Finance Act 2003

Part 1 U.K.Excise duties

Tobacco products dutyU.K.

1Rates of tobacco products dutyU.K.

(1)For the Table of rates of duty in Schedule 1 to the Tobacco Products Duty Act 1979 (c. 7) substitute—

(2)This section shall be deemed to have come into force at 6 o'clock in the evening of 9th April 2003.

Alcoholic liquor dutiesU.K.

2Rate of duty on beerU.K.

(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.

3Rates of duty on wine and made-wineU.K.

(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 U.K.Wine and made-wine of a strength not exceeding 22 per cent

(2)This section shall be deemed to have come into force at midnight on 13th April 2003.

Hydrocarbon oil dutiesU.K.

4Rates of hydrocarbon oil dutiesU.K.

(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.

5Rebates on hydrocarbon oil dutiesU.K.

(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 dutiesU.K.

6General betting duty and pool betting duty: relief for lossesU.K.

(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—

“5AARelief for losses

(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—

“7ZARelief for losses

(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.

7General betting duty: betting exchangesU.K.

(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—

“5ABBetting exchanges

(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.

8General betting duty: restriction of exemption for on-course betsU.K.

(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.

9Bingo dutyU.K.

(1)For sections 17 to 20 of the Betting and Gaming Duties Act 1981 (bingo duty) substitute—

“17Bingo duty

(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.

18Accounting period

(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.

19Bingo receipts

(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.

20Expenditure on bingo winnings

(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).

20ACombined bingo

(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.

20BCarrying losses forward

(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.

20CSupplementary

(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—

  (a)

  the Gaming Act 1968, or

  (b)

  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—

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.

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).”.

F1(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).

10Amusement machines not operated by coins or tokensU.K.

(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 ”.

11Amusement machines: use of currencies other than sterlingU.K.

(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—

“26AAmounts in currencies other than sterling

(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.

12Responsibility for unlicensed amusement machinesU.K.

(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”.

13Rates of gaming dutyU.K.

(1)For the Table in section 11(2) of the Finance Act 1997 (c. 16) (rates of gaming duty) substitute—

(2)This section has effect in relation to accounting periods beginning on or after 1st April 2003.

Vehicle excise dutyU.K.

14Vehicle excise duty: ratesU.K.

(1)In paragraph 1 of Schedule 1 to the Vehicle Excise and Registration Act 1994 (c. 22) (the general rate)—

F2(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 ”.

F3(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.

15Disclosure for exemptions: Northern IrelandU.K.

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 ”.

16Duty at higher rate: exception for tractive unitsU.K.

(1)After section 15 of the Vehicle Excise and Registration Act 1994 insert—

“15AException for tractive units from charge at higher rate

(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 U.K.Value added tax

17Requirement of evidence or securityU.K.

(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.

18Joint and several liability for unpaid VAT of another traderU.K.

(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 anotherU.K.

77AJoint and several liability of traders in supply chain where tax unpaid

(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.

19Face-value vouchersU.K.

Schedule 1 to this Act (VAT: face-value vouchers) has effect.

20Supplies arising from prior grant of fee simpleU.K.

(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.

21Business giftsU.K.

(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.

F422Non-business use of business propertyU.K.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F523Supply of electronic services in member States: special accounting schemeU.K.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Part 3U.K.Taxes and duties on importation and exportation: penalties

PreliminaryU.K.

24IntroductoryU.K.

(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;

F6(b). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F7(c). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(d)import VAT;

F8(e). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(3)In this Part—

• “appeal tribunal” means a [F9the First-tier Tribunal or, where determined by or under Tribunal Procedure Rules, the Upper Tribunal];

• “the Commissioners” means the Commissioners of Customs and Excise;

• F10. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• F10. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• F10. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• “contravene” includes fail to comply with;

• F11...

• “demand notice” means a demand notice within the meaning of section 30;

• [F12“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 [F13into the United Kingdom]);

• “notice” means notice in writing;

• F11...

• “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—

  (a)

  his personal representative,

  (b)

  his trustee in bankruptcy or interim or permanent trustee,

  (c)

  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.

• [F14“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.]

F15(4). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F15(5). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F15(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 penaltiesU.K.

