Finance Act 2003 (c. 14)

(The document as of February, 2008)

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(4) In this section--

"open-ended investment company" has the meaning given by section 236 of the Financial Services and Markets Act 2000 (c. 8);
"prescribed" means prescribed by regulations under this section; and
"unit trust scheme" and "umbrella scheme" have the same meaning as in section 101.

103 Joint purchasers

(1) This section applies to a land transaction where there are two or more purchasers who are or will be jointly entitled to the interest acquired.

(2) The general rules are that--

(a) any obligation of the purchaser under this Part in relation to the transaction is an obligation of the purchasers jointly but may be discharged by any of them,

(b) anything required or authorised by this Part to be done in relation to the purchaser must be done by or in relation to all of them, and

(c) any liability of the purchaser under this Part in relation to the transaction (in particular, any liability arising by virtue of the failure to fulfil an obligation within paragraph (a)), is a joint and several liability of the purchasers.

These rules are subject to the following provisions.

(3) If the transaction is a notifiable transaction, a single land transaction return is required.

(4) 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 purchasers.

(5) 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 purchasers,

(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 purchasers,

(c) any of the purchasers 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 purchasers.

(6) A Revenue determination or discovery assessment relating to the transaction must be made against all the purchasers 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.

(7) 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 purchasers,

(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.

(8) This section has effect subject to--

the provisions of Schedule 15 relating to partnerships, and
the provisions of Schedule 16 relating to trustees.

104 Partnerships

(1) Schedule 15 has effect with respect to the application of this Part in relation to partnerships.

(2) In that Schedule--

Part 1 defines "partnership" and contains other general provisions, and
Part 2 deals with ordinary partnership transactions, and
Part 3 excludes certain transactions from stamp duty land tax.

105 Trustees

Schedule 16 has effect with respect to the application of this Part in relation to trustees.

106 Persons acting in a representative capacity etc

(1) The person having the direction, management or control of the property of an incapacitated person--

(a) is responsible for discharging any obligations under this Part, in relation to a transaction affecting that property, to which the incapacitated person would be subject if he were not incapacitated, and

(b) may retain out of money coming into his hands on behalf of the incapacitated person sums sufficient to meet any payment he is liable to make under this Part, and, so far as he is not so reimbursed, is entitled to be indemnified in respect of any such payment.

(2) The parent or guardian of a minor is responsible for discharging any obligations of the minor under this Part that are not discharged by the minor himself.

(3) The personal representatives of a person who is the purchaser under a land transaction--

(a) are responsible for discharging the obligations of the purchaser under this Part in relation to the transaction, and

(b) may deduct any payment made by them under this Part out of the assets and effects of the deceased person.

(4) A receiver appointed by a court in the United Kingdom having the direction and control of any property is responsible for discharging any obligations under this Part in relation to a transaction affecting that property as if the property were not under the direction and control of the court.

107 Crown application

(1) Subject to the following provisions of this section, this Part applies in relation to public offices and departments of the Crown.

But nothing in this Part shall require the payment by any such office or department of tax that would ultimately be borne by the Crown.

(2) A land transaction under which the purchaser is any of the following is exempt from charge:

Government
A Minister of the Crown
The Scottish Ministers
A Northern Ireland department
Parliament etc
The Corporate Officer of the House of Lords
The Corporate Officer of the House of Commons
The Scottish Parliamentary Corporate Body
The Northern Ireland Assembly Commission
The National Assembly for Wales

(3) The powers conferred by Part 7 of Schedule 13 (entry with warrant to obtain information) are not exercisable in relation to premises occupied for the purposes of the Crown.

Supplementary provisions

108 Linked transactions

(1) Transactions are "linked" for the purposes of this Part if they form part of a single scheme, arrangement or series of transactions between the same vendor and purchaser or, in either case, persons connected with them.

Section 839 of the Taxes Act 1988 (connected persons) has effect for the purposes of this subsection

(2) Where there are two or more linked transactions with the same effective date, the purchaser, or all of the purchasers if there is more than one, may make a single land transaction return as if all of those transactions that are notifiable were a single notifiable transaction.

(3) Where two or more purchasers make a single return in respect of linked transactions, section 103 (joint purchasers) applies as if--

(a) the transactions in question were a single transaction, and

(b) those purchasers were purchasers acting jointly.

