Finance Act 2003 (c. 14)

(The document as of February, 2008)

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may or may not be questioned;

(b) if a determination or award may be questioned, how it may be questioned.

(2) The regulations may--

(a) authorise or require the Commissioners, in circumstances specified in the regulations, to state a case for the opinion of a court;

(b) make provision as to the practice and procedure to be followed in connection with cases so stated;

(c) make provision in relation to cases so stated corresponding to any provision made by section 56 of the Taxes Management Act 1970 (c. 9) (statement of case for opinion of High Court) or by that section as modified in its application to Northern Ireland by section 58 of that Act.

(3) The regulations may--

(a) provide for an appeal to lie to a court on a question of law arising from a decision of the Commissioners;

(b) make provision as to the practice and procedure to be followed in connection with such appeals;

(c) make provision in relation to such appeals corresponding to any provision made by section 56A of the Taxes Management Act 1970 (c. 9) (appeals from the Special Commissioners) or by that section as modified in its application to Northern Ireland by section 58 of that Act.

Publication of reports of decisions

10 (1) The Lord Chancellor may make regulations authorising the Special Commissioners to publish reports of such of their decisions as they consider appropriate.

(2) The regulations shall provide that any report published that is not a report of proceedings heard in public must be in a form that so far as possible prevents the identification of any person whose affairs are dealt with in the report.

(3) No obligation of secrecy to which the Special Commissioners are subject prevents their publishing reports of their decisions in accordance with provision made by virtue of this paragraph.

Supplementary provisions

11 (1) Any power to make regulations under this Schedule is exercisable only with the consent of the Scottish Ministers.

(2) Regulations under this Schedule shall be made by statutory instrument which shall be subject to annulment in pursuance of a resolution of either House of Parliament.

(3) Regulations under this Schedule may--

(a) apply any other enactment, with or without modifications;

(b) make different provision for different cases or different circumstances;

(c) contain such supplementary, incidental, consequential and transitional provision as the Lord Chancellor thinks appropriate.

(4) In this Schedule--

(a) "relevant matter", in relation to the General or Special Commissioners, means a matter in respect of which they have jurisdiction;

(b) references to the provisions of this Part include any instrument made under such a provision;

(c) references to the General or Special Commissioners having jurisdiction are to the Commissioners having jurisdiction by virtue of the provisions of this Part;

(d) references to the General or Special Commissioners having jurisdiction in respect of a matter include cases where a question, dispute, appeal or other matter that arises in relation to the provisions of this Part is to be determined by the Commissioners.

Section 123

SCHEDULE 18 Stamp duty land tax: consequential amendments

Provisional Collection of Taxes Act 1968

1 In section 1(1) of the Provisional Collection of Taxes Act 1968 (c. 2), after "stamp duty reserve tax," insert "stamp duty land tax,".

Inheritance Tax Act 1984

2 In section 190(4) of the Inheritance Tax Act 1984 (c. 51) (sale of land from deceased's estate: determination of price), after "stamp duty" insert "or stamp duty land tax".

Income and Corporation Taxes Act 1988

3 (1) The Income and Corporation Taxes Act 1988 (c. 1) is amended as follows.

(2) In section 209B(4) (hedging arrangements), in subsection (4) for "or stamp duty" substitute "(including stamp duty or stamp duty land tax)".

(3) In section 213 (exempt distributions), in subsection (11)(a) for "stamp duty" substitute "stamp duty or stamp duty land tax".

(4) In section 214 (chargeable payments connected with exempt distributions), in subsection (2) for "stamp duty" substitute "stamp duty or stamp duty land tax".

(5) In section 215 (advance clearance by Board of distributions and payments), in subsection (2) for "stamp duty" substitute "stamp duty or stamp duty land tax".

(6) In section 827 (penalties and interest not allowed as deductions for tax purposes), after subsection (1F) insert--

" (1G) Where a person is liable to make a payment by way of--

(a) any penalty under Part 4 of the Finance Act 2003 (stamp duty land tax), or

(b) interest under any provision of that Part,

the payment shall not be allowed as a deduction in computing any income, profits or losses for any tax purposes. " .

Finance Act 1989

4 In section 178(2) of the Finance Act 1989 (c. 26) (power of Treasury to set rates of interest: enactments to which the section applies), after paragraph (s) add--

" (t) sections 87, 88 and 89 of the Finance Act 2003. " .

Taxation of Chargeable Gains Act 1992

5 In section 38(2) of the Taxation of Chargeable Gains Act 1992 (c. 12) (incidental costs of acquisition or disposal), after "stamp duty" insert "or stamp duty land tax".