25Penalty for evasionU.K.

(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.

F16(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.

26Penalty for contravention of relevant ruleU.K.

(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.

[F17(5A)Where the conduct constituting a contravention of a relevant rule is a contravention of a condition imposed under regulations under section 20(1A), [F1820B(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—

[F19(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;

F20(c). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F21(d). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F22(e). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(f)any relevant international rules applying in relation to the relevant tax or duty.

(9)In subsection (8)—

• F23...

• “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—

  (a)

  any Act or statutory instrument, F24...

  (b)

  F24...

27Exceptions from section 26U.K.

(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).

28Liability of directors etc where body corporate liable to penalty for evasionU.K.

(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 penaltyU.K.

29Reduction of penalty under section 25 or 26U.K.

(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 noticesU.K.

30Demands for penaltiesU.K.

(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 [F2533] (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.

31Time limits for demands for penaltiesU.K.

(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.

32No prosecution after demand notice for penalty under section 26U.K.

[F26(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).

[F27(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.]

[F28Appeals and reviews]U.K.

33[F29Right to appeal against certain decisions]U.K.

(1)If, in the case of any relevant tax or duty, [F30HMRC] 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 [F31make an appeal to an appeal tribunal in respect of] the decision mentioned in paragraph (a).

(2)Where [F32HMRC] give a demand notice to a person or his representative, the person or his representative may [F33make 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 [F34HMRC] 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 [F35HMRC] 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 [F36make 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 [F37HMRC] are seeking to recover from the relevant officer or his representative.

(5)Where [F38HMRC] 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 [F39make 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.

[F40(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.]

[F4133AOffer of reviewU.K.

(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.

33BReview by HMRCU.K.

(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.

33CExtensions of timeU.K.

(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).

33DReview out of timeU.K.

(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.

33ENature of review etcU.K.

(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.

33FBringing of appealsU.K.

(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 [F42section 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.

[F43(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.]

F4434Time limit and right to further reviewU.K.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F4435Powers of Commissioners on a reviewU.K.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F4436Appeals to a tribunalU.K.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[F4537Appeal tribunalsU.K.

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.]

EvidenceU.K.

38Admissibility of certain statements and documentsU.K.

(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.

F46(3). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Miscellaneous and supplementaryU.K.

39Service of noticesU.K.

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.

F4740Penalties not to be deducted for income tax or corporation tax purposesU.K.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

41Regulations and ordersU.K.

(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 4U.K.Stamp duty land tax

IntroductionU.K.

42The taxU.K.

(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 transactionsU.K.

43Land transactionsU.K.

(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; F48...

(c)the variation of a chargeable interest [F49(other than a lease)] is—

(i)an acquisition of a chargeable interest [F49(other than a lease)] by the person benefitting from the variation, and

(ii)a disposal of a chargeable interest [F49(other than a lease)] by the person whose interest is subject to or limited by the variation.

[F50(d)the variation of a lease is an acquisition and disposal of a chargeable interest only where

[F51(i)] it takes effect, or is treated for the purposes of this Part, as the grant of a new lease[F52, 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.

44Contract and conveyanceU.K.

(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[F53, 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)—

[F54(a)possession includes receipt of rents and profits or the right to receive them, and]

(b)it is immaterial whether [F55possession 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.

[F56(9A)Where—

(a)paragraph 12A of Schedule 17A applies (agreement for lease), or

F57(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.

[F58(11)[F59Section 1122 of the Corporation Tax Act 2010] (connected persons) has effect for the purposes of this section.]

[F6044AContract providing for conveyance to third partyU.K.

(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.]

[F6145Transactions entered into before completion of contractU.K.

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.]

[F6245AContract providing for conveyance to third party: effect of transfer of rightsU.K.

(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)[F63Section 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.]

46Options and rights of pre-emptionU.K.

(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.

47ExchangesU.K.

(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 [F64(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),F65...

• [F66paragraph 17 of that Schedule (arrangements involving public or educational bodies), and]

• F65...

Chargeable interests, chargeable transactions and chargeable considerationU.K.

48Chargeable interestsU.K.