109 General power to vary this Part by regulations

(1) The Treasury may if they consider it expedient in the public interest make provision by regulations for the variation of this Part in its application to land transactions of any description.

(2) The power conferred by this section includes, in particular, power to alter--

(a) the descriptions of land transaction that are chargeable or notifiable;

(b) the descriptions of land transaction in respect of which tax is chargeable at any existing rate or amount.

(3) The power conferred by this section does not, except as mentioned in subsection (2)(b), include power to vary any threshold, rate or amount specified in--

(a) section 55 (amount of tax chargeable: general), or

(b) Schedule 5 (amount of tax chargeable: rent).

(4) This section has effect subject to section 110 (approval of regulations by House of Commons).

(5) Regulations under this section do not apply in relation to any transaction of which the effective date is after the end of--

(a) the period of 18 months beginning with the day on which the regulations were made, or

(b) such shorter period as may be specified in the regulations.

This does not affect the power to make further provision by regulations under this section to the same or similar effect.

(6) Regulations under this section may include such supplementary, transitional and incidental provision as appears to the Treasury to be necessary or expedient.

(7) The power conferred by this section may be exercised at any time after the passing of this Act.

110 Approval of regulations under general power

(1) An instrument containing regulations under section 109 (general power to vary this Part by regulations) must be laid before the House of Commons after being made.

(2) If the regulations are not approved by the House of Commons before the end of the period of 28 days beginning with the day on which they are made, they shall cease to have effect at the end of that period (if they have not already ceased to have effect under subsection (3)).

(3) If on any day during that period of 28 days the House of Commons, in proceedings on a motion that (or to the effect that) the regulations be approved, comes to a decision rejecting the regulations, they shall cease to have effect at the end of that day.

(4) In reckoning any such period of 28 days take no account of any time during which--

(a) Parliament is prorogued or dissolved, or

(b) the House of Commons is adjourned for more than four days.

(5) Where regulations cease to have effect under this section, their ceasing to have effect is without prejudice to anything done in reliance on them.

As to claims for repayment, see section 111.

111 Claim for repayment if regulations under general power not approved

(1) Where regulations cease to have effect under section 110, any amount paid by way of tax, or interest or penalty, that would not have been payable but for the regulations shall, on a claim, be repaid by the Inland Revenue.

(2) Section 89 (interest on repayment of tax overpaid etc) applies to a repayment under this section.

(3) A claim for repayment must be made within two years after the effective date of the transaction in question.

(4) The Inland Revenue may make provision by regulations--

(a) for varying the time limit for making a claim;

(b) as to any other conditions that must be met before repayment is made.

112 Power to amend certain provisions before implementation

(1) The Treasury may by regulations amend the following provisions of this Part--

(a) Schedule 5 (amount of tax chargeable: rent);

(b) subsection (2) of section 55 (amount of tax chargeable: general) so far as relating to the thresholds at which different rates of tax become payable.

(2) The regulations may make such consequential amendments of Schedule 6 (disadvantaged areas relief) as appear to the Treasury to be appropriate.

(3) A statutory instrument containing regulations under this section shall not be made unless a draft of the instrument has been laid before and approved by resolution of the House of Commons.

(4) The power conferred by this section is not exercisable after the implementation date.

113 Functions conferred on "the Inland Revenue"

(1) References in this Part to "the Inland Revenue" are to any officer of the Board, except as otherwise provided.

(2) Any power of the Inland Revenue to make regulations is exercisable only by the Board.

(3) In Schedule 10 (returns, assessments and other administrative matters)--

(a) functions of the Inland Revenue under these provisions are exercisable by the Board or an officer of the Board--

(i) paragraph 28 (discovery assessment),

(ii) paragraph 29 (assessment to recover excessive repayment);

(b) functions of the Inland Revenue under these provisions are functions of the Board--

(i) paragraph 33 (relief in case of double assessment),

(ii) paragraph 34 (relief in case of mistake in return).

(4) Nothing in this section affects any provision of this Part that expressly confers functions on the Board, an officer of the Board, a collector or a specific officer of the Board.