Income Tax (Earnings and Pensions) Act 2003

6 In section 277 of the Income Tax (Earnings and Pensions) Act 2003 (c. 1) (removal benefits and expenses: acquisition of property), in subsection (3)(e) after "stamp duty" insert "or stamp duty land tax".

Section 124

SCHEDULE 19 Stamp duty land tax: commencement and transitional provisions

Introduction

1 (1) Subject to the provisions of this Schedule, the provisions of this Part come into force on the passing of this Act.

(2) The following provisions have effect as regards what transactions are SDLT transactions, that is, are chargeable or notifiable or are transactions in relation to which section 79 (registration etc) applies.

(3) Nothing in this Schedule shall be read as meaning that other transactions, whether effected before or after the passing of this Act, are to be disregarded in applying the provisions of this Part.

The implementation date

2 (1) A transaction is not an SDLT transaction unless the effective date of the transaction is on or after the implementation date.

(2) In this Part "the implementation date" means the date appointed by Treasury order as the implementation date for the purposes of stamp duty land tax.

Contract entered into before first relevant date

3 (1) Subject to the following provisions of this paragraph, a transaction is not an SDLT transaction if it is effected in pursuance of a contract entered into before the first relevant date.

(2) The "first relevant date" is the day after the passing of this Act.

(3) The exclusion of transactions effected in pursuance of contracts entered into before the first relevant date does not apply--

(a) if there is any variation of the contract or assignment of rights under the contract on or after that date;

(b) if the transaction is effected in consequence of the exercise after that date of any option, right of pre-emption or similar right;

(c) where the purchaser under the transaction is a person other than the purchaser under the contract because of a further contract made on or after that date.

Contract substantially performed before implementation date

4 (1) This paragraph applies where a transaction--

(a) is completed on or after the implementation date,

(b) is effected in pursuance of a contract entered into and substantially performed before that date, and

(2) The transaction is not an SDLT transaction if the contract was substantially performed before the first relevant date.

(3) In any other case, the fact that the contract was substantially performed before the implementation date does not affect the matter.

Accordingly, the effective date of the transaction is the date of completion.

Credit for ad valorem stamp duty paid

5 (1) Where a transaction chargeable to stamp duty land tax is effected in pursuance of a contract entered into before the implementation date, any ad valorem stamp duty paid on the contract shall go to reduce the amount of tax payable (but not so as to give rise to any repayment).

(2) Where the application or operation of any exemption or relief from stamp duty land tax turns on whether tax was paid or payable in respect of an earlier transaction, that requirement is treated as met if ad valorem stamp duty was paid or (as the case may be) payable in respect of the instrument by which that transaction was effected.

Effect for stamp duty purposes of stamp duty land tax being paid or chargeable

6 (1) Where in the case of a contract that, apart from paragraph 7 of Schedule 13 to the Finance Act 1999 (c. 16) (contracts chargeable as conveyances on sale), would not be chargeable with stamp duty--

(a) a conveyance made in conformity with the contract is effected after the implementation date, and

(b) stamp duty land tax is duly paid in respect of that transaction or no tax is chargeable because of an exemption or relief,

the contract shall be deemed to be duly stamped.

(2) The references in section 111(1)(c) of, and paragraph 4(3) of Schedule 34 to, the Finance Act 2002 (c. 23) (which relate to the circumstances in which stamp duty group relief is withdrawn) to a transfer at market value by a duly stamped instrument on which ad valorem duty was paid and in respect of which group relief was not claimed shall be read, on or after the implementation date, as including a reference to a transfer at market value by a chargeable transaction in respect of which relief under Part 1 of Schedule 7 to this Act was available but was not claimed.

(3) The references in section 113(1)(c) of, and in paragraph 3(3) or 4(3) of Schedule 35 to, the Finance Act 2002 (which relate to the circumstances in which stamp duty company acquisitions relief is withdrawn) to a transfer at market value by a duly stamped instrument on which ad valorem duty was paid and in respect of which section 76 relief was not claimed shall be read, on or after the implementation date, as including a reference to a transfer at market value by a chargeable transaction on which stamp duty land tax was chargeable and in respect of which relief under Part 2 of Schedule 7 to this Act was available but was not claimed.

Earlier related transactions under stamp duty

7 (1) In relation to a transaction that is not an SDLT transaction but which is linked to an SDLT transaction and accordingly falls to be taken into account in determining the rate of stamp duty land tax chargeable on the latter transaction, any reference in this Part to the chargeable consideration for the first-mentioned transaction shall be read as a reference to the consideration by reference to which ad valorem stamp duty was payable in respect of the instrument by which that transaction was effected.