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

(a)an estate, interest, right or power in or over land in [F67England F68... 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.

[F69(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)F70...—

(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.

[F71(3A)Section 73B makes additional provision about exempt interests in relation to alternative finance arrangements.]

F72(4). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(5)The Treasury may by regulations provide that any other description of interest or right in relation to land in [F73England F74... 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.

[F75(7)This section has effect subject to subsection (3) of section 44A (contract and conveyance to third party) [F76and to paragraph 15A of Schedule 17A (reduction of rent or term of lease)].]

[F7748AInterests, transactions and consideration where land in England and WalesU.K.

(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.

[F78(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.]]

49Chargeable transactionsU.K.

(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.

50Chargeable considerationU.K.

(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.

51Contingent, uncertain or unascertained considerationU.K.

(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—

  (a)

  that it is to be paid or provided only if some uncertain future event occurs, or

  (b)

  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).

[F79(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.]

52Annuities etc: chargeable consideration limited to twelve years' paymentsU.K.

(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).

53Deemed market value where transaction involves connected companyU.K.

[F80(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)[F81Section 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.

54Exceptions from deemed market value ruleU.K.

(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 [F82section 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 chargeableU.K.

55Amount of tax chargeable: generalU.K.

(1)The amount of tax chargeable in respect of a chargeable transaction [F83to which this section applies] is [F84determined in accordance with subsections (1B) [F85and (1C)]].

[F86(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.]

[F87(1B)If F88... 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 [F89the appropriate table] below to the parts of the relevant consideration specified in the first column of [F90the appropriate table].

  [F91“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%

  [F92Table 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 F93... 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 [F94the appropriate table] in subsection (1B) to the parts of the relevant consideration specified in the first column of [F95the appropriate table].

  [F96“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—

  

  where—

  C is the chargeable consideration for the transaction, and

  R is the relevant consideration.]

F97(2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(3)For the purposes of [F98subsection (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

F99. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(4)[F100For the purposes of] [F101subsection (1C)] —

(a)the relevant land is any land an interest in which is the main subject-matter of any of [F102the linked] transactions, and

(b)the relevant consideration is the total of the chargeable consideration for all those transactions.

[F103(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 [F10474(1B)] ([F105exercise of collective rights by tenants of flats]), F106...

• F106. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(which [F107provides] for the [F108amount] 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).

F109(7). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[F11055AAmount of tax chargeable: higher rate for certain transactionsU.K.

Schedule 4A provides for the calculation of the tax chargeable in respect of certain transactions involving higher threshold interests in dwellings.]

56Amount of tax chargeable: rentU.K.

Schedule 5 provides for the calculation of the tax chargeable where the chargeable consideration for a transaction consists of or includes rent.

ReliefsU.K.

F11157Disadvantaged areas reliefU.K.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[F11257ASale and leaseback arrangementsU.K.

(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,

[F113(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 F114... 45A (contract providing for conveyance to third party: effect of transfer of rights) [F115or 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.

[F116(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.]

F117(4). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .]

F11857AAFirst-time buyersU.K.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[F11957BFirst-time buyersU.K.

(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.]

[F12058ARelief for certain acquisitions of residential propertyU.K.

Schedule 6A provides for relief in the case of certain acquisitions of residential property.]

[F12158BRelief for new zero-carbon homesU.K.

(1)The Treasury may make regulations granting relief on the first acquisition of a dwelling which is a “zero-carbon home”.

[F122(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).

58CRelief for new zero-carbon homes: supplementalU.K.

(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 [F123dwelling] 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.

[F124(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 [F125a dwelling] either—

(a)by features of the [F126building 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.]

[F12758DTransfers involving multiple dwellingsU.K.

(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.]

60Compulsory purchase facilitating developmentU.K.

(1)A compulsory purchase facilitating development is exempt from charge.

(2)In this section “compulsory purchase facilitating development” means—

(a)in relation to England F128... F129..., 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 F130..., has the same meaning as in the Town and Country Planning Act 1990 (c. 8) (see section 55 of that Act);

F131(b). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[F132(c)in relation to Northern Ireland, has the same meaning as in the Planning Act (Northern Ireland) 2011 (see section 23 of that Act).]