114 Orders and regulations made by the Treasury or the Inland Revenue

(1) Except as otherwise provided, any power of the Treasury or the Inland Revenue to make an order or regulations under this Part, or under any other enactments relating to stamp duty land tax (including enactments passed after this Act), is exercisable by statutory instrument.

(2) Subsection (1) does not apply in relation to the power conferred by--

paragraph 8 of Schedule 5 to this Act (tax chargeable in respect of rent: power to prescribe temporal discount rate),
section 178(5) of the Finance Act 1989 (c. 26) (power to prescribe rates of interest).

(3) Except as otherwise provided, a statutory instrument containing any order or regulations made by the Treasury or the Inland Revenue under this Part, or under any other enactments relating to stamp duty land tax (including enactments passed after this Act), shall be subject to annulment in pursuance of a resolution of the House of Commons.

(4) Subsection (3) does not apply to a statutory instrument made under the power conferred by--

section 61(3) (compliance with planning obligations: power to add to list of public authorities);
paragraph 1(3) of Schedule 9 (right to buy transactions: power to add to list of relevant public sector bodies);
paragraph 2(2) of Schedule 19 (commencement and transitional provisions: power to appoint implementation date).

115 General and Special Commissioners, appeals and other proceedings

Schedule 17 makes provision about the General and Special Commissioners, appeals and other proceedings before the Commissioners and related matters.

Interpretation etc

116 Meaning of "residential property"

(1) In this Part "residential property" means--

(a) a building that is used or suitable for use as a dwelling, or is in the process of being constructed or adapted for such use, and

(b) land that is or forms part of the garden or grounds of a building within paragraph (a) (including any building or structure on such land), or

(c) an interest in or right over land that subsists for the benefit of a building within paragraph (a) or of land within paragraph (b);

and "non-residential property" means any property that is not residential property.

This is subject to the rule in subsection (7) in the case of a transaction involving six or more dwellings.

(2) For the purposes of subsection (1) a building used for any of the following purposes is used as a dwelling--

(a) residential accommodation for school pupils;

(b) residential accommodation for students, other than accommodation falling with subsection (3)(b);

(d) an institution that is the sole or main residence of at least 90% of its residents and does not fall within any of paragraphs (a) to (f) of subsection (3).

(3) For the purposes of subsection (1) a building used for any of the following purposes is not used as a dwelling--

(a) a home or other institution providing residential accommodation for children;

(b) a hall of residence for students in further or higher education;

(c) a home or other institution providing residential accommodation with personal care for persons in need of personal care by reason of old age, disablement, past or present dependence on alcohol or drugs or past or present mental disorder;

(d) a hospital or hospice;

(e) a prison or similar establishment;

(f) a hotel or inn or similar establishment.

(4) Where a building is used for a purpose specified in subsection (3), no account shall be taken for the purposes of subsection (1)(a) of its suitability for any other use.

(5) Where a building that is not in use is suitable for use for at least one of the purposes specified in subsection (2) and at least one of those specified in subsection (3)--

(a) if there is one such use for which it is most suitable, or if the uses for which it is most suitable are all specified in the same sub-paragraph, no account shall be taken for the purposes of subsection (1)(a) of its suitability for any other use,

(b) otherwise, the building shall be treated for those purposes as suitable for use as a dwelling.

(6) In this section "building" includes part of a building.

(7) Where six or more separate dwellings are the subject of a single transaction involving the transfer of a major interest in, or the grant of a lease over, them, then, for the purposes of this Part as it applies in relation to that transaction, those dwellings are treated as not being residential property.

(8) The Treasury may by order--

(a) amend subsections (2) and (3) so as to change or clarify the cases where use of a building is, or is not to be, use of a building as a dwelling for the purposes of subsection (1);

(b) amend or repeal subsection (7) and the reference to that subsection in subsection (1).

Any such order may contain such incidental, supplementary, consequential or transitional provision as appears to the Treasury to be necessary or expedient.

117 Meaning of "major interest" in land

(1) References in this Part to a "major interest" in land shall be construed as follows.

(2) In relation to land in England or Wales, the references are to--

(a) an estate in fee simple absolute, or

(b) a term of years absolute,

whether subsisting at law or in equity.