(2) In paragraph 3 of Schedule 9 (relief for transfer of reversion under shared ownership lease where election made for market value treatment) as it applies in a case where the original lease was granted before the implementation date--

(a) the reference to a lease to which paragraph 2 of that Schedule applies shall be read as a reference to a lease to which section 97 of the Finance Act 1980 applied (which made corresponding provision for stamp duty), and

(b) the reference to an election having been made for tax to be charged under that paragraph shall be read accordingly as a reference to a corresponding election having been in relation to stamp duty under that section.

(3) In section 54 (exceptions from deemed market value rule for transactions with connected company) the reference in subsection (4)(b) to group relief having been claimed in respect of a transaction shall be read in relation to a transaction carried out before the implementation date as a reference to relief having been claimed under section 42 of the Finance Act 1930 (c. 28), section 11 of the Finance Act (Northern Ireland) 1954 (c. 23 (N. I.)) or section 151 of the Finance Act 1995 (c. 4) in respect of stamp duty on the instrument by which the transaction was effected.

Time for stamping agreement for lease: lease subject to stamp duty land tax

8 (1) This paragraph makes provision corresponding to section 240 of the Finance Act 1994 (c. 9) (stamp duty: time for presenting agreement for lease) and applies where--

(a) an agreement for a lease is entered into before the implementation date,

(b) a lease giving effect to the agreement is executed on or after that date, and

(c) the transaction effected on completion is an SDLT transaction or would be but for an exemption or relief from stamp duty land tax.

(2) If in those circumstances--

(a) the lease is produced when the agreement is presented for stamping, and

(b) the duty (if any) chargeable on the agreement is paid,

sections 15A and 15B of the Stamp Act 1891 (c. 39) (interest and penalty on late stamping) apply in relation to the agreement as if it had been executed on the date on which the lease was executed.

(3) For the purposes of this paragraph a lease gives effect to an agreement if the lease either is in conformity with the agreement or relates to substantially the same property and term as the agreement.

(4) References in this paragraph to an agreement for a lease include missives of let in Scotland.

Exercise of option or right of pre-emption acquired before implementation date

9 (1) This paragraph applies where--

(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 acquired before the implementation date and exercised on or after that date.

(2) Where the option or right was acquired on or after 17th April 2003, any consideration for the acquisition is treated as part of the chargeable consideration for the transaction resulting from the exercise of the option or right.

(3) Where the option or right was varied on or after 17th April 2003 and before the implementation date, any consideration for the variation is treated as part of the chargeable consideration for the transaction resulting from the exercise of the option or right.

(4) Whether or not sub-paragraph (2) or (3) applies, the acquisition of the option or right and any variation of the option or right is treated as linked with the land transaction resulting from the exercise of the option or right.

But not so as to require the consideration for the acquisition or variation to be counted twice in determining the rate of tax chargeable on the land transaction resulting from the exercise of the option or right.

(5) Where this paragraph applies any ad valorem stamp duty paid on the acquisition or variation of the option or right shall go to reduce the amount of tax payable on the transaction resulting from the exercise of the option or right (but not so as to give rise to any repayment).

Supplementary

10 In this Schedule "contract" includes any agreement.

Section 125

SCHEDULE 20 Stamp duty: restriction to instruments relating to stock or marketable securities

Part 1 Supplementary provisions

Reduction of stamp duty where instrument partly relating to stock or marketable securities

1 (1) This paragraph applies where stamp duty under Part 1 of Schedule 13 to the Finance Act 1999 (c. 16) (transfer on sale) is chargeable on an instrument that relates partly to stock or marketable securities and partly to property other than stock or marketable securities.

(2) In such a case--

(a) the consideration in respect of which duty would otherwise be charged shall be apportioned, on a just and reasonable basis, as between the stock or marketable securities and the other property, and

(b) the instrument shall be charged only in respect of the consideration attributed to the stock or marketable securities.

Apportionment of consideration for stamp duty purposes

2 (1) Where part of the property referred to in section 58(1) of the Stamp Act 1891 (c. 39) (consideration to be apportioned between different instruments as parties think fit) consists of stock or marketable securities, that provision shall have effect as if "the parties think fit" read "is just and reasonable".

(2) Where--

(a) part of the property referred to in section 58(2) of the Stamp Act 1891 (property contracted to be purchased by two or more persons etc) consists of stock or marketable securities, and

(b) both or (as the case may be) all the relevant persons are connected with one another,

that provision shall have effect as if the words from "for distinct parts of the consideration" to the end of the subsection read ", the consideration shall be apportioned in such manner as is just and reasonable, so that a distinct consideration for each part of the property transferred is set forth in the transfer relating to that part, and the transfer shall be charged with ad valorem duty in respect of that consideration.".

