Finance Act 2003 (c. 14)

(The document as of February, 2008)

-- Back --

Page 21

Pages: P.1 | P.2 | P.3 | P.4 | P.5 | P.6 | P.7 | P.8 | P.9 | P.10 | P.11 | P.12 | P.13 | P.14 | P.15 | P.16 | P.17 | P.18 | P.19 | P.20 | P.21 | P.22 | P.23 | P.24 | P.25 | P.26 | P.27 | P.28 | P.29 | P.30 | P.31 | P.32 | P.33 | P.34 | P.35 | P.36 | P.37 | P.38 | P.39

(a) imposing the penalty, and

(b) setting it at such amount as in the officer's opinion is correct or appropriate.

(2) Notice of the determination must be served on the person liable to the penalty.

(3) The notice must also state--

(a) the date on which the notice is issued, and

(b) the time within which an appeal against the determination may be made.

(4) A penalty determined under this paragraph is due and payable at the end of the period of 30 days beginning with the date of issue of the notice of determination.

(5) Where an officer of the Board has decided to impose a penalty, and has taken all other decisions needed for arriving at the amount of the penalty, he may entrust to any other officer of the Board responsibility for completing the determination procedure, whether by means involving the use of a computer or otherwise, including responsibility for serving notice of the determination.

Alteration of penalty determination

3 (1) After notice has been served of the determination of a penalty, the determination cannot be altered except in accordance with this paragraph or on appeal.

(2) If it is discovered by an authorised officer that the amount of the penalty is or has become insufficient, the officer may make a determination in a further amount so that the penalty is set at the amount which in the officer's opinion is correct or appropriate.

(3) If in the case of a tax-related penalty it is discovered by an authorised officer that the amount taken into account as the amount of tax is or has become excessive, he may revise the determination so that the penalty is set at the amount that is correct.

Where more than the correct amount has already been paid the appropriate amount shall be repaid.

(4) In this paragraph an "authorised officer" means an officer of the Board authorised by the Board for the purposes of this paragraph.

Liability of personal representatives

4 If a person liable to a penalty has died--

(a) any determination that could have been made in relation to that person may be made in relation to his personal representatives, and

(b) any penalty imposed on them is a debt due from and payable out of the person's estate.

Appeal against penalty determination

5 (1) An appeal lies to the General or Special Commissioners against the determination of a penalty.

(2) Notice of appeal must be given in writing to the officer of the Board by whom the determination was made within 30 days of the date of issue of the notice of determination.

(3) The notice of appeal must specify the grounds of appeal, but on the hearing of the appeal the Commissioners may allow the appellant to put forward a ground not specified in the notice of appeal, and take it into consideration, if satisfied that the omission was not deliberate or unreasonable.

(4) On an appeal under this paragraph the Commissioners may--

(a) if it appears to them that no penalty has been incurred, set the determination aside;

(b) if the amount determined appears to them to be appropriate, confirm the determination;

(c) if the amount determined appears to them to be excessive, reduce it to such other amount (including nil) as appears to them to be appropriate;

(d) if the amount determined appears to them to be insufficient, increase it to such amount, not exceeding the permitted maximum, as they consider appropriate.

Further appeal

6 (1) An appeal lies against the amount of a penalty determined by the Commissioners on an appeal under paragraph 5, at the instance of the person liable to the penalty--

(a) to the High Court, or

(b) in Scotland, to the Court of Session sitting as the Court of Exchequer.

(2) On an appeal under this paragraph the court has the same powers as are conferred on the Commissioners by paragraph 5(4) above.

(3) The right of appeal under this paragraph is in addition to any right of appeal conferred by regulations under paragraph 9 of Schedule 17 (general power to provide for appeals on points of law).

Penalty proceedings before the court

7 (1) Where in the opinion of the Board the liability of a person for a penalty arises by reason of his fraud, or the fraud of another person, proceedings for the penalty may be brought--

(a) in the High Court, or

(b) in Scotland, in the Court of Session sitting as the Court of Exchequer.

(2) Proceedings under this paragraph in England and Wales shall be brought--

(a) by and in the name of the Board as an authorised department for the purposes of the Crown Proceedings Act 1947 (c. 44), or

(b) in the name of the Attorney General.

Any such proceedings shall be deemed to be civil proceedings by the Crown within the meaning of Part 2 of the Crown Proceedings Act 1947.