(3) In relation to land in Scotland, the references are to--

(a) the interest of an owner of land, or

(b) the tenant's right over or interest in a property subject to a lease.

Until the appointed day for the purposes of the Abolition of Feudal Tenure etc. (Scotland) Act 2000 (asp 5), the reference in paragraph (a) to the interest of the owner shall be read, in relation to feudal property, as a reference to the estate or interest of the proprietor of the dominium utile.

(4) In relation to land in Northern Ireland, the references are to--

(a) any freehold estate, or

(b) any leasehold estate,

whether subsisting at law or in equity.

118 Meaning of "market value"

For the purposes of this Part "market value" shall be determined as for the purposes of the Taxation of Chargeable Gains Act 1992 (c. 12) (see sections 272 to 274 of that Act).

119 Meaning of "effective date" of a transaction

(1) Except as otherwise provided, the effective date of a land transaction for the purposes of this Part is the date of completion.

(2) Other provision as to the effective date of certain descriptions of land transaction is made by--

section 44(4) (contract and conveyance: contract substantially performed without having been completed), and
section 46(3) (options and rights of pre-emption).

120 Meaning of "lease" and other supplementary provisions

(1) In the application of this Part to England and Wales or Northern Ireland "lease" means--

(a) an interest or right in or over land for a term of years (whether fixed or periodic), or

(b) a tenancy at will or other interest or right in or over land terminable by notice at any time.

(2) In this Part--

(a) references to a lease for a definite term are to a lease for a fixed term, and

(b) references to a lease for an indefinite term are to--

(i) a periodic tenancy or other interest or right terminable by a period of notice,

(ii) a tenancy at will in England and Wales or Northern Ireland, or

(iii) any other interest or right terminable by notice at any time.

(3) A lease granted for a fixed term and thereafter until determined is treated for the purposes of this Part as a lease for a definite term equal to the fixed term together with such further period as must elapse before the earliest date at which the lease can be determined.

(4) In the application of this Part to Scotland references to the reversion on a lease shall be read as references to the interest of the landlord in the property subject to the lease.

(5) Where tax has been paid in respect of a land transaction ("the first transaction") that involves missives of let in Scotland that constitute a lease, and subsequent to those missives of let a lease is granted ("the second transaction") which either--

(a) is in conformity with the missives of let, or

(b) relates to substantially the same property and period as the missives of let,

the tax that would otherwise be charged in respect of the second transaction is reduced by the amount of tax paid in respect of the first transaction in respect of the missives of let.

121 Minor definitions

In this Part--

"assignment", in Scotland, means assignation;
"completion", in Scotland, means--
(a)
in relation to a lease, when it is executed by the parties (that is to say, by signing) or constituted by any means;
(b)
in relation to any other transaction, the settlement of the transaction;
"employee" includes an office-holder and related expressions have a corresponding meaning;
"jointly entitled" means--
(a)
in England and Wales, beneficially entitled as joint tenants or tenants in common,
(b)
in Scotland, entitled as joint owners or owners in common,
(c)
in Northern Ireland, beneficially entitled as joint tenants, tenants in common or coparceners;
"land" includes--
(a)
buildings and structures, and
(b)
land covered by water;
"registered social landlord" means--
(a)
in relation to England and Wales, a body registered as a social landlord in a register maintained under section 1(1) of the Housing Act 1996 (c. 52);
(b)
in relation to Scotland, a body registered in the register maintained under section 57 of the Housing (Scotland) Act 2001 (asp 10);
(c)
in relation to Northern Ireland, a housing association registered in the register maintained under Article 14 of the Housing (Northern Ireland) Order 1992 (S.I. 1992/1725 (N.I. 15));
"standard security" has the meaning given by the Conveyancing and Feudal Reform (Scotland) Act 1970 (c. 35);
"statutory provision" means any provision made by or under an Act of Parliament, an Act of the Scottish Parliament or any Northern Ireland legislation;
"surrender", in Scotland, means renunciation;
"tax", unless the context otherwise requires, means tax under this Part.

