Finance Act 2002 (c. 23)

(The document as of February, 2008)

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(ii) by way of consideration for a transfer to company A of the whole or part of the business of that other company.

(2) For the purposes of this Part of this Schedule there is also a merger of two or more companies ("the merging companies") if--

(a) shares in a company ("company B") that is not one of the merging companies are issued to members of the merging companies, and

(b) in the case of each of the merging companies, the shares issued to members of that company are issued--

(i) in exchange for their shares in that company, or

(ii) by way of consideration for a transfer to company B of the whole or part of the business of that company.

(3) In this Part of this Schedule "the successor company"--

(a) in relation to a merger such as is described in sub-paragraph (1), means the company that fulfils the role of company A, and

(b) in relation to a merger such as is described in sub-paragraph (2), means the company that fulfils the role of company B.

Part 3 Time allowed for VCT to invest money raised by further share issue

Power to disapply, or limit operation of, section 842AA(5B) of the Taxes Act 1988

11 (1) Regulations may make provision for section 842AA(5B) of the Taxes Act 1988 (use of money raised by VCT's further issue of shares disregarded during grace period)--

(a) not to apply, or to be treated as not having applied, in specified cases;

(b) to apply, or to be treated as having applied, in specified cases--

(i) only to a specified extent;

(ii) only if specified conditions (including conditions requiring approvals to be obtained) are satisfied.

(2) Provision made by regulations under sub-paragraph (1) may (but need not) be made so that, in any particular case, section 842AA(5B) of the Taxes Act 1988--

(a) does not apply, or is treated as not having applied, at prescribed times or with effect as from a prescribed time, or

(b) applies, or is treated as having applied, in accordance with provision made under sub-paragraph (1)(b) at prescribed times or with effect as from a prescribed time.

(3) Regulations under sub-paragraph (1) may make provision in relation to shares issued on or after 17th April 2002.

(4) In sub-paragraph (1) "specified" means specified by regulations and in sub-paragraph (2) "prescribed" means specified by, or determined under, regulations.

Withdrawal of VCT approval in cases for which provision made under paragraph 11

12 (1) Regulations may make provision for withdrawal of approval of a company for the purposes of section 842AA of the Taxes Act 1988 (venture capital trusts) to be treated--

(a) in a case where the withdrawal is by reference to a condition for approval that would have been, or would be, fulfilled but for provision made under paragraph 11, and

(b) for purposes of enactments specified by regulations,

as having taken effect as from a time specified in the notice of the withdrawal that is earlier than the time when the notice is given to the company.

(2) Provision made under sub-paragraph (1) has effect subject to the provisions of section 842AA(9) of the Taxes Act 1988 (retrospective effect of notices of withdrawal of VCT approval) as to the earliest time that may be specified by such a notice.

Consequential amendment in section 842AA(5A) of the Taxes Act 1988

13 In section 842AA(5A) of the Taxes Act 1988 (subsection (5B) applies where VCT makes further issue of shares), after "Subsection (5B) below applies" insert ", subject to any regulations under paragraph 11 of Schedule 33 to the Finance Act 2002,".

Part 4 Supplementary

Extension of existing powers to give effect to VCT reliefs

14 (1) Section 73 of the Finance Act 1995 (c. 4) (power to make regulations giving effect to VCT reliefs) shall have effect as if the reliefs mentioned in subsection (1) of that section included any relief arising by reason of regulations under Part 1 or 2 of this Schedule.

(2) The powers conferred by those Parts of this Schedule are additional to those that (whether or not by reason of sub-paragraph (1)) are conferred by that section.

Penalties for non-compliance with regulations under this Schedule

15 In each column of the Table in section 98 of the Taxes Management Act 1970 (c. 9) (penalties for failure to furnish information etc), after the final entry insert "Regulations under Schedule 33 to the Finance Act 2002.".

Regulations under this Schedule: inclusion of supplementary etc provisions

16 (1) Regulations under this Schedule may--

(a) contain such administrative provisions (including provision for advance clearances and provision for the withdrawal of clearances) as appear to the Treasury to be necessary or expedient;

(b) authorise the Board to give notice to any person requiring him to provide such information, specified in the notice, as they may reasonably require in order to determine whether any conditions imposed by regulations under this Schedule are met;

(d) include such supplementary, incidental and transitional provisions as appear to the Treasury to be appropriate;

(e) include provision having retrospective effect.

(2) Without prejudice to any specific provisions in this Schedule, a power conferred by any provision of this Schedule to make regulations includes power to provide for the Board, or an officer of the Board, to exercise a discretion in dealing with any matter.

