appears to the Inland Revenue that it is impracticable for a payer to deduct tax by reference to tax tables— a for deductions to be made by the payer in accordance with other arrangements agreed as mentioned in section 684(7A)(a), or b for the payee to be required to keep records and make payments and returns as if he were the payer. . 5 In section 707 of that Act (interpretation of Chapter 5 of Part 11), in the definition of “employment”, for “this section” substitute “ this Chapter ” . 6 In section 710 of that Act (notional payments: accounting for tax)— a in subsections (1) and (4), after “must” insert “ , subject to and in accordance with PAYE regulations, ” ; b in subsection (5)(b) and (c), for “accounted for” substitute “ deducted or accounted for (or required to be deducted or accounted for) ” ; and c in subsection (6), for “an amount which” substitute “ an amount of tax which ” and for “is paid by the employee” substitute “ is deducted ” . 7 Substitute “ PAYE regulations ” a for “the said section 203” in subsection (8) of section 59A of the Taxes Management Act 1970 (c. 9) (payments on account of income tax); and b for “that section” in subsection (10) of that section and subsections (2) and (8) of section 59B of that Act (payments of income tax and capital gains tax). Payroll giving: extension of 10% supplement to 5th April 2004 146 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Sub-contractor deductions etc: interest on late payment or repayment 147 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 In the Social Security Contributions and Benefits Act 1992 (c. 4) and the Social Security Contributions and Benefits (Northern Ireland) Act 1992 (c. 7), in paragraph 6 of Schedule 1 (power to combine collection of national insurance contributions with tax) after sub-paragraph (4A) insert— 4B Interest required to be paid, by virtue of sub-paragraph (2)(a) or (b) above, by regulations under sub-paragraph (1) above shall be paid without any deduction of income tax and shall not be taken into account in computing any income, profits or losses for any tax purposes. . 3 In section 22 of the Teaching and Higher Education Act 1998 (c. 30) (student loans), after subsection (9) insert— 10 Interest required to be paid, by virtue of subsection (5)(d), by regulations under this section shall be paid without any deduction of income tax and shall not be taken into account in computing any income, profits or losses for any tax purposes. . 4 In Article 3 of the Education (Student Support) (Northern Ireland) Order 1998 (S.I. 1998/1760 (N.I. 14)) (student loans), after paragraph (9) insert— 10 Interest required to be paid, by virtue of paragraph (5)(d), by regulations under this Article shall be paid without any deduction of income tax and shall not be taken into account in computing any income, profits or losses for any tax purposes. . 5 In its application to the computation of income, profits or losses for an accounting period (in the case of a company) or a year of assessment (in the case of a person who is not a company), this section has effect in relation to— a accounting periods ending on or after 9th April 2003, or b 2003-04 and subsequent years of assessment. Taxation of non-resident companies and related matters Meaning of “ permanent establishment ” 148 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Non-resident companies: basis of charge to corporation tax 149 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 After section 10A of the Taxation of Chargeable Gains Act 1992 (c. 12) insert— Non-resident company with United Kingdom permanent establishment 10B 1 Subject to any exceptions provided by this Act, the chargeable profits for the purposes of corporation tax of a company not resident in the United Kingdom but carrying on a trade in the United Kingdom through a permanent establishment there include chargeable gains accruing to the company on the disposal of— a assets situated in the United Kingdom and used in or for the purposes of the trade at or before the time the gain accrued, or b assets situated in the United Kingdom and used or held for the purposes of the permanent establishment at or before the time the gain accrued or acquired for use by or for the purposes of the permanent establishment. 2 Subsection (1) does not apply unless the disposal is made at a time when the company is carrying on a trade in the United Kingdom through a permanent establishment there. 3 This section does not apply to a company that, by virtue of Part 18 of the Taxes Act (double taxation relief arrangements), is exempt from corporation tax for the chargeable period in respect of the profits of the permanent establishment. 4 In this section “ trade ” has the meaning given by section 6(4)(b) of the Taxes Act. . 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 This section has effect in relation to accounting periods (of the non-resident company) beginning on or after 1st January 2003, and regulations under section 11AA(5) of the Taxes Act 1988 (inserted by subsection (2) above) may be made so as to have effect from that date. Non-resident companies: assessment, collection and recovery of corporation tax 150 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Non-resident companies: extent of charge to income tax 151 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Non-resident companies: transactions carried out through broker, investment manager or Lloyd’s agent 152 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . General replacement of references to branch or agency of company 153 1 In the following provisions (which relate only to companies) for “branch or agency” or “branches or agencies”, wherever occurring, substitute “ permanent establishment ” or “ permanent establishments ” . The provisions are— a in the Taxes Act 1988, sections ..., ... ... 442(1), ... ..., 748A(1)(c) and (2), ...; in Schedule 15, paragraphs 17(3)(c) and 25(2)(c); ... in Schedule 24, paragraphs 1 and 8; and in Schedule 25, paragraphs 6(2A) and (2C), 8 and 11(3); b in the Taxation of Chargeable Gains Act 1992 (c. 12), sections 140(1), 140C(1)(a), 173(3)(b), 175(1A)(b), 185(4) and 213(5A); c . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . d in the Capital Allowances Act 2001 (c. 2), sections 560(2) and 561(1)(c); e . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 In the following provisions (which relate to companies and other persons), any reference to a branch or agency shall be read, in relation to a company, as a reference to a permanent establishment. The provisions are— a in the Taxes Act 1988, sections ... ... 806K(1) ... ... ...; b in the Taxation of Chargeable Gains Act 1992, sections 25(2), (3) and (5), 80(4)(a) and (b) and (7)(b), 199(2) and (4) and 276(7); c in the Finance Act 1999 (c. 16), section 85(2)(a); d . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 Any reference to a branch or agency— a in subordinate legislation made under an enactment contained in the Tax Acts or relating to chargeable gains, or b that is to be construed as having the same meaning as in any such enactment, shall be read, in relation to a company, as a reference to a permanent establishment. “ Subordinate legislation ” here has the same meaning as in the Interpretation Act 1978 (c. 30). 4 This section has effect in relation to accounting periods beginning on or after 1st January 2003. Double taxation relief: profits attributable to overseas permanent establishment 154 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Consequential amendments 155 1 Schedule 27 to this Act provides for amendments consequential on the provisions of sections 148 to 153. 2 The amendments made by that Schedule have effect in relation to accounting periods beginning on or after 1st January 2003. Overseas life insurance companies 156 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Chargeable gains Life insurance policies and deferred annuity contracts 157 1 For section 210 of the Taxation of Chargeable Gains Act 1992 (c. 12) substitute— Life insurance and deferred annuities 210 1 This section has effect in relation to any policy of insurance or contract for a deferred annuity on the life of any person. 2 A gain accruing on a disposal of, or of an interest in, the rights conferred by the policy of insurance or contract for a deferred annuity is not a chargeable gain unless subsection (3) below applies. 3 This subsection applies if— a (in the case of a disposal of the rights) the rights or any interest in the rights, or b (in the case of a disposal of an interest in the rights) the rights, the interest or any interest from which the interest directly or indirectly derives (in whole or in part), have or has at any time been acquired by any person for actual consideration (as opposed to consideration deemed to be given by any enactment relating to the taxation of chargeable gains). 4 For the purposes of subsection (3) above — a (in the case of a policy of insurance) amounts paid under the policy by way of premiums, and b (in the case of a contract for a deferred annuity) amounts paid under the contract, whether by way of premiums or as lump sum consideration, do not constitute actual consideration. 5 And for those purposes actual consideration for— a a disposal which is made by one spouse to the other or is an approved post-marriage disposal, or b a disposal to which section 171(1) applies, is to be treated as not constituting actual consideration. 6 For the purposes of subsection (5)(a) above a disposal is an approved post-marriage disposal if— a it is made in consequence of the dissolution or annulment of a marriage by one person who was a party to the marriage to the other, b it is made with the approval, agreement or authority of a court (or other person or body) having jurisdiction under the law of any country or territory or pursuant to an order of such a court (or other person or body), and c the rights disposed of were, or the interest disposed of was, held by the person by whom the disposal is made immediately before the marriage was dissolved or annulled. 7 Subsection (8) below applies for the purposes of tax on chargeable gains where— a (if that subsection did not apply) a loss would accrue on a disposal of, or of an interest in, the rights conferred by the policy of insurance or contract for a deferred annuity, but b if sections 37 and 39 were disregarded, there would accrue on the disposal a loss of a smaller amount, a gain or neither a loss nor a gain. 8 If (disregarding those sections) a loss of a smaller amount would accrue, that smaller amount is to be taken to be the amount of the loss accruing on the disposal; and in any other case, neither a loss nor a gain is to be taken to accrue on the disposal. 9 But subsection (8) above does not affect the treatment for the purposes of tax on chargeable gains of the person who acquired rights, or an interest in rights, on the disposal. 10 The occasion of— a the receipt of the sum or sums assured by the policy of insurance, b the transfer of investments or other assets to the owner of the policy of insurance in accordance with the policy, or c the surrender of the policy of insurance, is for the purposes of tax on chargeable gains an occasion of a disposal of the rights (or of all of the interests in the rights) conferred by the policy of insurance. 11 The occasion of— a the receipt of the first instalment of the annuity under the contract for a deferred annuity, or b the surrender of the rights conferred by the contract for a deferred annuity, is for the purposes of tax on chargeable gains an occasion of a disposal of the rights (or of all of the interests in the rights) conferred by the contract for a deferred annuity. 