(3) Proceedings under this paragraph in Scotland shall be brought in the name of the Advocate General for Scotland.

(4) Proceedings under this paragraph in Northern Ireland shall be brought--

(a) by and in the name of the Board as an authorised department for the purposes of the Crown Proceedings Act 1947 as for the time being in force in Northern Ireland, or

(b) in the name of the Advocate General for Northern Ireland.

Any such proceedings shall be deemed to be civil proceedings within the meaning of Part 2 of the Crown Proceedings Act 1947 as for the time being in force in Northern Ireland.

(5) If in proceedings under this paragraph the court does not find that fraud is proved but considers that the person concerned is nevertheless liable to a penalty, the court may determine a penalty notwithstanding that, but for the opinion of the Board as to fraud, the penalty would not have been a matter for the court.

(6) Paragraph 2 (determination of penalty by officer of the Board) does not apply where proceedings are brought under this paragraph.

(7) In relation to any time before the coming into force of section 2(1) of the Justice (Northern Ireland) Act 2002 (c. 26), the reference in sub-paragraph (4)(b) to the Advocate General for Northern Ireland shall be read as a reference to the Attorney General for Northern Ireland.

Time limit for determination of penalties

8 (1) The following time limits apply in relation to the determination of penalties under this Schedule.

(2) The general rule is that--

(a) no penalty may be determined under paragraph 2 (determination by officer of Board), and

(b) no proceedings for a penalty may be brought under paragraph 7 (penalty proceedings before the court),

more than six years after the date on which the penalty was incurred or, in the case of a daily penalty, began to be incurred.

This rule is subject to the following provisions of this paragraph.

(3) Where the amount of a penalty is to be ascertained by reference to the tax chargeable in respect of a transaction, a penalty may be determined under paragraph 2, or proceedings for a penalty may be begun under paragraph 7, at any time within three years after the final determination of the amount of tax by reference to which the amount of the penalty is to be determined.

(4) Sub-paragraph (3) does not apply where a person has died and the determination would be made in relation to his personal representatives if the tax was charged in an assessment made more than six years after the effective date of the transaction to which it relates.

(5) A penalty under section 96 (penalty for assisting in preparation of incorrect return) may be determined by an officer of the Board, or proceedings for such a penalty may be commenced before a court, at any time within 20 years after the date on which the penalty was incurred.

Section 104

SCHEDULE 15 Stamp duty land tax: partnerships

Part 1 General provisions

Partnerships

1 In this Part of this Act a "partnership" means--

(a) a partnership within the Partnership Act 1890 (c. 39),

(b) a limited partnership registered under the Limited Partnerships Act 1907 (c. 24), or

(c) a limited liability partnership formed under the Limited Liability Partnerships Act 2000 (c. 12) or the Limited Liability Partnerships Act (Northern Ireland) 2002 (c. 12 (N. I.)),

or a firm or entity of a similar character to any of those mentioned above formed under the law of a country or territory outside the United Kingdom.

Legal personality of partnership disregarded

2 (1) For the purposes of this Part of this Act--

(a) a chargeable interest held by or on behalf of a partnership is treated as held by or on behalf of the partners, and

(b) a land transaction entered into for the purposes of a partnership is treated as entered into by or on behalf of the partners,

and not by or on behalf of the partnership as such.

(2) Sub-paragraph (1) applies notwithstanding that the partnership is regarded as a legal person, or as a body corporate, under the law of the country or territory under which it is formed.

Continuity of partnership

3 For the purposes of this Part of this Act a partnership is treated as the same partnership notwithstanding a change in membership if any person who was a member before the change remains a member after the change.

Partnership not to be regarded as unit trust scheme etc

4 A partnership is not to be regarded for the purposes of this Part of this Act as a unit trust scheme or an open ended investment company.

Part 2 Ordinary partnership transactions

Introduction

5 (1) This Part of this Schedule applies to transactions entered into as purchaser by or on behalf of the members of a partnership, other than transactions within Part 3 of this Schedule (transactions excluded from stamp duty land tax).

Responsibility of partners

6 (1) Anything required or authorised to be done under this Part of this Act by or in relation to the purchaser under the transaction is required or authorised to be done by or in relation to all the responsible partners.

(2) The responsible partners in relation to a transaction are--

(a) the persons who are partners at the effective date of the transaction, and

(b) any person who becomes a member of the partnership after the effective date of the transaction.

(3) This paragraph has effect subject to paragraph 8 (representative partners).