Interpretation of Schedule

17 In this Schedule--

"company" includes any body corporate or unincorporated association but does not include a partnership, and shall be construed in accordance with section 99 of the Taxation of Chargeable Gains Act 1992 (c. 12) (application of Act to unit trust schemes);
"regulations" means regulations made by the Treasury;
"shares" includes stock;
(a)
the Tax Acts,
(b)
the Taxation of Chargeable Gains Act 1992 or any other enactment relating to capital gains tax, or
(c)
the Taxes Management Act 1970 (c. 9);
"venture capital trust" has the meaning given by section 842AA of the Taxes Act 1988.

Section 111

SCHEDULE 34 Stamp duty: withdrawal of group relief: supplementary provisions

Introduction

1 (1) The provisions of this Schedule supplement section 111 (withdrawal of group relief).

(2) Expressions used in this Schedule that are defined for the purposes of that section have the same meaning in this Schedule.

Relief not withdrawn if transferor company leaves group

2 (1) Section 111 does not apply if the transferee company ceases to be a member of the same group as the transferor company by reason of the latter company leaving the group.

(2) The transferor company is regarded as leaving the group if the companies cease to be members of the same group by reason of a transaction relating to shares in--

(a) the transferor company, or

(b) another company that as a result of the transaction ceases to be a member of the same group as the transferee company.

Relief not withdrawn in case of winding-up

3 (1) Section 111 does not apply if the transferee company ceases to be a member of the same group as the transferor company by reason of anything done for the purposes of, or in the course of, winding up the transferor company or another company that is above the transferor company in the group structure.

(2) For the purposes of this paragraph a company is "above" the transferor company in the group structure if it is the parent (within the meaning of the relevant group relief provision)--

(a) of the transferor company, or

(b) of another company that is above the transferor company in the group structure.

Relief not withdrawn in case of exempt acquisition

4 (1) Section 111 does not apply if--

(a) the transferee company ceases to be a member of the same group as the transferor company as a result of an acquisition of shares by another company ("the parent company") in relation to which acquisition relief applies, and

(b) the transferee company is immediately after that acquisition a member of the same group as the parent company ("the new group").

(2) For this purpose--

(a) "acquisition relief" means relief under section 75 of the Finance Act 1986 (c. 41); and

(b) references to an acquisition in relation to which such relief applies are to an acquisition such that an instrument effecting the transfer of the shares is exempt from stamp duty by virtue of that provision.

(3) But if before the end of the period of two years beginning with the date on which the relevant instrument was executed--

(a) the transferee company ceases to be a member of the new group, and

(b) at the time when it ceases to be a member of the new group it holds an estate or interest in land that--

(i) was transferred to it by the relevant instrument, or

(ii) is derived from an estate or interest that was so transferred,

and that was not subsequently transferred to it by a duly stamped instrument for which group relief was not claimed,

section 111 and the provisions of this Schedule apply as if the company had then ceased to be a member of the same group as the transferor company.

Interest

5 (1) If any duty payable under section 111 is not paid within the period of 30 days within which payment is to be made, interest is payable on the amount remaining unpaid.

(2) The provisions of section 15A(3) to (5) of the Stamp Act 1891 (c. 39) (rate of interest on unpaid duty, etc) apply in relation to interest under sub-paragraph (1).

Duty of transferee company to notify particulars

6 (1) The transferee company shall, within the period of 30 days mentioned in section 111(2)(b) within which payment is to be made, notify the Commissioners of--

(a) the date on which it ceased to be a member of the same group as the transferor company,

(b) the relevant land held by it at that time,

(c) the nature of the relevant instrument, the date on which it was executed, the parties to the instrument and the date on which the instrument was stamped,

(d) the market value of the land transferred to it by the relevant instrument at the date on which that instrument was executed, and

(e) the amount of duty and interest payable by it under section 111 or this Schedule.

(2) In sub-paragraph (1)(b) the "relevant land" held by the transferee company means every estate or interest to in relation to which section 111(1)(c) applies.

(3) In section 98(5) of the Taxes Management Act 1970 (c. 9) (penalty for failure to provide information), in the second column of the Table, at the appropriate place insert "paragraph 6 of Schedule 34 to the Finance Act 2002".