12 Where there is a disposal on the occasion of the receipt of the first instalment of the annuity under the contract for a deferred annuity— a in the case of a disposal of the rights conferred by the contract, the consideration for the disposal is the aggregate of the amount or value of the first instalment and the market value at the time of the disposal of the right to receive the further instalments of the annuity, and b in the case of a disposal of an interest in the rights, the consideration for the disposal is such proportion of that aggregate as is just and reasonable; and no gain accruing on any subsequent disposal of, or of any interest in, the rights is a chargeable gain (even if subsection (3) above applies). 13 In this section “ interest ”, in relation to rights conferred by a policy of insurance or contract for a deferred annuity, means an interest as a co-owner of the rights (whether the rights are owned jointly or in common and whether or not the interests of the co-owners are equal). . 2 This section has effect in relation to disposals on or after 9th April 2003. Application of market value rule in case of exercise of option 158 1 In Chapter 3 of Part 4 of the Taxation of Chargeable Gains Act 1992 (c. 12) (miscellaneous provisions relating to options and other matters), after section 144 insert— Application of market value rule in case of exercise of option 144ZA 1 This section applies where— a an option is exercised, so that by virtue of section 144(2) or (3) the grant or acquisition of the option and the transaction resulting from its exercise are treated as a single transaction, and b section 17(1) (“the market value rule”) applies, or would apply but for this section, in relation to— i the grant of the option, ii the acquisition of the option (whether directly from the grantor or not) by the person exercising it, or iii the transaction resulting from its exercise. 2 If the option binds the grantor to sell— a the market value rule does not apply for determining the consideration for the sale, except, where the rule applies for determining the consideration for the option, to that extent (in accordance with section 144(2)(a)); b the market value rule does not apply for determining the cost to the person exercising the option of acquiring what is sold, except, where the rule applies for determining the cost of acquiring the option, to that extent (in accordance with section 144(3)(a)). 3 If the option binds the grantor to buy— a the market value rule does not apply for determining the cost of acquisition incurred by the grantor, but without prejudice to its application (in accordance with section 144(2)(b)) where the rule applies for determining the consideration for the option; b the market value rule does not apply for determining the consideration for the disposal of what is bought, but without prejudice to its application (in accordance with section 144(3)(b)) where the rule applies for determining the cost of the option. 4 To the extent that, by virtue of this section, the market value rule does not apply for determining an amount or value, the amount or value to be taken into account is (subject to section 120) the actual amount or value. 5 In this section “ option ” has the same meaning as in section 144. . 2 This section applies in relation to the exercise of an option on or after 10th April 2003. Reporting limits and annual exempt amount 159 1 The Taxation of Chargeable Gains Act 1992 (c. 12) is amended in accordance with Schedule 28 to this Act. 2 In that Schedule— Part 1 makes provision as to the cases in which a return of information about chargeable gains is required, Part 2 contains minor and consequential amendments of the provisions relating to the annual exempt amount, and Part 3 provides for commencement. Taper relief: assets qualifying as business assets 160 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Earn-out rights to be treated as securities unless contrary election 161 1 Section 138A of the Taxation of Chargeable Gains Act 1992 (c. 12) (use of earn-out rights for exchange of securities) is amended as follows. 2 In subsection (2) (seller’s right to elect for earn-out right to be treated as security of new company)— a at the end of paragraph (a) insert “ and ” ; and b omit paragraph (c) (the seller’s right of election) and the word “and” immediately preceding it. 3 After subsection (2) insert— 2A Subsection (2) above does not have effect if the seller elects under this section for the earn-out right not to be treated as a security of the new company. . 4 In subsection (4) (election for corresponding treatment where old right extinguished in consideration of new right)— a at the end of paragraph (c) insert “ and ” ; b omit paragraph (e) (right of election of person on whom the new right is conferred) and the word “and” immediately preceding it; and c in the closing words, for “that person” substitute “ the person on whom the new right is conferred ” . 5 After subsection (4) insert— 4A Subsection (4) above does not have effect if the person on whom the new right is conferred elects under this section for it not to be treated as a security of the new company. . 6 The amendments made by this section have effect in relation to rights conferred on or after 10th April 2003. Deferred unascertainable consideration: election for treatment of loss 162 1 After section 279 of the Taxation of Chargeable Gains Act 1992 insert— Deferred unascertainable consideration: election for treatment of loss 279A 1 Where— a a person (“ the taxpayer ”) makes a disposal of a right to which this section applies (see subsection (2) below), b on that disposal an allowable loss (“ the relevant loss ”) would, apart from section 279C, accrue to him in any year (“ the year of the loss ”), and c the year of the loss is a year in which the taxpayer is within the charge to capital gains tax (see section 279B(1)), the taxpayer may make an election under this section for the relevant loss to be treated as accruing in an earlier year in accordance with section 279C if condition 1 in subsection (3) below and condition 2 in subsection (5) below are satisfied. 2 This section applies to a right if each of the following conditions is satisfied— a the right was, in whole or in part, acquired by the taxpayer as the whole or part of the consideration for a disposal (the “ original disposal ”) by him of another asset (the “ original asset ”), b the original disposal was made in a year (“ the year of the original disposal ”) earlier than the year in which the disposal mentioned in subsection (1)(a) above is made (“ the year of the right’s disposal ”), c where the right was acquired by the taxpayer as the whole or part of the consideration for two or more disposals (each of which is accordingly an “ original disposal ”), the condition in paragraph (b) above is satisfied with respect to each of those disposals (the “ original disposals ”), d on the taxpayer’s acquisition of the right, there was no corresponding disposal of it, e the right is a right to unascertainable consideration (see section 279B(2) to (6)). 3 Condition 1 for making an election in relation to the relevant loss is that a chargeable gain accrued to the taxpayer on any one or more of the following events— a the original disposal, b an earlier disposal of the original asset by the taxpayer in the year of the original disposal, c a later disposal of the original asset by the taxpayer in a year earlier than the year of the right’s disposal, or would have so accrued but for paragraph 2(2)(a) of Schedule 5B or 5C (postponement of original gain). This subsection is subject to subsection (4) below. 4 If the right to which this section applies was acquired by the taxpayer as the whole or part of the consideration for two or more original disposals (including cases where there are two or more original assets (the “ original assets ”))— a any reference in subsection (3) above to the original disposal is a reference to any of the original disposals, b any reference in that subsection to the original asset is a reference to the asset which is the original asset in relation to that original disposal, and c any reference in that subsection to the year of the original disposal shall be construed accordingly. 5 Condition 2 for making an election in relation to the relevant loss is that there is a year (an “ eligible year ”)— a which is earlier than the year of the loss but not earlier than the year 1992-93, b in which a chargeable gain falling within subsection (3) above or subsection (6) below accrued to the taxpayer, and c for which, immediately before the election, there remains a relevant amount on which capital gains tax is chargeable (see subsection (7) below). 6 A chargeable gain falling within this subsection accrues to the taxpayer in a year if— a in that year a chargeable gain (the “ revived gain ”) is treated as accruing to the taxpayer in accordance with paragraphs 4 and 5 of Schedule 5B or 5C (chargeable gain accruing to person on chargeable event), and b the gain which, in determining the amount of the revived gain in accordance with those paragraphs, is the original gain consists of or represents the whole or some part of a gain that would have accrued as mentioned in subsection (3) above but for paragraph 2(2)(a) of Schedule 5B or 5C. 7 For the purposes of subsection (5)(c) above, a year is one for which, immediately before an election, there remains a relevant amount on which capital gains tax is chargeable if, immediately before the making of that election, there remains an amount in respect of which the taxpayer is chargeable to capital gains tax for the year— a after taking account of any previous elections made by the taxpayer under this section, b after excluding any amounts that fall to be brought into account for that year under section 2(4)(b) by virtue of section 2(5)(b), and c on the assumption that no part of the relevant loss (or of any other loss in respect of which an election under this section may be, but has not been, made) falls to be deducted in consequence of an election under this section from the chargeable gains accruing to the taxpayer in that year. 8 In this section “ year ” means year of assessment. 9 This section and sections 279B to 279D are to be construed as one. Provisions supplementary to section 279A 279B 1 For the purposes of section 279A(1)(c) a person is within the charge to capital gains tax in any year if— a he is chargeable to capital gains tax in respect of chargeable gains accruing to him in that year, or b on the assumption that there accrue to him in that year any chargeable gains (excluding amounts in relation to which section 2(4)(a) applies), he would be so chargeable apart from— i any deductions that fall to be made from the total amount referred to in section 2(2), and ii section 3 (annual exempt amount). 2 Subsections (3) to (6) below have effect for the purposes of section 279A(2)(e) (right to unascertainable consideration). 3 A right is a right to unascertainable consideration if, and only if,— a it is a right to consideration the amount or value of which is unascertainable at the time when the right is conferred, and b that amount or value is unascertainable at that time on account of its being referable, in whole or in part, to matters which are uncertain at that time because they have not yet occurred. This subsection is subject to subsections (4) to (6) below. 4 The amount or value of any consideration is not to be regarded as being unascertainable by reason only— a that the right to receive the whole or any part of the consideration is postponed or contingent, if the consideration or, as the case may be, that part of it is, in accordance with section 48, brought into account in the computation of the gain accruing to the taxpayer on the disposal of an asset, or b in a case where the right to receive the whole or any part of the consideration is postponed and is to be, or may be, to any extent satisfied by the receipt of property of one description or property of some other description, that some person has a right to select the property, or the description of property, that is to be received. 