Joint and several liability of responsible partners

7 (1) Where the responsible partners are liable--

(a) to make a payment of tax or to interest on unpaid tax,

(b) to make a payment in accordance with an assessment under paragraph 29 of Schedule 10 (recovery of excessive repayment), or

the liability is a joint and several liability of those partners.

(2) No amount may be recovered by virtue of sub-paragraph (1)(c) from a person who did not become a responsible partner until after the relevant time.

(3) The relevant time for this purpose is--

(a) in relation to so much of a penalty as is payable in respect of any day, or to interest on so much of a penalty as is so payable, the beginning of that day;

(b) in relation to any other penalty, or interest on such a penalty, the time when the act or omission occurred that caused the penalty to become payable.

Representative partners

8 (1) Anything required or authorised to be done by or in relation to the responsible partners may instead be done by or in relation to any representative partner or partners.

(2) This includes making the declaration required by paragraph 1(1)(c) of Schedule 10 or paragraph 2(1)(c) of Schedule 11 (declaration that return or self-certificate is complete and correct).

(3) A representative partner means a partner nominated by a majority of the partners to act as the representative of the partnership for the purposes of this Part of this Act.

(4) Any such nomination, or the revocation of such a nomination, has effect only after notice of the nomination, or revocation, has been given to the Inland Revenue.

Part 3 Transactions excluded from stamp duty land tax

Introduction

9 (1) This Part of this Schedule excludes from stamp duty land tax--

(a) the transfer of an interest in land into a partnership (paragraph 10),

(b) the acquisition of an interest in a partnership (paragraph 11), or

(2) In this Part of this Schedule--

(a) references to an interest in land include any interest or right that would be a chargeable interest but for being excluded from stamp duty land tax, and

(b) references to the transfer of an interest in land include--

(i) the grant or creation of an interest in land,

(ii) the variation of an interest in land, and

(iii) the surrender or release of an interest in land.

Transfer of interest in land into a partnership

10 (1) This paragraph applies to a transaction by which--

(a) a partner transfers an interest in land to a partnership, or

(b) a person transfers an interest in land to a partnership in return for an interest in the partnership,

whether in connection with the formation of the partnership or in a case where the partnership already exists.

(2) There is a transfer of an interest in land to a partnership in any case where an interest in land that was not partnership property becomes partnership property.

(3) A transaction to which this paragraph applies is excluded from stamp duty land tax.

Acquisition of partnership interest

11 An acquisition of an interest in a partnership is excluded from stamp duty land tax.

Transfer of interest in land out of a partnership

12 (1) This paragraph applies to a transaction by which an interest in land is transferred from a partnership to a person in consideration of his ceasing to be a member of the partnership or reducing his interest in the partnership.

(2) There is a transfer of an interest in land from a partnership in any case where an interest in land that was partnership property ceases to be partnership property.

(3) For the purposes of this paragraph property that was partnership property before the partnership was dissolved or otherwise ceased to exist shall be treated as remaining partnership property until it is distributed.

(4) A transaction to which this paragraph applies is excluded from stamp duty land tax.

Effect of exclusion of transaction from stamp duty land tax

13 (1) A transaction that is excluded from stamp duty land tax by this Part of this Schedule shall be treated for the purposes of this Part of this Act as if it were not a land transaction.

(2) Nothing in section 125 (abolition of stamp duty except in relation to stock or marketable securities), or in Part 2 of Schedule 20 (amendments and repeals consequential on that section), affects the application of the enactments relating to stamp duty in relation to an instrument effecting a transaction that is excluded from stamp duty land tax by this Part of this Schedule.

(3) In Part 1 of Schedule 20 (provisions supplementing that section) references to stock or marketable securities shall be read as including any property that is the subject-matter of a transaction excluded from stamp duty land tax by this Part of this Schedule.

Construction of references to partnership property

14 Any reference in this Part of this Schedule to partnership property is to an interest or right held by or on behalf of a partnership, or the members of a partnership, for the purposes of the partnership business.

Section 105

SCHEDULE 16 Stamp duty land tax: trusts and powers

Meaning of "settlement" and "bare trust"

1 (1) In this Part "settlement" means a trust that is not a bare trust.

(2) In this Part a "bare trust" means a trust under which property is held by a person as trustee--

(a) for a person who is absolutely entitled as against the trustee, or who would be so entitled but for being a minor or other person under a disability, or

(b) for two or more persons who are or would be jointly so entitled,

and includes a case in which a person holds property as nominee for another.