Determination, collection and recovery of duty and interest

7 The provisions of regulations under section 98 of the Finance Act 1986 (c. 41) (stamp duty reserve tax: administration etc), and the provisions of the Taxes Management Act 1970 (c. 9) applied by those regulations, have effect with the necessary modifications in relation to--

(a) the determination by the Commissioners of the duty payable under section 111 or the interest payable thereon,

(b) appeals against any such determination, and

as if it were an amount of stamp duty reserve tax.

Recovery of group relief from from another group company or controlling director

8 (1) This paragraph applies where--

(a) an amount is payable under section 111 or this Schedule by the transferee company,

(b) a notice of determination of the amount payable has been issued by the Commissioners, and

(2) The following persons may, by notice under paragraph 9, be required to pay the unpaid amount--

(a) the transferor company;

(b) any company that, at any relevant time, was a member of the same group as the transferee company and was above it in the group structure;

(c) any person who at any relevant time was a controlling director of the transferee company or of a company having control of the transferee company.

(3) For the purposes of this paragraph--

(a) a "relevant time" means any time between the execution of the relevant instrument and the transferee company ceasing to be a member of the same group as the transferor company;

(b) a company is "above" another company in a group structure if it is the parent (within the meaning of the relevant group relief provision)--

(i) of that company, or

(ii) of another company that is above that company in the group structure.

(4) In this paragraph--

"director", in relation to a company, has the meaning given by section 168(8) of the Taxes Act 1988 (read with subsection (9) of that section) and includes any person falling within section 417(5) of that Act (read with subsection (6) of that section); and
- "controlling director", in relation to a company, means a director of the company who has control of it (construing control in accordance with section 416 of the Taxes Act 1988).

Recovery of group relief from another group company or controlling director: procedure and time limit

9 (1) The Commissioners may serve a notice on a person within paragraph 8(2) requiring him, within 30 days of the service of the notice, to pay the amount that remains unpaid.

(2) Any notice under this paragraph must be served before the end of the period of three years beginning with the date on which the notice of determination mentioned in paragraph 8(1)(b) is issued.

(3) The notice must state the amount required to be paid by the person on whom the notice is served.

(4) The notice has effect--

(a) for the purposes of the recovery from that person of the amount required to be paid and of interest on that amount, and

(b) for the purposes of appeals,

as if it were a notice of determination and that amount were an amount of stamp duty reserve tax due from that person.

(5) A person who has paid an amount in pursuance of a notice under this paragraph may recover that amount from the transferee company.

(6) A payment in pursuance of a notice under this paragraph is not allowed as a deduction in computing any income, profits or losses for any tax purposes.

Power to require information

10 (1) The Commissioners may by notice require any person to furnish them within such time, not being less than 30 days, as may be specified in the notice with such information (including documents or records) as the Commissioners may reasonably require for the purposes of section 111 or this Schedule.

(2) A barrister or solicitor shall not be obliged in pursuance of a notice under this paragraph to disclose, without his client's consent, any information with respect to which a claim to professional privilege could be maintained.

(3) In section 98(5) of the Taxes Management Act 1970 (c. 9) (penalty for failure to comply with notice to provide information), in the first column of the Table, at the appropriate place insert "paragraph 10 of Schedule 34 to the Finance Act 2002".

Supplementary

11 Section 111 and this Schedule shall be construed as one with the Stamp Act 1891 (c. 39).

Section 113

SCHEDULE 35 Stamp duty: withdrawal of relief for company acquisitions: supplementary provisions

Introduction

1 (1) The provisions of this Schedule supplement section 113 (withdrawal of relief under s.76 of the Finance Act 1986 (c. 41)).

(2) Expressions used in this Schedule that are defined for the purposes of that section have the same meaning in this Schedule.

Change of control due to exempt transfer

2 Section 113 does not apply by reason of control of the acquiring company changing as a result of any of the transactions listed in the Schedule to the Stamp Duty (Exempt Instruments) Regulations 1987 (S.I. 1987/516).

Change of control due to intra-group transfer

3 (1) Section 113 does not apply by reason of control of the acquiring company changing as a result of a transfer of shares ("the intra-group transfer") in relation to which group relief applies.

(2) In this paragraph--

(a) "group relief" means relief under section 42 of the Finance Act 1930 (c. 28) or section 11 of the Finance Act (Northern Ireland) 1954 (c. 23 (N.I.)) (transfer of property between associated bodies corporate); and

(b) references to a transfer in relation to which group relief applies are to a transfer such that an instrument effecting the transfer is exempt from stamp duty by virtue of either of the group relief provisions.