5 A right is not to be taken to be a right to unascertainable consideration by reason only that either the amount or the value of the consideration has not been fixed, if— a the amount will be fixed by reference to the value, and the value is ascertainable, or b the value will be fixed by reference to the amount, and the amount is ascertainable. 6 A right which is by virtue of subsection (2) or (4) of section 138A (use of earn-out rights for exchange of securities) assumed in accordance with subsection (3)(a) of that section to be a security, within the definition in section 132, is not to be regarded as a right to unascertainable consideration. 7 For the purposes of section 279A, any question as to— a whether a chargeable gain or a loss is one that accrues (or would, apart from any particular provision, accrue) on a particular disposal or a disposal of any particular description, or b the time at which, or year in which, any particular disposal takes place, is to be determined without regard to section 10A(2) (chargeable gains and losses accruing during temporary non-residence to be treated as accruing in year of return). This subsection is subject to subsection (8) below. 8 Subsection (7) above does not affect the determination of any question— a as to the year in which the chargeable gain or loss is, by virtue of section 10A(2), to be treated as accruing (apart from section 279C), or b where (apart from section 279C) a loss is to be treated by virtue of section 10A(2) as accruing in a particular year, whether the loss is an allowable loss. Effect of election under section 279A 279C 1 This section applies where an election is made under section 279A by the taxpayer for the relevant loss to be treated as accruing in an earlier year in accordance with this section. 2 Where this section applies, the relevant loss shall be treated for the purposes of capital gains tax as if it were a loss accruing to the taxpayer in the earliest year which is an eligible year (the “ first eligible year ”), instead of in the year of the loss (but subject to, and in accordance with, the following provisions of this section). 3 The amount of the relevant loss that falls to be deducted from chargeable gains of the first eligible year in accordance with section 2(2)(a) is limited to the amount (the “ first year limit ”) found by taking the following steps— Step 1: take the total amount of chargeable gains accruing to the taxpayer in the first eligible year, Step 2: exclude from that amount any amounts that fall to be disregarded in accordance with section 2(4)(a) for that year, Step 3: deduct from the amount remaining any amounts in respect of allowable losses (other than the relevant loss or any part of it) that fall to be deducted from that amount in accordance with section 2(2) otherwise than by virtue of section 2(5)(aa)(i) (taking account of any previous elections under section 279A). The amount so found is the first year limit, unless the first eligible year is a year in relation to which section 2(5)(aa) has effect, in which case the further steps in subsection (4) below must also be taken. 4 Those further steps are— Step 4: add to the amount found by taking steps 1 to 3 in subsection (3) above every amount which is treated by virtue of section 77 or 86 as an amount of chargeable gains accruing to the taxpayer for the first eligible year (the “ attributed amounts ”), Step 5: deduct from the resulting amount any amounts (other than the relevant loss or any part of it) that fall to be deducted from the attributed amounts in accordance with section 2(5)(aa)(i) (taking account of any previous elections under section 279A). The amount so found is the first year limit in a case where section 2(5)(aa) applies in relation to the first eligible year. 5 As respects any later year before the year of the loss, the relevant loss (so far as not previously allowed as a deduction from chargeable gains accruing in any previous year) falls to be deducted in accordance with section 2(2)(b) only if that later year is an eligible year. 6 The amount of the relevant loss that falls to be deducted from chargeable gains of that later eligible year in accordance with section 2(2)(b) is limited to the amount (the “ later year limit ”) in respect of which the taxpayer would be chargeable to capital gains tax for that later year— a on the assumption in subsection (7) below, b taking account of any previous elections under section 279A, and c apart from the provisions specified in subsection (8) below. 7 The assumption is that no part of— a the relevant loss, or b any loss in respect of which an election under section 279A may be, but has not been, made, falls to be deducted, in consequence of an election under section 279A, from any chargeable gains accruing to the taxpayer in that later eligible year. The assumption falls to be made immediately after the making of the election in respect of the relevant loss. 8 The provisions are— a section 2(5)(a)(ii) (taper relief), b section 2(5)(aa)(ii) (taper relief), c section 2(5)(b) (addition of certain amounts treated as amounts of chargeable gains), and d section 2A (taper relief), except that paragraphs (b) and (d) above are not to affect the operation of section 2(7) for the purposes of subsection (6) above. 9 All such adjustments shall be made, whether by discharge or repayment of tax, the making of assessments or otherwise, as are required to give effect to the election under section 279A made by the taxpayer for the relevant loss to be treated as accruing in an earlier year in accordance with this section. 10 Any reference in this section or section 279D to deduction in accordance with section 2(2)(a), section 2(2)(b) or section 2(2) includes a reference to such deduction by virtue of section 2(5)(a)(i) or (aa)(i). Elections under section 279A 279D 1 An election under section 279A is irrevocable. 2 Any election under that section must be made by giving a notice in accordance with this section. 3 The notice must be given to an officer of the Board. 4 Subsections (5) to (8) below have effect in relation to the notice given by the taxpayer in respect of the relevant loss. 5 The notice must specify each of the following— a the amount of the relevant loss; b the right disposed of; c the year of the right’s disposal; d the year of the loss (if different from the year of the right’s disposal); e the year in which the right was acquired; f the original asset or assets. 6 The notice must also specify each of the following— a the eligible year in which the relevant loss is to be treated in accordance with section 279C(2) as accruing to the taxpayer; b the first year limit (see section 279C(3) and (4)); c how much of the relevant loss falls to be deducted in accordance with section 2(2)(a) from chargeable gains accruing to the taxpayer in that year. 7 If, in accordance with section 279C, any part of the relevant loss falls to be deducted in accordance with section 2(2)(b) from chargeable gains accruing to the taxpayer in any later eligible year, the notice must also specify— a each such year; b in the case of each such year, the later year limit (see section 279C(6)); c how much of the relevant loss falls to be deducted in accordance with section 2(2)(b) in each such year from chargeable gains accruing to the taxpayer in that year. 8 The notice must be given on or before the first anniversary of the 31st January next following the year of the loss. 9 An election under section 279A is made on the date on which the notice of the election is given. 10 Different notices must be given in respect of different losses. 11 Where a person makes two or more elections under section 279A on the same day, the notices must specify the order in which the elections are made. 12 For the purposes of any provisions of sections 279A to 279C whose operation is affected by the order in which any elections under section 279A are made, elections made by a person on the same day shall be treated as made at different times and in the order specified in accordance with subsection (11) above. . 2 Where— a on the disposal of a right to which section 279A of the Taxation of Chargeable Gains Act 1992 (c. 12) applies, an allowable loss would, apart from section 279C of that Act, accrue to a person in any year of assessment, b an election is made under section 279A of that Act for the loss to be treated as accruing in an earlier year in accordance with section 279C, and c the right is an earn-out right, within the meaning of section 138A of that Act, which was conferred before 10th April 2003, no election may be made under section 138A of that Act (election for earn-out right to be treated as security etc) in respect of the right, whether at the same time as the election under section 279A or subsequently. 3 The amendment made by subsection (1) has effect in relation to allowable losses that would, apart from that amendment, accrue on or after 10th April 2003. For this purpose, losses that would, apart from that amendment, be treated by virtue of section 10A of the Taxation of Chargeable Gains Act 1992 as accruing in the year 2003-04 shall be treated as so accruing on or after 10th April 2003. 4 Subsection (2) shall be deemed to have come into force on 10th April 2003. Transfers of value: attribution of gains to beneficiaries 163 1 For section 85A of the Taxation of Chargeable Gains Act 1992 (c. 12) substitute— Transfers of value: attribution of gains to beneficiaries and treatment of losses 85A 1 Schedule 4C to this Act has effect with respect to the attribution of gains to beneficiaries where there has been a transfer of value to which Schedule 4B applies. 2 Sections 86A to 95 have effect subject to the provisions of Schedule 4C. 3 No account shall be taken of any chargeable gains or allowable losses accruing by virtue of Schedule 4B in computing the trust gains for a year of assessment in accordance with sections 87 to 89, except in computing for the purposes of paragraph 7A(2) of Schedule 4C the amount on which the trustees would have been chargeable to tax under section 2(2) if they had been resident or ordinarily resident in the United Kingdom. 4 No account shall be taken of any chargeable gains or allowable losses to which sections 87 to 89 apply in computing the gains or losses accruing by virtue of Schedule 4B. . 2 Schedule 4C to that Act (transfers of value: attribution of gains to beneficiaries) is amended in accordance with Schedule 29 to this Act. 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 The following provisions have effect with respect to the coming into force of the amendments made by this section and Schedule 29— a the amendments apply where the trustees of a settlement have made a transfer to which Schedule 4B applies at any time on or after 21st March 2000; b where there has been a transfer of value to which Schedule 4B applies before 9th April 2003, the transferor settlement shall be treated as having a Schedule 4C pool as from that date containing such Schedule 4C gains as would fall to be included in the pool if— i a year of assessment had ended with 8th April 2003, and ii the reference in paragraph 1(2)(b) of Schedule 4C as amended to the end of the year of assessment in which the transfer of value was made were to that date; c where a transferor settlement ceased to exist on or after 21st March 2000 and before 9th April 2003, Schedule 4C as amended applies as if it had ceased to exist on 8th April 2003 (so that paragraph (b) above applies); d so much of Schedule 4C as amended as provides— i that gains treated as accruing to beneficiaries who are not chargeable to tax are treated as outstanding section 87/89 gains, or ii that gains in a settlement’s Schedule 4C pool are not to be treated as accruing to such beneficiaries, applies only in relation to capital payments made on or after 9th April 2003; e gains included in a settlement’s Schedule 4C pool by virtue of paragraph 1(2)(b) of that Schedule as amended shall only be attributed in accordance with the provisions of that Schedule to beneficiaries who receive capital payments on or after 9th April 2003. 