(3) If in a case where sub-paragraph (1) or (2) applies the consideration is apportioned in a manner that is not just and reasonable, the enactments relating to stamp duty shall have effect as if--

(a) the consideration had been apportioned in a manner that is just and reasonable, and

(b) the amount of any distinct consideration set forth in any transfer relating to a part of the property transferred were such amount as is found by a just and reasonable apportionment (and not the amount actually set forth).

(4) For the purposes of sub-paragraph (2)--

(a) a person is a relevant person if he is a person by or for whom the property is contracted to be purchased;

(b) the question whether persons are connected with one another shall be determined in accordance with section 839 of the Taxes Act 1988.

Part 2 Consequential amendments and repeals

Removal of unnecessary references to "conveyance"

3 In the enactments relating to stamp duty for "conveyance or transfer", wherever occurring, substitute "transfer".

Finance Act 1895

4 In section 12 of the Finance Act 1895 (c. 16) (collection of stamp duty in cases of property vested by Act or purchased under statutory powers)--

(a) in paragraph (a) for "property is" substitute "stock or marketable securities are";

(b) in paragraph (b) for "property" substitute "stock or marketable securities";

Finance Act 1990

5 In section 108 of the Finance Act 1990 (c. 29) (transfer of securities: abolition of stamp duty), for subsections (1) to (6) substitute--

" (1) Stamp duty shall not be chargeable under Schedule 13 to the Finance Act 1999 (transfer of securities). " .

Finance Act 1999

6 In paragraph 1(2) of Schedule 13 to the Finance Act 1999 (c. 16) for "conveyance on sale" substitute "transfer on sale".

Power to make further consequential amendments or repeals

7 (1) The Treasury may by regulations make such other amendments or repeals of enactments relating to stamp duty or stamp duty reserve tax as appear to them appropriate in consequence of the abolition of stamp duty except on instruments relating to stock or marketable securities.

(2) The regulations may include such transitional provisions and savings as appear to the Treasury to be appropriate.

(3) Regulations under this paragraph shall be made by statutory instrument which shall be subject to annulment in pursuance of a resolution of the House of Commons.

Section 139

SCHEDULE 21 Approved share plans and schemes

Part 1 Share incentive plans

Introductory

1 Schedule 2 to the Income Tax (Earnings and Pensions) Act 2003 (c. 1) (approved share incentive plans) is amended as follows.

Participation in more than one connected plan in a tax year

2 After paragraph 18 insert--

" Participation in more than one connected SIP in a tax year

18A (1) The plan must provide that, if an individual participates in an award of shares under the plan in a tax year in which he has already participated in an award of shares under one or more other approved SIPs established by the company or a connected company--

(a) paragraph 35 (maximum annual award of free shares),

(b) paragraph 46 (maximum amount of partnership share money deductions), and

apply as if the plan and the other plan or plans were a single plan.

(2) In this paragraph "connected company" has the same meaning as in paragraph 18. " .

3 In paragraph 13 (eligibility of individuals: introduction), for the entry relating to paragraph 18 substitute--

" paragraph 18 (requirement not to participate simultaneously in connected SIPs),
paragraph 18A (successive participation in connected SIPs), and " .

4 In paragraph 14(7) (eligibility to participate dependent on certain requirements of plan being met), for paragraph (b) substitute--

" (b) not participating simultaneously in connected SIPs (see paragraph 18),

(ba) successive participation in connected SIPs (see paragraph 18A), and " .

5 In paragraph 18 (requirement not to participate in connected SIPs), omit sub-paragraph (1)(a) (successive participation in connected SIPs).

6 After paragraph 71 insert--

" Duty to monitor participants in connected schemes

71A The trust instrument must require the trustees to maintain records of participants who have participated in one or more other approved SIPs established by the company or a connected company. " .

Partnership shares

7 (1) Paragraph 46 (maximum amount of partnership share money deductions) is amended as follows.

(2) In sub-paragraph (1), for the words after "must not exceed" substitute "£1,500 in any tax year.".

(3) In sub-paragraph (2), for the words after "an employee's salary" substitute "for any tax year must not exceed 10% of the employee's salary for the tax year.".

(4) After that sub-paragraph insert--

" (4A) A limit lower than that specified in sub-paragraph (2) may be framed--

(a) as a proposition substituting a percentage lower than that so specified, or

(b) as a proposition that a particular description of earnings is not to be regarded as forming part of an employee's salary for the purposes of that sub-paragraph. " .