(3) But if before the end of the period of two years beginning with the date on which the relevant instrument was executed--

(a) a company ("company B") holding shares in the acquiring company to which the intra-group share transfer related, or that are derived from shares to which that instrument related, ceases to be a member of the same group as the company referred to in section 76 as the target company ("company C"), and

(b) the acquiring company, at that time, holds an estate or interest in land--

(i) that was transferred to it by the relevant instrument, or

(ii) that is derived from an estate or interest so transferred,

and that was not subsequently transferred to it by a duly stamped instrument on which ad valorem duty was paid and in relation to which section 76 relief was not claimed,

the following provisions apply.

(4) In those circumstances--

(a) section 76 relief in relation to the relevant instrument (or an appropriate proportion of that relief) is withdrawn, and

(b) the additional stamp duty that would have been paid on stamping the relevant instrument but for that relief if the land in question had been transferred by that instrument at market value, or an appropriate proportion of that amount, is payable by the acquiring company within 30 days after company B ceases to be a member of the same group as company C.

(5) In this paragraph--

(a) "company" includes any body corporate; and

(b) references to a company being in the same group as another company are to the companies being associated bodies corporate within the meaning of the relevant group relief provision.

Change of control due to exempt share acquisition

4 (1) Section 113 does not apply by reason of control of the acquiring company changing as a result of a transfer of shares ("the exempt transfer") to another company ("the parent company") in relation to which share acquisition relief applies.

(2) For this purpose--

(a) "share acquisition relief" means relief under section 77 of the Finance Act 1986 (c. 41); and

(b) references to a transfer in relation to which such relief applies are to a transfer such that an instrument effecting the transfer is exempt from stamp duty by virtue of that provision.

(3) But if before the end of the period of two years beginning with the date on which the relevant instrument was executed--

(a) control of the parent company changes at a time when that company holds any shares transferred to it by the exempt transfer, or any shares derived from shares so transferred, and

(b) the acquiring company, at that time, holds an estate or interest in land--

(i) that was transferred to it by the relevant instrument, or

(ii) that is derived from an estate or interest so transferred,

and that was not subsequently transferred to it by a duly stamped instrument on which ad valorem duty was paid and in relation to which section 76 relief was not claimed,

the following provisions apply.

(4) In those circumstances--

(a) section 76 relief in relation to the relevant instrument (or an appropriate proportion of that relief) is withdrawn, and

(b) the additional stamp duty that would have been paid on stamping the relevant instrument but for that relief if the land in question had been transferred by that instrument at market value, or an appropriate proportion of that additional duty, is payable by the acquiring company within 30 days after control of the parent company changed.

Change of control due to interest of loan creditor

5 (1) Section 113 does not apply by reason of control of the acquiring company changing as a result of a loan creditor becoming, or ceasing to be, treated as having control of the company if the other persons who were previously treated as controlling the company continue to be so treated.

(2) In sub-paragraph (1) "loan creditor" has the meaning given by section 417(7) to (9) of the Taxes Act 1988.

Interest

6 (1) If any duty payable under section 113 or this Schedule is not paid within the period of 30 days within which payment is to be made, interest is payable on the amount remaining unpaid.

(2) The provisions of section 15A(3) to (5) of the Stamp Act 1891 (c. 39) (rate of interest on unpaid duty, etc) apply in relation to interest under this paragraph.

Duty of acquiring company to notify particulars

7 (1) The acquiring company shall, within the period of 30 days within which payment is to be made, notify the Commissioners of--

(a) the date on which the event occured by reason of which it is liable to make a payment of duty under section 113 or this Schedule,

(b) the relevant land held by it at that time,

(c) the nature of the relevant instrument, the date on which it was executed, the parties to the instrument and the date on which the instrument was stamped,

(d) the market value of the land transferred to it by the relevant instrument at the date it was executed, and

(e) the amount of duty and interest payable by it.

(2) In sub-paragraph (1)(b) the "relevant land" held by the acquiring company means every estate or interest to in relation to which section 113(1)(c) applies.

Determination, collection and recovery of duty and interest

8 The provisions of regulations under section 98 of the Finance Act 1986 (c. 41) (stamp duty reserve tax: administration etc), and the provisions of the Taxes Management Act 1970 applied by those regulations, have effect with the necessary modifications in relation to--

(a) the determination by the Commissioners of the duty payable under section 113 or this Schedule, or of the interest payable thereon,

(b) appeals against any such determination, and

as if it were an amount of stamp duty reserve tax.

