SCHEDULES

[F1SCHEDULE 29AU.K.Taxable property held by investment-regulated pension schemes

Part 4U.K.Amount and timing of unauthorised payment

Conversion or adaptation as residential propertyU.K.

39(1)This paragraph applies to a case within subsection (3) of section 174A (conversion or adaptation as residential property).U.K.

(2)The unauthorised payment is treated as made on the occurrence of whichever of the following first occurs after the property has become residential property—

(a)the substantial completion of the works to convert or adapt the property;

(b)the interest in the property ceasing to be held by the pension scheme.

(3)But if the property becomes residential property after the end of the period of three years beginning with the date on which the first payment was made in connection with the works to convert or adapt the property, the unauthorised payment is treated as made when the property becomes residential property.

(4)If the works began before the end of the period of twelve months beginning with the acquisition of the interest in the property by the pension scheme, the total taxable amount in relation to the unauthorised payment is—

(a)the amount of consideration for the interest, determined in accordance with paragraphs 32 to 36, plus

(b)the development costs (see sub-paragraph (7)).

(5)If the works began after the end of that period, the total taxable amount in relation to the unauthorised payment is—

(a)the relevant market value (see sub-paragraph (6)), plus

(b)the development costs (see sub-paragraph (7)).

(6)In this paragraph “the relevant market value” means—

(a)the market value, at the date the works began, of the interest in the property held by the person who holds it directly, or

(b)if the interest in the property is a lease at a rent, the amount of consideration that would be treated as given by the person for the lease by virtue of paragraph 34 if it were assigned to the person at that time.

(7)In this paragraph “the development costs” means the total cost of the works to convert or adapt the property at the time when the unauthorised payment is treated as made.

(8)Where, at the time the unauthorised payment is treated as made—

(a)an amount will be payable for the works only if some uncertain future event occurs, or

(b)an amount will cease to be payable for the works if some uncertain future event occurs,

the development costs are to be determined on the assumption that the amount will be payable or, as the case may be, will not cease to be payable.

(9)Where, at that time, an amount payable for the works—

(a)depends on uncertain future events, or

(b)cannot otherwise be ascertained,

that amount is to be determined for the purposes of sub-paragraph (7) on the basis of a reasonable estimate.]