5 Paragraph 8A(3) and (4) of Schedule 4C, inserted by paragraph 4 of Schedule 29 to this Act, applies only where the transfer referred to in that provision occurs on or after 9th April 2003. 6 Expressions used in subsection (4) that are defined for the purposes of Schedule 4C to the Taxation of Chargeable Gains Act 1992 (c. 12) as amended by Schedule 29 to this Act have the same meaning as in that Schedule. Capital allowances and related matters Avoidance affecting proceeds of balancing event 164 1 In Chapter 5 of Part 12 of the Capital Allowances Act 2001 (c. 2) (miscellaneous supplementary provisions), after section 570 insert— Anti-avoidance Avoidance affecting proceeds of balancing event 570A 1 This section applies where an event occurs in relation to an asset (a “ balancing event ”) as a result of which a balancing allowance would (but for this section) fall to be made to a person (“the taxpayer”) under Part 3, 4, 4A, 5 or 10. 2 The taxpayer is not entitled to any balancing allowance if, as a result of a tax avoidance scheme, the amount to be brought into account as the proceeds from the event is less than it would otherwise have been. 3 In subsection (2) a “ tax avoidance scheme ” means a scheme or arrangement the main purpose, or one of the main purposes, of which is the obtaining of a tax advantage by the taxpayer. 4 Where this section applies to deny a balancing allowance, the residue of qualifying expenditure immediately after the balancing event is nevertheless calculated as if the balancing allowance had been made. 5 In this section as it applies for the purposes of Part 5 (mineral extraction allowances)— a the references to the proceeds from the balancing event that are to be brought into account shall be read as references to the disposal value to be brought into account, and b the reference to the residue of qualifying expenditure shall be read as a reference to the unrelieved qualifying expenditure. . 2 This section applies in relation to any balancing event (within the meaning of section 570A, inserted by subsection (1) above) occurring on or after 27th November 2002, except where the event— a occurs in pursuance of a contract entered into before that date, and b does not occur in consequence of the exercise on or after that date of an option, right of pre-emption or similar right. Extension of first-year allowances for ICT expenditure by small enterprises 165 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Expenditure on software for sub-licensing 166 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . First-year allowances for expenditure on environmentally beneficial plant or machinery 167 Schedule 30 to this Act (first-year allowances for expenditure on environmentally beneficial plant or machinery) has effect in relation to expenditure incurred on or after 1st April 2003. Relief for research and development 168 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Tonnage tax: extension of capital allowance restrictions on lessors of ships 169 Schedule 32 to this Act (tonnage tax: restrictions on capital allowances for lessors of ships) has effect. Life insurance and pensions Insurance companies 170 Schedule 33 to this Act (which makes provision about the taxation of insurance companies, including companies which have ceased to be insurance companies after a transfer of business) has effect. Policies of life insurance etc: miscellaneous amendments 171 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Charges under life insurance policies for exceptional risk of disability 172 1 In Schedule 15 to the Taxes Act 1988 (provisions for determining whether an insurance policy is a “qualifying policy”)— a in paragraph 12(a) (disregard of so much of premium as is charged on the grounds of exceptional risk of death), and b in paragraph 12(b) (disregard of provision in policy charging, on those grounds, a sum as a debt against capital sum guaranteed on death), after “death” insert “ or disability ” . 2 Accordingly, in the heading before paragraph 12 of that Schedule, for “mortality risk” substitute “ risk of death or disability ” . 3 In paragraph 3 of that Schedule (friendly society policies), omit paragraphs (b)(iii) and (c) of sub-paragraph (8) (which make provision corresponding to paragraph 12(a) and (b) but are unnecessary). 4 In paragraph 18 of that Schedule (rules about substituted policies applied where policies are varied) insert after sub-paragraph (3)— 4 For the purposes of this paragraph there is no variation in the terms of a policy where— a an amount of premium chargeable on the grounds that an exceptional risk of death or disability is involved becomes or ceases to be payable, or b the policy is amended by the insertion, variation or removal of a provision under which, on those grounds, any sum may become chargeable as a debt against the capital sum guaranteed by the policy on death or disability. . 5 In section 460 of that Act (registered friendly societies: exemption from tax in respect of life or endowment business), in subsection (3)(b) (which makes provision corresponding to paragraph 12(a) of Schedule 15) after “death” insert “ or disability ” . 6 The amendments made by this section shall be deemed always to have had effect; but this section shall be disregarded to the extent that it would prevent a policy from being a qualifying policy at any time before 9th April 2003. Gains on policies of life insurance etc: rate of tax 173 1 Schedule 35 to this Act (which makes provision for and in connection with charging certain gains on policies of life insurance etc at the lower rate) has effect. 2 The amendments made by that Schedule have effect in relation to gains treated as arising under Chapter 2 of Part 13 of the Taxes Act 1988 on the happening of chargeable events on or after 6th April 2004. Personal pension arrangements: limit on contributions 174 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Miscellaneous Payments to adopters 175 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Foster carers 176 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Currency contracts and currency options 177 1 This section applies in any case where at any time on or after 30th September 2002— a a qualifying company becomes party to a qualifying contract which is a currency contract or currency option, or b the terms of such a qualifying contract held by such a company are varied, and the conditions in subsection (2) are, or subsequently become, satisfied. 2 The conditions are that— a in accordance with generally accepted accounting practice, the company in preparing its statutory accounts uses the exchange rate implied by the qualifying contract (“ the accounting rate ”); b there is a difference between the accounting rate and the final payment rate; and c the difference between those exchange rates is more than 1 per cent of the final payment rate. 3 In subsection (2) “ the final payment rate ” means the exchange rate found by reference only to the amounts which fall or would, apart from this section and the provisions specified in subsection (4), fall to be regarded for the purposes of subsection (2) or, as the case may be, (7) of section 150 of the Finance Act 1994 (c. 9) as the amounts of the currency to be received, and the currency to be paid in exchange, under the qualifying contract as mentioned in that subsection. 4 Where this section first applies in relation to the qualifying contract in an accounting period of the company which begins before 1st October 2002 (“ the relevant contract period ”), the following provisions of the Finance Act 2002 (c. 23), namely— a section 79(1)(b) (repeal of forex), b section 80 and Schedule 24 (corporation tax: currency), and c section 83 and Schedules 26 and 27 (derivative contracts), shall be taken to have effect in the case of the company, so far as relating to that contract, in relation to that accounting period and any subsequent accounting periods. 4A In relation to a subsequent accounting period ending on or after 1 April 2009, the reference in subsection (4)(c) to Schedule 26 is to be read as a reference to Part 7 of the Corporation Tax Act 2009. 5 Where— a the qualifying contract is a currency contract which arises from the exercise of a currency option which is or was itself a qualifying contract (or a series of such currency options), and b that currency option was entered into or varied on or after 30th September 2002 (or, in the case of a series of currency options, any of them was entered into or varied on or after that date), the provisions specified in subsection (4) shall be taken to have effect in the case of the company, so far as relating to the currency option (or, in the case of a series of currency options, each of the options entered into or varied on or after 30th September 2002), in relation to the earliest accounting period (“ the relevant options period ”) in which the option (or any of the options) was so entered into or varied and any subsequent accounting periods. 6 Where the provisions specified in subsection (4) have effect by virtue of this section in relation to a currency contract or currency option the following provisions of the Finance Act 2002, namely— a section 81 (transitional provision), so far as relating to section 80 and Schedule 24, and b Schedule 28 (derivative contracts: transitional provisions etc), shall have effect accordingly. 7 In the application of Schedule 28 to the Finance Act 2002 by virtue of this section, any reference to the company’s commencement day is to be taken— a in the case of a currency contract, as a reference to the first day of the relevant contract period; or b in the case of a currency option, as a reference to the first day of the relevant options period. 8 This section does not apply in relation to any contract entered into or varied in an accounting period beginning on or after 1st October 2002 unless the contract arises from the exercise of a currency option which was entered into or varied on or after 30th September 2002 and in an accounting period beginning on or before that date. 9 In this section the following expressions, namely— a qualifying company, b qualifying contract, c currency contract, d currency option, have the same meaning as in Chapter 2 of Part 4 of the Finance Act 1994 (c. 9), (disregarding for this purpose the provisions specified in subsection (4)) and references to the exercise of an option shall be construed accordingly. 10 In this section “ statutory accounts ” has the meaning given by paragraph 52 of Schedule 26 to the Finance Act 2002 (c. 23). 11 This section shall be deemed to have come into force on 30th September 2002. Loan relationships: amendments 178 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Derivative contracts: transactions within groups 179 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Contributions to urban regeneration companies 180 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 In section 828(4) of the Taxes Act 1988 (orders or regulations under specified provisions not to be subject to Commons negative resolution parliamentary procedure) after “section 1(6),” insert “ 79B(5), ” . Repos etc 181 Schedule 38 to this Act (which contains amendments relating to arrangements for the sale and repurchase of securities etc) has effect. Relevant discounted securities: withdrawal of relief for costs and losses, etc 182 Schedule 39 to this Act (relevant discounted securities: withdrawal of relief for costs and losses, and extension of definition of “strip”) has effect. Court common investment funds 183 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Intangible fixed assets: tax avoidance arrangements and related parties 184 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Part 8 Other taxes Inheritance tax Gifts with reservation 185 1 Section 102 of the Finance Act 1986 (c. 41) (gifts with reservation) is amended as follows. 