Recovery of section 76 relief from from another group company or controlling director

9 (1) This paragraph applies where--

(a) an amount is payable under section 113 or this Schedule by the acquiring company,

(b) a notice of determination of the amount payable has been issued by the Inland Revenue, and

(2) The following persons may, by notice under paragraph 10, be required to pay the unpaid amount--

(a) any company that at any relevant time was a member of the same group as the acquiring company and was above it in the group structure, and

(b) any person who at any relevant time was a controlling director of the acquiring company or of a company having control of the acquiring company.

(3) For this purpose a "relevant time" means any time between the execution of the relevant instrument and the change of control by virtue of which the liability to pay the amount arises.

(4) In this paragraph--

(a) references to companies being in the same group are to one company having control of the other or both companies being under the control of the same person or persons;

(b) a company is "above" another company in a group structure if it controls--

(i) that company, or

(ii) another company that is above that company in the group structure;

(c) "director", in relation to a company, has the meaning given by section 168(8) of the Taxes Act 1988 (read with subsection (9) of that section) and includes any person falling within section 417(5) of that Act (read with subsection (6) of that section); and

(d) "controlling director", in relation to a company, means a director of the company who has control of it.

Recovery of section 76 relief from another group company or controlling director: procedure and time limit

10 (1) The Commissoners may serve a notice on a person within paragraph 9(2) requiring him, within 30 days of the service of the notice, to pay the amount that remains unpaid.

(2) A notice under this paragraph must be served before the end of the period of three years beginning with the date on which the notice of determination mentioned in paragraph 9(1)(b) is issued.

(3) The notice must state the amount required to be paid by the person on whom the notice is served.

(4) The notice has effect--

(a) for the purposes of the recovery from that person of the amount required to be paid and of interest on that amount, and

(b) for the purposes of appeals,

as if it were a notice of determination and that amount were an amount of stamp duty reserve tax due from that person.

(5) A person who has paid an amount in pursuance of a notice under this paragraph may recover that amount from the acquiring company.

(6) A payment in pursuance of a notice under this paragraph is not allowed as a deduction in computing any income, profits or losses for any tax purposes.

Power to require information

11 (1) The Commissioners may by notice require any person to furnish them within such time, not being less than 30 days, as may be specified in the notice with such information (including documents or records) as the Commissioners may reasonably require for the purposes of section 113 or this Schedule.

Supplementary

12 Section 113 and this Schedule shall be construed as one with the Stamp Act 1891 (c. 39).

Section 115(7)

SCHEDULE 36 Stamp duty: contracts chargeable as conveyances: supplementary provisions

Part 1 Subsales

Introduction

1 This Part of this Schedule has effect for affording relief from duty under section 115 (contracts chargeable as conveyances) on a subsale.

Meaning of "subsale"

2 For the purposes of this Schedule there is a subsale--

(a) where the purchaser under a contract or agreement for the sale of an estate or interest in land in the United Kingdom ("the original sale"), without having obtained a conveyance of the property contracted to be sold, contracts to sell the whole or part of the property to another person, or

(b) where the sub-purchaser under a subsale of an estate or interest in land in the United Kingdom, without having obtained a conveyance of the property contracted to be sold, contracts to sell to another person the whole or part of the property contracted to be sold by the original sale,

so as to entitle that person to call for a conveyance from the original seller.

Relief where duty paid on original sale or earlier subsale

3 (1) Where duty under section 115 has been paid--

(a) on the original sale, or

(b) on an intervening subsale,

duty under that section on a subsale, or subsequent subsale, is chargeable only in respect of the amount (if any) by which the chargeable consideration on that transaction exceeds the chargeable consideration on the earlier transaction.

(2) If there is more than one such earlier transaction on which duty has been paid, the reference in sub-paragraph (1) to the chargeable consideration on the earlier transaction shall be read as a reference to the higher or highest amount of chargeable consideration on which duty has been paid.

(3) If the subsale does not relate to the whole of the property to which the earlier transaction related, the references in sub-paragraphs (1) and (2) to the chargeable consideration on an earlier transaction shall be read as references to an appropriate proportion of that consideration.

(4) What is an appropriate proportion shall be determined on a just and reasonable basis having regard to the subject matter of the subsale and of the earlier transaction.

(5) For the purposes of this paragraph the chargeable consideration on a transaction is the consideration that falls to be brought into account in determining the duty chargeable on it.

(6) Where under this paragraph duty on a subsale is chargeable in respect of part only of the consideration for the subsale, it is chargeable at the rate that would be applicable if the whole of the chargeable consideration on the subsale were taken into account.

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