(3) In sub-paragraph (2)(a) and (b) the references to a person being absolutely entitled to property as against the trustee are references to a case where the person has the exclusive right, subject only to satisfying any outstanding charge, lien or other right of the trustee, to resort to the property for payment of duty, taxes, costs or other outgoings or to direct how the property is to be dealt with.

(4) In sub-paragraph (2) "minor", in relation to Scotland, means a person under legal disability by reason of nonage.

Interests of beneficiaries under certain trusts

2 Where property is held in trust under the law of Scotland, or of a country or territory outside the United Kingdom, on terms such that, if the trust had effect under the law of England and Wales, a beneficiary would be regarded as having an equitable interest in the trust property--

(a) that beneficiary shall be treated for the purposes of this Part as having such an interest notwithstanding that no such interest is recognised by the law of Scotland or, as the case may be, the country or territory outside the United Kingdom, and

(b) an acquisition of the interest of a beneficiary under the trust shall accordingly be treated as involving the acquisition of an interest in the trust property.

Acquisition etc by bare trustee attributed to beneficial owner

3 Where a person acquires a chargeable interest as bare trustee, this Part applies as if the interest were vested in, and the acts of the trustee in relation to it were the acts of, the person or persons for whom he is trustee.

Acquisition by trustees of settlement

4 Where persons acquire a chargeable interest as trustees of a settlement, they are treated for the purposes of this Part, as it applies in relation to that acquisition, as purchasers of the whole of the interest acquired (including the beneficial interest).

Responsibility of trustees of settlement

5 (1) Where the trustees of a settlement are liable--

(a) to make a payment of tax or interest on unpaid tax,

(b) to make a payment in accordance with an assessment under paragraph 29 of Schedule 10 (recovery of excessive repayment), or

the payment, penalty or interest may be recovered (but only once) from any one or more of the responsible trustees.

(2) No amount may be recovered by virtue of sub-paragraph (1)(c) from a person who did not become a responsible trustee until after the relevant time.

(3) The responsible trustees, in relation to a land transaction, are the persons who are trustees at the effective date of the transaction and any person who subsequently becomes a trustee.

(4) The relevant time for this purpose is--

(a) in relation to so much of a penalty as is payable in respect of any day, or to interest on so much of a penalty as is so payable, the beginning of that day;

(b) in relation to any other penalty, or interest on such a penalty, the time when the act or omission occurred that caused the penalty to become payable.

Relevant trustees for purposes of return etc

6 (1) A return or self-certificate in relation to a land transaction may be made or given by any one or more of the trustees who are the responsible trustees in relation to the transaction.

The trustees by whom such a return or self-certificate is made are referred to below as "the relevant trustees".

(2) The declaration required by paragraph 1(1)(c) of Schedule 10 or paragraph 2(1)(c) of Schedule 11 (declaration that return or self-certificate is complete and correct) must be made by all the relevant trustees.

(3) If the Inland Revenue give notice of an enquiry into the return or self-certificate--

(a) the notice must be given to each of the relevant trustees,

(b) the powers of the Inland Revenue as to the production of documents and provision of information for the purposes of the enquiry are exercisable separately (and differently) in relation to each of the relevant trustees,

(c) any of the relevant trustees may apply for a direction that a closure notice be given (and all of them are entitled to appear and be heard on the application), and

(d) the closure notice must be given to each of the relevant trustees.

Provided that a notice is not invalidated by virtue of paragraph (a) or (d) if it is given to each of the relevant trustees whose identity is known to the Inland Revenue.

(4) A Revenue determination or discovery assessment relating to the transaction must be made against all of the relevant trustees and is not effective against any of them unless notice of it is given to each of them whose identity is known to the Inland Revenue.

(5) In the case of an appeal arising from proceedings under this Part relating to the transaction--

(a) the appeal may be brought by any of the relevant trustees,

(b) notice of the appeal must be given to any of them by whom it is not brought,

(d) if it is not settled, any of them are entitled to appear and be heard, and

(e) the decision on the appeal binds all of them.

Consideration for exercise of power of appointment or discretion

7 Where a chargeable interest is acquired by virtue of--

(a) the exercise of a power of appointment, or

(b) the exercise of a discretion vested in trustees of a settlement,

there shall be treated as consideration for the acquisition of the interest or right by virtue of the exercise of the power or discretion any consideration given for the person in whose favour the appointment was made or the discretion was exercised becoming an object of the power or discretion.