2 In subsection (5) (section not to apply where disposal is an exempt transfer by virtue of any of the provisions of the Inheritance Tax Act 1984 specified in the paragraphs of that subsection) at the end of paragraph (a) (section 18: transfers between spouses) insert “ , except as provided by subsections (5A) and (5B) below ” . 3 After subsection (5) insert— 5A Subsection (5)(a) above does not prevent this section from applying if or, as the case may be, to the extent that— a the property becomes settled property by virtue of the gift, b by reason of the donor’s spouse (“ the relevant beneficiary ”) becoming beneficially entitled to an interest in possession in the settled property, the disposal is or, as the case may be, is to any extent an exempt transfer by virtue of section 18 of the 1984 Act in consequence of the operation of section 49 of that Act (treatment of interests in possession), c at some time after the disposal, but before the death of the donor, the relevant beneficiary’s interest in possession comes to an end, and d on the occasion on which that interest comes to an end, the relevant beneficiary does not become beneficially entitled to the settled property or to another interest in possession in the settled property. 5B If or, as the case may be, to the extent that this section applies by virtue of subsection (5A) above, it has effect as if the disposal by way of gift had been made immediately after the relevant beneficiary’s interest in possession came to an end. 5C For the purposes of subsections (5A) and (5B) above— a section 51(1)(b) of the 1984 Act (disposal of interest in possession treated as coming to end of interest) applies as it applies for the purposes of Chapter 2 of Part 3 of that Act; and b references to any property or to an interest in any property include references to part of any property or interest. . 4 The amendments made by this section have effect in relation to disposals made on or after 20th June 2003. Authorised unit trusts, OEICs and common investment funds 186 1 The Inheritance Tax Act 1984 (c. 51) is amended as follows. 2 In section 6 (excluded property), after subsection (1) insert— 1A A holding in an authorised unit trust and a share in an open-ended investment company is excluded property if the person beneficially entitled to it is an individual domiciled outside the United Kingdom. . 3 In section 48 (settlements: excluded property), after subsection (3) insert— 3A Where property comprised in a settlement is a holding in an authorised unit trust or a share in an open-ended investment company— a the property (but not a reversionary interest in the property) is excluded property unless the settlor was domiciled in the United Kingdom at the time the settlement was made, and b section 6(1A) above applies to a reversionary interest in the property but does not otherwise apply in relation to the property. . 4 In section 178(1) (sale of shares etc from deceased’s estate: preliminary)— a in the definition of “qualifying investments”, after “authorised unit trust” insert “ , shares in an open-ended investment company ” , and b for “section 1 of the Administration of Justice Act 1965” substitute “ section 42 of the Administration of Justice Act 1982 ” . 5 Section 272 (general interpretation) is amended as follows. 6 After the definition of “amount” insert— “ authorised unit trust ” means a scheme which is a unit trust scheme for the purposes of section 469 of the Taxes Act 1988 (see subsection (7) of that section) and in the case of which an order under section 243 of the Financial Services and Markets Act 2000 is in force; . 7 After the definition of “mortgage” insert— “ open-ended investment company ” means an open-ended investment company within the meaning given by section 236 of the Financial Services and Markets Act 2000 which is incorporated in the United Kingdom; . 8 This section has effect in relation to transfers of value or other events occurring on or after 16th October 2002. Landfill tax Rate of landfill tax 187 In section 42 of the Finance Act 1996 (c. 8) (amount of landfill tax), for the amount specified in subsection (1)(a), and the corresponding amount in subsection (2), substitute— a “ £14 ” in relation to taxable disposals made, or treated as made, on or after 1st April 2003 and before 1st April 2004; b “ £15 ” in relation to taxable disposals made, or treated as made, on or after 1st April 2004. Climate change levy Exemption for fuel used in recycling processes 188 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CHP exemption to be based on current efficiency 189 1 Schedule 6 to the Finance Act 2000 (c. 17) (climate change levy) is amended as follows. 2 In paragraph 15 (exemption for supplies to combined heat and power stations)— a for paragraph (b) of sub-paragraph (4) substitute— b the “efficiency percentage” for a combined heat and power station shall be determined in accordance with regulations under paragraph 149. ; b omit sub-paragraph (5). 3 In paragraph 148 (meaning of “combined heat and power station” etc)— a in sub-paragraphs (2)(c) and (3)(c), for “complying with sub-paragraph (6) and (so far as applicable)” substitute “ complying (so far as applicable) with ” ; b omit sub-paragraph (6) (efficiency percentage to be stated on certificate of full or partial exemption). 4 In paragraph 149(1) (determination of efficiency percentages for combined heat and power stations) omit “the percentage that is to be stated in a certificate under paragraph 148 as”. 5 This section has effect in relation to supplies made on or after such day as the Treasury may by order made by statutory instrument appoint. Supplies not known to be taxable when made, etc 190 1 In Schedule 6 to the Finance Act 2000 (climate change levy), paragraph 24 (deemed supply: change of circumstances or intentions) is amended as follows. 2 In the heading, for “ change of circumstances or intentions ” substitute “ change of circumstances etc ” . 3 For sub-paragraphs (1) and (2) substitute— 1 This paragraph applies in the following cases. 1A The first case is where— a a supply of a taxable commodity has been made, b the supply was not a taxable supply, and c there is such a change in circumstances or any person’s intentions that, if the changed circumstances or intentions had existed at the time the supply was made, the supply would have been a taxable supply. 1B The second case is where— a a supply of a taxable commodity has been made, b the supply was made on the basis that it was not a taxable supply, and c it is later determined that the supply was (to any extent) a taxable supply. 2 This paragraph does not apply where the reason that— a the supply was not a taxable supply, or b the supply was made on the basis that it was not a taxable supply, is that it was, or was thought to be, exempt from the levy under paragraph 19 or 20A (exemption for supply of electricity produced from renewable sources or in combined heat and power stations) (but see paragraph 20 or 20B). . 4 In sub-paragraph (3), at the beginning insert “ Where this paragraph applies, ” . 5 After that sub-paragraph insert— 3A Where— a had matters been as mentioned in sub-paragraph (1A)(c), only part of the supply would have been a taxable supply, or b the determination referred to in sub-paragraph (1B)(c) is that only part of the supply was a taxable supply, the reference in sub-paragraph (3) to the commodity shall be read as a reference to a corresponding part of it. . 6 In sub-paragraph (5) for “sub-paragraph (1)(c)” substitute “ sub-paragraph (1A)(c) ” . 7 In paragraph 34(3) of that Act (time when deemed supply under paragraph 24 treated as made) at the end insert “ or, as the case may be, upon the later determination ” . 8 This section has effect in relation to supplies made on or after such day as the Treasury may by order made by statutory instrument appoint. Deemed supplies 191 1 Schedule 6 to the Finance Act 2000 (c. 17) (climate change levy) is amended as follows. 2 In paragraph 5(3) (levy chargeable on deemed supply of electricity) for “paragraph 23(3)” substitute “ paragraph 20(6)(a), 20B(6)(a), 23(3) or 24 ” . 3 In paragraph 6 (supplies of gas)— a after sub-paragraph (2) insert— 2A Levy is chargeable on a supply of gas that is deemed to be made under paragraph 24. ; b in sub-paragraph (3) for “sub-paragraphs (1) and (2)” substitute “ sub-paragraph (1), (2) or (2A) ” . 4 Subsection (2) has effect in relation to supplies deemed to be made on or after 31st March 2003, and subsection (3) in relation to supplies deemed to be made on or after the day on which this Act is passed. Amendments about registration, payment etc 192 1 Schedule 6 to the Finance Act 2000 (c. 17) (climate change levy) is amended as follows. 2 In paragraph 41 (returns and payment of levy)— a for paragraph (a) of sub-paragraph (1) (liability to account for levy by reference to accounting periods) substitute— a for persons liable to account for levy to do so— i by reference to such periods (“accounting periods”) as may be determined by or under the regulations, or ii in such other way as may be so determined; ; b in sub-paragraph (1)(c) (liability to pay) omit “for any period”; c after sub-paragraph (2) insert— 2A Paragraph 91(5) provides for the application of Part 7 of this Schedule (recovery and interest) in relation to cases where, by virtue of regulations under sub-paragraph (1)(a)(ii) above, a person is liable to account for levy otherwise than by reference to accounting periods. 2B Regulations under this paragraph may provide for the application of any provision of this Schedule in relation to such cases. . 3 In paragraph 53 (requirement to be registered), after sub-paragraph (3) insert— 4 Regulations made by the Commissioners may provide that, in such cases or circumstances and subject to such conditions or requirements as may be prescribed in the regulations, the Commissioners may exempt a person from the requirement to be registered. . 4 In paragraph 62(2)(b) (provision in regulations about bringing tax credit into account) for “levy due from him for such accounting period or periods” substitute “ such levy due from him ” . 5 In paragraph 78 (assessments of amounts of levy due), after sub-paragraph (1) insert— 1A Where it appears to the Commissioners— a that any levy for which a person is liable to account otherwise than by reference to an accounting period has become due, and b that there has been a default by that person that falls within sub-paragraph (2), they may assess the amount of that levy to the best of their judgement and notify it to him. . 6 In paragraph 91 (interpretation etc of Part 7) at the end insert— 5 In relation to cases where, by virtue of regulations under paragraph 41(1)(a)(ii), a person is liable to account for levy otherwise than by reference to accounting periods, this Part of this Schedule shall have effect as if— a references to levy due for “an” or “any” accounting period were references simply to levy due; b references to levy due for a specified accounting period were references to the levy in question; c references to an assessment for a specified accounting period were references to an assessment in respect of the levy in question; d any time limit framed by reference to the end of the accounting period for which levy is due were framed by reference to the date on which payment of the levy is due; e references to the making of a return for an accounting period were references to the payment of the levy in question; f references to the amount shown in such a return were references to the amount of levy paid; g paragraph 88(8) and (9) were omitted. . 7 In paragraph 93(4) (criminal penalty for false return)— a in paragraph (a) after “return” insert “ or other notification ” ; b in paragraph (b), and in the words after that paragraph, after “return” insert “ or notification ” . 