(5) Sub-paragraphs (2) and (3) have effect for the year 2003-04 and subsequent years of assessment.

8 In paragraph 47 (minimum amount of deductions)--

(a) for "in any month" substitute "on any occasion", and

(b) omit sub-paragraph (3).

Part 2 SAYE option schemes

Introductory

9 Schedule 3 to the Income Tax (Earnings and Pensions) Act 2003 (c. 1) (approved SAYE option schemes) is amended as follows.

Minor correction

10 In paragraph 25(3)(a) (limit on contributions under CCS schemes linked to approved SAYE schemes), after "SAYE" insert "option".

Exercise of options: scheme-related employment ends because of change of control or transfer

11 (1) Paragraph 34 (exercise of options: scheme-related employment ends) is amended as follows.

(2) In sub-paragraph (2)(a), after "1996" insert "or ER(NI)O 1996".

(3) In sub-paragraph (5)--

(a) for "provide that," substitute "make provision about the time when the options may be exercised", and

(b) omit the words following paragraph (b).

(4) After that sub-paragraph insert--

" (5A) If the scheme makes provision by virtue of sub-paragraph (5), the provision must be either--

(a) that the options may be exercised within 6 months after the termination date, or

(b) that the options may be exercised within 6 months after the date (if any) when P ceases to hold the employment which (before the termination date) was the scheme-related employment for a reason within sub-paragraph (2)(a) or (b). " .

Alteration of schemes

12 (1) Paragraph 42 (withdrawal of approval) is amended as follows.

(2) In sub-paragraph (2), after "to be met;" insert--

" (aa) an alteration is made in a key feature of the scheme without the approval of the Inland Revenue; " .

(3) After that sub-paragraph insert--

" (2A) For the purposes of sub-paragraph (2)(aa) the Inland Revenue may not withhold their approval unless it appears to them at the time in question that the scheme as proposed to be altered would not then be approved on an application under paragraph 40.

(2B) For the purposes of that sub-paragraph a "key feature" of a scheme is a provision of the scheme which is necessary in order to meet the requirements of this Schedule. " .

(4) For paragraph 43 (approval ineffective after unapproved alteration and notice of decisions) and the heading before it substitute--

" Notice of decision about alteration

43 Where the Inland Revenue--

(a) have been requested to approve any alteration in a SAYE option scheme that has been approved, and

(b) have decided whether or not to approve the alteration,

they must give notice of their decision to the scheme organiser. " .

(5) For paragraph 44(1)(b) (appeal against decision not to approve alteration) substitute--

" (b) decide to refuse approval under paragraph 42(2)(aa). " .

Part 3 CSOP schemes

Introductory

13 The Income Tax (Earnings and Pensions) Act 2003 (c. 1) is amended as follows.

Exercise of options: exclusion of income tax liability

14 (1) Section 524 (no charge in respect of exercise of option under CSOP scheme) is amended as follows.

(2) For subsection (1)(b) substitute--

" (b) Condition A or B is met. " .

(3) For subsections (2) and (3) substitute--

" (2) Condition A is that the option is exercised--

(a) on or after the third anniversary of the date on which it was granted, but

(b) not later than the tenth anniversary of that date.

(2A) Condition B is that the option--

(a) is exercised before the third anniversary of the date on which it was granted, and

(b) is so exercised by virtue of a provision included in the scheme under paragraph 24 of Schedule 4 (exercise of options after ceasing to be director or employee) in circumstances in which subsection (2B) applies.

(2B) This subsection applies if the individual exercising the option--

(a) has ceased to be a full-time director or qualifying employee of the scheme organiser (or, in the case of a group scheme, a constituent company) because of injury, disability, redundancy or retirement, and

(b) exercises the option within 6 months of the day on which he ceases to be such a director or employee.

(2C) In subsection (2B)--

"redundancy" means redundancy within the meaning of ERA 1996 or ER(NI)O 1996, and
"retirement" means retirement on or after reaching a retirement age specified in the scheme. " .

(4) For section 525(1)(b) (no charge in respect of post-acquisition benefits) substitute--

" (b) Condition A or B (as set out in section 524(2) or (2A)) is met. " .

(5) This paragraph has effect in relation to any exercise of an option on or after 9th April 2003.

15 (1) Schedule 4 (approved CSOP schemes) is amended as follows.

(2) After paragraph 35 insert--

" Retirement age

35A A retirement age specified in a CSOP scheme--

(a) must be the same for men and women, and

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