Section 115

SCHEDULE 17 Stamp duty land tax: General and Special Commissioners, appeals and other proceedings

General and Special Commissioners: application of general provisions

1 Part 1 of the Taxes Management Act 1970 (c. 9) (administration) has effect as if this Part of this Act were part of the Taxes Acts.

Prescribed matters to be determined by Commissioners or Lands Tribunal

2 (1) The Lord Chancellor may make regulations providing that a question, dispute, appeal or other matter that is of a prescribed description and arises in relation to the provisions of this Part is to be determined--

(a) by the General Commissioners,

(b) by the Special Commissioners,

(d) by the relevant Lands Tribunal.

(2) In this paragraph--

"prescribed" means prescribed in regulations under this paragraph;
"relevant Lands Tribunal" means--
(a)
in relation to land in England and Wales, the Lands Tribunal;
(b)
in relation to land in Scotland, the Lands Tribunal for Scotland;
(c)
in relation to land in Northern Ireland, the Lands Tribunal for Northern Ireland.

General or Special Commissioners: jurisdiction

3 (1) Where the General or Special Commissioners have jurisdiction in respect of a matter, the Lord Chancellor may make regulations for determining--

(a) whether the General or Special Commissioners, or both of them, are to have the jurisdiction, and

(b) if both of them are to have the jurisdiction, how it is to be divided between them.

(2) Where the General Commissioners have jurisdiction in respect of a matter, the General Commissioners for that division which is determined in accordance with regulations made by the Lord Chancellor under this paragraph are to have the jurisdiction.

(3) The Lord Chancellor may make regulations--

(a) providing that, in certain circumstances, the Special Commissioners are to have jurisdiction in respect of a matter instead of the General Commissioners or the General Commissioners are to have jurisdiction instead of the Special Commissioners;

(b) providing that, in certain circumstances, the General Commissioners for one division are have to jurisdiction in respect of a matter instead of the General Commissioners for another division.

Proceedings brought out of time

4 (1) An appeal under this Part to the General or Special Commissioners may be brought out of time with the consent in writing of an officer of the Board or the Board.

(2) Consent shall be given if the officer or, as the case may be, the Board are satisfied--

(a) that there was a reasonable excuse for not bringing the appeal within the time limit, and

(b) that an application for consent was made without unreasonable delay.

(3) If the officer or, as the case may be, the Board are not so satisfied, they shall refer the matter for determination by the Commissioners.

(4) If there is a right to elect to bring the appeal before the Special Commissioners instead of before the General Commissioners, the Commissioners to whom an application under this paragraph is to be referred are the General Commissioners, unless the election has been made before the application is referred.

Quorum etc of the Commissioners

5 The Lord Chancellor may make regulations about the number of General or Special Commissioners required or permitted to perform functions in relation to a relevant matter.

Procedure

6 (1) The Lord Chancellor may make regulations about the practice and procedure to be followed in connection with matters in respect of which the Special or General Commissioners have jurisdiction.

(2) The regulations may, in particular, include provision--

(a) enabling the Commissioners to join as a party to the proceedings a person who would not otherwise be a party;

(b) for requiring a party to the proceedings to provide information and make documents available for inspection by--

(i) the Commissioners,

(ii) any party to the proceedings, or

(iii) an officer of the Board;

(d) as to evidence generally in relation to proceedings;

(e) enabling the Commissioners to review their decisions;

(f) for the imposition of penalties not exceeding an amount specified in the regulations;

(g) for the determination and recovery of penalties imposed by virtue of paragraph (f) and for appeals against such penalties.

Consequences of determination by the Commissioners

7 The Lord Chancellor may make regulations prescribing the consequences of any determination by the General or Special Commissioners in respect of a relevant matter.

Costs

8 The Lord Chancellor may make regulations about--

(a) the award by the General or Special Commissioners of the costs of, or incidental to, a determination by them in respect of a relevant matter;

(b) the recovery of costs so awarded.

Finality of decisions of the Commissioners

9 (1) The Lord Chancellor may make regulations about the following matters--

(a) the circumstances in which--

(i) a determination by the General or Special Commissioners in respect of a relevant matter, or

(ii) an award of costs under regulations under paragraph 8,

may or may not be questioned;

-- Back --

Stat