8 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 In paragraph 125(1) (obligation to keep records) for “persons who are, or are required to be, registered” substitute persons who— a are registered, b are required to be registered, or c are exempted from the requirement to be registered by regulations under paragraph 53(4) . 10 In paragraph 135(1)(c) (Commissioners' certificate as evidence of non-payment of levy shown as due in a return) after “return” insert “ or other notification ” . Electricity from renewable sources etc 193 1 Schedule 6 to the Finance Act 2000 (c. 17) (climate change levy) is amended as follows. 2 In paragraph 20 (exemption under paragraph 19: averaging periods) for sub-paragraphs (6) to (8) substitute— 6 If the total mentioned in sub-paragraph (3)(b) exceeds that mentioned in sub-paragraph (3)(a), then— a in a case where, at the time when the balancing period ends, an averaging period also ends because of sub-paragraph (2)(f) or (g), the supplier is for the purposes of this Schedule deemed to make at that time a taxable supply of a quantity of electricity equal to the excess; b in any other case, a balancing debit equal to the excess is carried forward to the next balancing period. . 3 In paragraph 20B (exemption under paragraph 20A: averaging periods) for sub-paragraphs (6) to (8) substitute— 6 If the total mentioned in sub-paragraph (3)(b) exceeds that mentioned in sub-paragraph (3)(a), then— a in a case where, at the time when the balancing period ends, an averaging period also ends because of sub-paragraph (2)(f) or (g), the supplier is for the purposes of this Schedule deemed to make at that time a taxable supply of a quantity of electricity equal to the excess; b in any other case, a balancing debit equal to the excess is carried forward to the next balancing period. . 4 The amendment made by subsection (2) has effect where the end of the balancing period referred to in paragraph (a) of the sub-paragraph (6) substituted by that subsection falls on or after 31st March 2003. 5 The amendment made by subsection (3) has effect where the end of the balancing period referred to in paragraph (a) of the sub-paragraph (6) substituted by that subsection falls on or after 1st April 2003. Insurance premium tax Higher rate of tax: divided companies 194 1 In Schedule 6A to the Finance Act 1994 (c. 9) (insurance premium tax: premiums liable to tax at higher rate), insert after paragraph 3— Insurance provided by divided company 3A 1 A premium under a taxable insurance contract relating to a motor car or motor cycle also falls within paragraph 2 above if— a the insurance to be provided under the contract is provided by a divided company, and b any division of that company would, if it were a separate company, be a person connected with a supplier of motor cars or motor cycles. 2 A premium under a taxable insurance contract relating to relevant goods also falls within paragraph 3 above if— a the insurance to be provided under the contract is provided by a divided company, and b any division of that company would, if it were a separate company, be a person connected with a supplier of relevant goods. 3 Sub-paragraph (1) or (2) above does not apply if the insurance is provided to the insured free of charge. 4 A premium falls within paragraph 2 above by virtue of this paragraph only to the extent that it is attributable to cover for a risk which relates to a motor car or motor cycle supplied by a supplier of motor cars or motor cycles with whom the division in question would, if it were a separate company, be connected. 5 A premium falls within paragraph 3 above by virtue of this paragraph only to the extent that it is attributable to cover for a risk which relates to relevant goods supplied by a supplier of relevant goods with whom the division would, if it were a separate company, be connected. 6 For the purposes of this paragraph— a a company is a “ divided company ” if under the law under which the company is formed, under the company’s constitution or under arrangements entered into by or in relation to the company— i some or all of the assets of the company are available primarily, or only, to meet particular liabilities of the company, and ii some or all of the members of the company, and some or all of its creditors, have rights primarily, or only, in relation to particular assets of the company; b a “ division ” of such a company means an identifiable part of it (by whatever name known) that carries on distinct business activities and to which particular assets and liabilities of the company are primarily or wholly attributable. 7 In this paragraph “ provided to the insured free of charge ” has the meaning given by sub-paragraph (5) of paragraph 2 or 3 above. In determining for this purpose whether a divided company by whom insurance is provided is a person falling within sub-paragraph (2) of paragraph 2 or 3 above, the company shall be treated as connected with any person with whom a division of that company would be connected if it were a separate company. 8 Other expressions defined for the purposes of paragraph 2 or 3 above have the same meaning in this paragraph. . 2 Subsection (1) applies in relation to a premium that falls to be regarded for the purposes of Part 3 of the Finance Act 1994 (c. 9) (insurance premium tax) as received under a taxable insurance contract by an insurer on or after the day on which this Act is passed. Part 9 Miscellaneous and supplementary provisions Provisions consequential on changes to company law Companies acquiring their own shares 195 1 This section applies for the purposes of the Taxes Acts and the Inheritance Tax Act 1984 (c. 51) where a company acquires any of its own shares (whether by purchase, the issuing of bonus shares or otherwise). 2 The acquisition of any of those shares by the company is not to be treated as the acquisition of an asset. 3 The company is not, by virtue of the acquisition or holding of any of those shares or its being entered in the company’s register of members in respect of any of them, to be treated as a member of itself. 4 Subject to subsection (5)— a the company’s issued share capital is to be treated as if it had been reduced by the nominal value of the shares acquired, b such of those shares as are not cancelled on acquisition are to be treated as if they had been so cancelled, and c any subsequent cancellation by the company of any of those shares is to be disregarded (and, accordingly, is not the disposal of an asset and does not give rise to an allowable loss within the meaning of the Taxation of Chargeable Gains Act 1992 (c. 12)). 5 Where the shares are issued to the company as bonus shares, subsection (4)(a) and (b) does not apply and the shares are to be treated as if they had not been issued. 6 Where, disregarding subsections (2) to (5)— a a company holds any of its own shares, and b the company issues bonus shares in respect of those shares or any class of those shares (“ the existing shares ”), nothing in this section prevents the existing shares being the company’s holding of shares for the purposes of the application of section 126 of the Taxation of Chargeable Gains Act 1992 (application of sections 127 to 131 of that Act (company reorganisations etc)). 7 In subsection (6) the reference to the application of section 126 of the Taxation of Chargeable Gains Act 1992 does not include a reference to the application of that section in a modified form by virtue of any enactment relating to chargeable gains. 8 Where a company disposes of any of its own shares to a person in circumstances where, but for subsections (2) to (5), it would be regarded as holding the shares immediately before the disposal— a subsections (4)(b) and (c) and (5) cease to apply in relation to the shares disposed of (“ the relevant shares ”), b the relevant shares are to be treated as having been issued as new shares to that person by the company at the time of the disposal (and not as having been disposed of by the company at that time), c that person is to be treated as having subscribed for the relevant shares, d an amount equal to the amount or value of the consideration (if any) payable for the disposal of the relevant shares is to be treated as the amount subscribed for those shares, e if the amount or value of that consideration does not exceed the nominal value of those shares, the share capital of those shares is to be treated for the purposes of Part 23 of the Corporation Tax Act 2010 as if it were an amount equal to the amount or value of that consideration, and f if the amount or value of that consideration exceeds their nominal value, the relevant shares are to be treated as if they had been issued at a premium representing that excess. 9 Where— a a company purchases its own shares, and b the price payable by a company for the shares is taken into account in computing the profits of the company which are chargeable to tax under Chapter 2 of Part 3 of the Corporation Tax Act 2009 , subsections (2) to (7) do not apply and subsection (8) does not apply in relation to any disposal by the company of any of the shares. 10 Schedule 40 to this Act (which makes amendments relating to the acquisition and disposal by a company of its own shares) has effect. 11 For the purposes of this section— a a company issues “ bonus shares ” if it issues share capital as paid up otherwise than by the receipt of new consideration (within the meaning of section 1115 of the Corporation Tax Act 2010 ), and b “ the Taxes Acts ” has the same meaning as in the Taxes Management Act 1970 (c. 9), and in this section references to a “ company ” are to a company with a share capital. 12 The preceding provisions of this section and the provisions of Schedule 40 to this Act have effect in relation to any acquisition of shares by a company on or after such day as the Treasury may by order made by statutory instrument appoint. Companies in administration 196 Schedule 41 to this Act (provisions relating to the treatment, for tax purposes, of companies in administration) has effect. International matters Exchange of information between tax authorities of member States 197 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Arrangements for mutual exchange of tax information 198 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Savings income: Community obligations and international arrangements 199 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Controlled foreign companies: exempt activities 200 1 Schedule 42 to this Act (which amends Part 2 of Schedule 25 to the Taxes Act 1988 (exempt activities)) shall have effect. 2 The amendments made by that Schedule have effect in relation to accounting periods of a controlled foreign company beginning on or after 27th November 2002. 3 In this section “ accounting period ” and “ controlled foreign company ” have the same meaning as in Chapter 4 of Part 17 of the Taxes Act 1988. 4 This section shall be taken to have come into force on 27th November 2002. Application of CFC provisions to Hong Kong and Macao companies 201 1 In Part 2 (exempt activities) of Schedule 25 to the Taxes Act 1988 (cases where section 747(3) does not apply), in paragraph 5 insert after sub-paragraph (2)— 3 In the case of a controlled foreign company— a which is, by virtue of section 749(5), presumed to be resident in a territory in which it is subject to a lower level of taxation, b the business affairs of which are, throughout the accounting period in question, effectively managed in a special administrative region, and c which is liable to tax for that period in that region, references in the following provisions of this Part of this Schedule to the territory in which that company is resident shall be construed as references to that region. 4 In sub-paragraph (3) above “ special administrative region ” means the Hong Kong or the Macao Special Administrative Region of the People’s Republic of China. 5 Where sub-paragraph (3) above applies, it applies in place of sub-paragraph (2). . 2 This section shall be deemed to have had effect— a as from 1st July 1997, so far as relating to the Hong Kong Special Administrative Region; b as from 20th December 1999, so far as relating to the Macao Special Administrative Region. Administrative matters Deduction of tax from interest: recognised clearing houses etc 202 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Authorised unit trusts: interest distributions paid gross 203 1 Chapter 3 of Part 12 of the Taxes Act 1988 (unit trust schemes) is amended as follows. 2 In section 468L(4) (obligation to deduct tax from interest distributions to be subject to provision made by sections 468M and 468N), for “sections 468M and 468N” substitute “ section 468M ” . 3 For sections 468M and 468N substitute— Cases where no obligation to deduct tax 468M 1 Where an interest distribution is made for a distribution period to a unit holder, any obligation to deduct under section 349(2) does not apply to the interest distribution if— a the unit holder is a company or the trustees of a unit trust scheme, or b either the residence condition or the reputable intermediary condition is on the distribution date fulfilled with respect to the unit holder. 2 Section 468O makes provision about the circumstances in which the residence condition or the reputable intermediary condition is fulfilled with respect to a unit holder. . 4 Section 468O (residence condition) is amended as follows. 5 In subsection (1), for “sections 468M and 468N” substitute “ section 468M ” . 6 After that subsection insert— 1A For the purposes of section 468M, the reputable intermediary condition is fulfilled with respect to a unit holder if— a the interest distribution is paid on behalf of the unit holder to a company, b the company either is subject to the EC Money Laundering Directive, or to equivalent non-EC provisions, or is an associated company resident in a regulating country or territory of a company which is so subject, and c the trustees of the authorised unit trust have reasonable grounds for believing that the unit holder is not ordinarily resident in the United Kingdom. 1B For the purposes of subsection (1A)(b) above— a a company is subject to the EC Money Laundering Directive if it is a credit institution or financial institution as defined by Article 1 of Directive 91/308/ EEC , as amended by Directive 2001/97/EC , b a company is subject to equivalent non-EC provisions if it is required by the law of any country or territory which is not a member State to comply with requirements similar to those which, under Article 3 of that Directive (as so amended), member States must ensure are complied with by credit institutions and financial institutions, c a company is to be treated as another’s associated company if it would be so treated for the purposes of Part 11 (see section 416), and d a country or territory is a regulating country or territory if it either is a member State or imposes requirements similar to those which, under Article 3 of that Directive (as so amended), member States must ensure are complied with by credit institutions and financial institutions. 1C If Directive 91/308/EEC ceases to have effect, or is further amended, the Treasury may by order make consequential amendments in subsections (1A) and (1B) above. . 7 In the sidenote, insert at the end “ and reputable intermediary condition ” . 8 In section 468P(1) (residence declarations)— a for “468O” substitute “ 468O(1) ” , and b for “subsections (2) to (4)” substitute “ subsection (2) or (3) ” . 9 After section 468P insert— Section 468O(1A): consequences of reasonable but incorrect belief 468PA Where— a an interest distribution is made to a unit holder by the trustees of an authorised unit trust, b the trustees, in reliance on the reputable intermediary condition being fulfilled with respect to the unit holder, do not comply with the obligation under section 349(2) to make a deduction from the interest distribution, c that obligation would apply but for that condition being so fulfilled, and d (contrary to the belief of the trustees) the unit holder is in fact ordinarily resident in the United Kingdom, section 350 and Schedule 16 have effect as if that obligation applied. Regulations supplementing sections 468M to 468PA 468PB 1 The Board may by regulations make provision for giving effect to sections 468M to 468PA. 2 The regulations may, in particular, include provision modifying the application of those sections in relation to interest distributions made to or received under a trust. 3 The regulations may, in particular, include provision for the giving by officers of the Board of notices requiring trustees of authorised unit trusts to supply information and make available books, documents and other records for inspection on behalf of the Board. 4 The regulations may— a make provision in relation to times before they are made, b make different provision for different cases, and c make such supplementary, incidental, consequential or transitional provision as appears to the Board to be appropriate. . 10 Section 98 of the Taxes Management Act 1970 (c. 9) (penalties: provisions requiring information etc in response to notices) is amended as follows. 11 In subsection (4A)(b), for “or (4D)” substitute “ , (4D) or (4E) ” . 12 After subsection (4D) insert— 4E A payment is within this subsection if— a it is an interest distribution made to a unit holder by the trustees of an authorised unit trust, b the trustees, in purported reliance on the reputable intermediary condition being fulfilled with respect to the unit holder, do not comply with the obligation under section 349(2) of the principal Act to make a deduction from the interest distribution, c that obligation would apply if that condition were not so fulfilled, and d the trustees did not believe that the unit holder was not ordinarily resident in the United Kingdom or could not reasonably have so believed (so that that condition was not so fulfilled). Expressions used in this subsection have the same meaning as in Chapter 3 of Part 12 of the principal Act. . 13 In the first column of the Table, after the entry relating to regulations under section 431E(1) or 441A(3) of the principal Act, insert— “ section 468P(6); regulations under section 468PB(3); ” . 14 This section has effect in relation to interest distributions made on or after 16th October 2002. Mandatory electronic payment 204 1 The Commissioners for Her Majesty's Revenue and Customs may make regulations requiring a person to use electronic means in making specified payments under legislation relating to a tax (or duty) for which the Commissioners are responsible. 2 The regulations may provide for exceptions. 3 Regulations under this section may make provision— a as to conditions that must be complied with in connection with the use of electronic means for the making of any payment; b for treating a payment as not having been made unless conditions imposed by any of the regulations are satisfied; c for determining the time when payment is to be taken to have been made. 4 Regulations under this section may also make provision (which may include provision for the application of conclusive or other presumptions) as to the manner of proving for any purpose— a whether any use of electronic means for making a payment is to be taken as having resulted in the payment being made; b the time of the making of any payment for the making of which electronic means have been used; c any other matter for which provision may be made by regulations under this section. 5 Regulations under this section may— a allow any authorisation or requirement for which the regulations may provide to be given or imposed by means of a specific or general direction given by the Commissioners; b provide that the conditions of any such authorisation or requirement are to be taken to be satisfied only where Her Majesty's Revenue and Customs are satisfied as to specified matters. 6 Regulations under this section may contain provision— a requiring Her Majesty's Revenue and Customs to notify persons appearing to them to be, or to have become, a person required to use electronic means for the making of any payments in accordance with the regulations; b enabling a person so notified to have the question whether he is such a person determined in the same way as an appeal. 7 Regulations under this section may confer power on the Commissioners to give specific or general directions— a suspending, for any period during which the use of electronic means for the making of payments is impossible or impractical, any requirements imposed by the regulations relating to the use of such means; b substituting alternative requirements for the suspended ones; c making any provision that is necessary in consequence of the imposition of the substituted requirements. 8 The power to make provision by regulations under this section includes power— a to provide for a contravention by a large employer of, or any failure by a large employer to comply with, the regulations (a “ default ”) to attract a surcharge of a specified amount; b to provide that specified enactments relating to penalties imposed for the purposes of any matter relating to a tax (or duty) for which the Commissioners are responsible (including enactments relating to assessments, review and appeal) apply, with or without modifications, in relation to surcharges under the regulations. 9 The regulations may specify the surcharge for each default as— a a specified percentage, depending on the circumstances but not exceeding 10%, of the amount of the payment to which the default relates, or b a specified percentage, depending on the circumstances but not exceeding 0.83%, of the total amount of tax due for the accounting period, year of assessment or other specified period of twelve months during which the default occurred; but, in either case, they may specify £30 if it is more. 10 Regulations under this section may— a make different provision for different cases; b make such incidental, supplemental, consequential and transitional provision in connection with any provision contained in any of the regulations as the Commissioners think fit. 11 Regulations under this section shall be made by statutory instrument subject to annulment in pursuance of a resolution of the House of Commons. 12 In this section— “ Her Majesty's Revenue and Customs ” includes a person acting under the authority of the Commissioners in relation to payment by electronic means; “ large employer ” means a person paying PAYE income to 250 or more recipients (and regulations under this section may make provision as to the date or period by reference to which this is to be determined and the circumstances in which a person is to be treated as paying PAYE income to a recipient); “ legislation ” means any enactment, EU or subordinate legislation; “ specified ” means specified by or under regulations under this section; “ subordinate legislation ” has the same meaning as in the Interpretation Act 1978 (c. 30). 13 Regulations under section 95(1) of the Finance Act 2007 (payment by cheque) may, in particular, provide for a payment which is made by cheque in contravention of regulations under this section to be treated as made when the cheque clears, as defined in the regulations under that section. Use of electronic means of payment under other provisions 205 1 Any power to make subordinate legislation for or in connection with the making of payments conferred in relation to a taxation (or duty) matter on— a the Commissioners for Her Majesty's Revenue and Customs , or b the Treasury, includes power to make any such provision in relation to the making of those payments as could be made in exercise of the power conferred by section 204. 2 Provision as to means of payment made in exercise of the powers conferred by section 204 or subsection (1) above has effect notwithstanding so much of any enactment or subordinate legislation as would otherwise allow payment to be made by any other means. 3 Expressions used in this section and section 204 have the same meaning in this section as in that section. 4 Nothing in this section shall be read as restricting the generality of the power conferred by section 204. Admissibility of evidence not affected by offer of settlement etc 206 1 In section 105(1) of the Taxes Management Act 1970 (c. 9) (evidence in cases of fraudulent conduct), for paragraphs (a) and (b) and the word “that” preceding them substitute— a that where serious tax fraud has been committed the Board may accept a money settlement and that the Board will accept such a settlement, and will not pursue a criminal prosecution, if he makes a full confession of all tax irregularities, or b that the extent to which he is helpful and volunteers information is a factor that will be taken into account in determining the amount of any penalty, . 2 For the heading to that section substitute “ Admissibility of evidence not affected by offer of settlement etc ” . 3 In paragraph 3(1) of Schedule 18 to the Finance Act 1999 (c. 16) (which makes corresponding provision in relation to stamp duty), for paragraphs (a) and (b) substitute— a that where serious stamp duty fraud has been committed the Board may accept a money settlement and that the Board will accept such a settlement, and will not pursue a criminal prosecution, if he makes a full confession of all stamp duty irregularities, or b that the extent to which he is helpful and volunteers information is a factor that will be taken into account in determining the amount of any penalty, . 4 For the heading before that paragraph substitute “ Admissibility of evidence not affected by offer of settlement etc ” . 5 The above amendments have effect in relation to statements made, or documents produced, after the passing of this Act. Consequential claims etc 207 1 In Part 4 of the Taxes Management Act 1970 (assessment and claims), after section 43B insert— Consequential claims etc 43C 1 Where— a a return is amended under section 28A(2)(b), 28B(2)(b) or 28B(4), and b the amendment is made for the purpose of making good to the Crown any loss of tax attributable to fraudulent or negligent conduct on the part of the taxpayer or a person acting on his behalf, sections 36(3) and 43(2) apply in relation to the amendment as they apply in relation to any assessment under section 29. 2 Where— a a return is amended under section 28A(2)(b), 28B(2)(b) or 28B(4), and b the amendment is not made for the purpose mentioned in subsection (1)(b) above, sections 43(2), 43A and 43B apply in relation to the amendment as they apply in relation to any assessment under section 29. 3 References to an assessment in sections 36(3), 43(2), 43A and 43B, as they apply by virtue of subsection (1) or (2) above, shall accordingly be read as references to the amendment of the return. 4 Where it is necessary to make any adjustment by way of an assessment on any person— a in order to give effect to a consequential claim, or b as a result of allowing a consequential claim, the assessment is not out of time if it is made within one year of the final determination of the claim. For this purpose a claim is not taken to be finally determined until it, or the amount to which it relates, can no longer be varied, on appeal or otherwise. 5 In subsection (4) above “ consequential claim ” means any claim, supplementary claim, election, application or notice that may be made or given under section 36(3), 43(2) or 43A (as it applies by virtue of subsection (1) or (2) above or otherwise). . 2 In section 43A of that Act (further assessments: claims etc), in subsection (2A) (elections to which extension of time limit does not apply) for the words from “an election under” to the end substitute an election under— a section 257BA of the principal Act (election as to transfer of married couple’s allowance), or b . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . c section 35(5) of the Taxation of Chargeable Gains Act 1992 (election for assets to be re-based to 1982). . 3 So far as it applies in relation to an amendment of a return, this section applies only where the notice of the amendment is issued after the day on which this Act is passed. National Savings Ordinary accounts and investment accounts 208 1 The National Savings Bank Act 1971 (c. 29) is amended as follows. 2 In section 3 (ordinary and investment deposits), after subsection (1) insert— 1A But subsection (1) is subject to any provision made in relation to ordinary accounts or ordinary deposits by regulations under section 2 of this Act made by virtue of section 8(3) of this Act. . 3 Section 6 (interest on investment deposits) is amended as follows. 4 In subsection (2), for “Director of Savings may from time to time determine with the consent of the Treasury” substitute “ Treasury may from time to time determine ” . 5 After that subsection insert— 2ZA The Treasury may determine that a rate of interest payable on investment deposits, or investment deposits of a particular description, is to be a rate produced by the operation of a formula involving the movement of an index or indices or any other factor. . 6 In subsection (3), after “description” insert “ (other than one occasioned by the operation of a formula) ” . 7 After that subsection insert— 4 In the case of an alteration in a rate of interest not affecting deposits received before it is made, any notice of the alteration required to be given by subsection (3) above may be given after the alteration is made. . 8 Section 8 (regulations as to particular matters) is amended as follows. 9 In subsection (1), after paragraph (b) insert— ba for the issuing of cards for use in making investment deposits or in withdrawing cash from investment accounts (or both) and regulating the use of such cards; . 10 After subsection (2) insert— 3 Regulations under section 2 of this Act may also make provision— a prohibiting the opening of ordinary accounts after a prescribed date; b prohibiting the opening of investment accounts of a prescribed description after a date prescribed in relation to that description of accounts; c prohibiting the making of ordinary deposits after a prescribed date; d prohibiting the making of deposits in investment accounts of a prescribed description after a date prescribed in relation to that description of accounts; e requiring the withdrawal of all of the money deposited in any dormant account of a prescribed description if any of the money deposited in it is withdrawn after a date prescribed in relation to that description of account; f for the transfer to investment accounts of a prescribed description of deposits in dormant accounts of a prescribed description; g for the transfer to a special Director’s account of deposits in dormant accounts of a prescribed description or in accounts to which deposits have been transferred pursuant to provision made by virtue of paragraph (f) above. 4 In subsection (3) above— “ dormant account ” means an account in which deposits may not be made because of provision made by virtue of paragraph (c) or (d) of that subsection; and “ special Director’s account ” means an investment account in the name of the Director of Savings in which deposits are held on behalf of the persons entitled to them. . 11 After section 9 insert— Investment account terms and conditions 9A 1 Any provision which may be made in relation to investment deposits by regulations under section 2 of this Act may, in the case of deposits in investment accounts of any description first made available after the passing of the Finance Act 2003, be included instead in the terms and conditions of the accounts. 2 Any provision included in the terms and conditions of investment accounts under subsection (1) above has effect subject to regulations under section 2 of this Act and orders under section 4 of this Act. 3 In this section “ terms and conditions ” means terms and conditions set by the Treasury and published by Director of Savings in a manner approved by the Treasury. . Abolition of accounting requirements relating to investment deposits 209 In section 120 of the Finance Act 1980 (c. 48) (investment deposits with National Savings Bank: accounting provisions etc), omit subsections (4) and (5) (which require the Director of Savings to keep an account of investment deposits etc and transmit annual statements to the Comptroller and Auditor General for examination etc). Other financial matters Payments for service of national debt 210 1 Section 15 of the National Loans Act 1968 (c. 13) (payments for service of national debt) is amended as follows. 2 In subsection (1) (payments to be made out of Consolidated Fund into National Loans Fund), for “charges on the National Loans Fund for the service of national debt over” substitute payments out of the National Loans Fund— a which represent interest on liabilities of the National Loans Fund, or b which, in the opinion of the Treasury, ought to be treated in the same way as payments which represent such interest, over . 3 Omit subsection (3) (which defines “charges on the National Loans Fund for the service of national debt”). 4 In paragraph 13 of Schedule 5A to that Act (Debt Management Account: payments to be made out of National Loans Fund into Debt Management Account), omit sub-paragraph (2) (payments to be treated as charges on the National Loans Fund for the service of national debt). Definition of liabilities and assets of National Loans Fund 211 In section 19(4) of the National Loans Act 1968 (c. 13) (which defines as the liabilities of the National Loans Fund the nominal amount of the debt outstanding to it and as its assets its balance and loans etc outstanding to it), for the words from “of the National Loans Fund” onwards substitute “ and assets of the National Loans Fund shall be as determined by the Treasury. ” . Accounts of Consolidated Fund and National Loans Fund 212 1 Section 21 of the National Loans Act 1968 (accounts of Consolidated Fund and National Loans Fund) is amended as follows. 2 In subsection (1) (annual accounts of payments in and out), for the words from “in such form” onwards substitute “ an account relating to the Consolidated Fund, and an account relating to the National Loans Fund, in such form and containing such information as the Treasury consider appropriate. ” . 3 Omit subsection (3) (statements of additional information regarding transactions, assets and liabilities of Consolidated Fund and National Loans Fund). 4 Subsection (2) has effect for the financial year ending with 31st March 2004 and subsequent financial years. 5 Subsection (3) has effect for such financial year as the Treasury may by order made by statutory instrument appoint and subsequent financial years. Debt Management Account: abolition of borrowing cap 213 In Schedule 5A to the National Loans Act 1968 (Debt Management Account), omit paragraph 8 (borrowings otherwise than from National Loans Fund not to exceed total standing to credit of that Account in that Fund and at Bank of England). Payments in error from or to National Loans Fund 214 In paragraph 11 of Schedule 5A to the National Loans Act 1968 (c. 13) (payments between National Loans Fund and Debt Management Account in respect of difference between assets and liabilities of that Account), insert at the end— 4 If any amount paid under sub-paragraph (1A) or (3) above should not have been paid, the Treasury may repay the whole or any part of it. . Supplementary Interpretation 215 In this Act “ the Taxes Act 1988 ” means the Income and Corporation Taxes Act 1988 (c. 1). Repeals 216 1 The enactments mentioned in Schedule 43 to this Act (which include provisions that are spent or of no practical utility) are repealed to the extent specified. 2 The repeals specified in that Schedule have effect subject to the commencement provisions and savings contained or referred to in the notes set out in that Schedule. Short title 217 This Act may be cited as the Finance Act 2003.