122 Index of defined expressions

In this Part the expressions listed below are defined or otherwise explained by the provisions indicated--

acquisition relief	Schedule 7, paragraph 8(1)
assignment (in Scotland)	section 121
bare trust	Schedule 16, paragraph 1(2)
the Board (in relation to the Inland Revenue)	section 42(3)
chargeable consideration	section 50 and Schedule 4
chargeable interest	section 48(1)
chargeable transaction	section 49
charities relief	Schedule 8, paragraph 1(1)
closure notice	Schedule 10, paragraph 23(1) (in relation to a land transaction return); Schedule 11, paragraph 16(1) (in relation to a self-certificate)
company	section 100 (except as otherwise expressly provided)
completion (in Scotland)	section 121
contingent (in relation to consideration)	section 51(3)
delivery (in relation to a land transaction return)	Schedule 10, paragraph 2(2)
discovery assessment	Schedule 10, paragraph 28(1)
effective date (in relation to a land transaction)	section 119
employee	section 121
exempt interest	section 48(2) to (5)
filing date (in relation to a land transaction return)	Schedule 10, paragraph 2(1)
implementation date	Schedule 19, paragraph 2(2)
the Inland Revenue	section 113
jointly entitled	section 121
land	section 121
land transaction	section 43(1)
land transaction return	section 76(1)
lease (and related expressions)	section 120
linked transactions	section 108
main subject-matter (in relation to a land transaction)	section 43(6)
major interest (in relation to land)	section 117
market value	section 118
notice of enquiry	Schedule 10, paragraph 12(1) (in relation to a land transaction return); Schedule 11, paragraph 7(1) (in relation to a self-certificate)
notifiable (in relation to a land transaction)	section 77
partnership (and related expressions)	Schedule 15, paragraphs 1 to 4
purchaser	section 43(4)
rate of tax	section 55(7)
reconstruction relief	Schedule 7, paragraph 7(1)
registered social landlord	section 121
residential property	section 116
Revenue determination	Schedule 10, paragraph 25(1)
self-assessment	section 76(3)(a)
self-certificate	section 79(3)(b)
settlement	Schedule 16, paragraph 1(1)
standard security	section 121
statutory provision	section 121
subject-matter (in relation to a land transaction)	section 43(6)
substantial performance (in relation to a contract)	section 44(5) to (7)
surrender (in Scotland)	section 121
tax	section 121
uncertain (in relation to consideration)	section 51(3)
unit holder	section 101(4)
unit trust scheme	section 101(4)
vendor	section 43(4)

Final provisions

123 Consequential amendments

(1) Schedule 18 contains certain amendments consequential on the provisions of this Part.

(2) The Treasury may by regulations make such other amendments and repeals as appear to them appropriate in consequence of the provisions of this Part.

(3) The regulations may, in particular, make such provision as the Treasury think fit for reproducing in relation to stamp duty land tax the effect of enactments providing for exemption from stamp duty.

124 Commencement and transitional provisions

Schedule 19 makes provision for and in connection with the coming into force of the provisions of this Part.

Part 5 Stamp duty

125 Abolition of stamp duty except on instruments relating to stock or marketable securities

(1) Stamp duty is chargeable under Schedule 13 of the Finance Act 1999 (c. 16) only on instruments relating to stock or marketable securities.

(2) 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) does not apply to property other than stock or marketable securities.

(3) This section shall be construed as one with the Stamp Act 1891 (c. 39).

(4) Part 1 of Schedule 20 to this Act contains provisions supplementing this section and Part 2 of that Schedule provides for consequential amendments and repeals.

(5) This section and that Schedule have effect--

(a) in relation to an instrument effecting a land transaction, if the transaction--

(i) is an SDLT transaction within the meaning of Schedule 19 to this Act (stamp duty land tax: commencement and transitional provisions), or

(ii) would be such a transaction but for an exemption or relief from stamp duty land tax;

(b) in relation to an instrument effecting a transaction other than a land transaction, if the instrument is executed on or after the implementation date for the purposes of stamp duty land tax (see paragraph 2(2) of that Schedule).

For this purpose an instrument effecting both a land transaction and a transaction other than a land transaction is treated as if it were two instruments to which paragraph (a) and paragraph (b) above respectively applied.

(6) Where in the case of an instrument effecting both a land transaction and a transaction other than a land transaction the result of applying subsection (5) is that stamp duty is chargeable on either or both of the deemed instruments, the enactments relating to stamp duty have effect as if--

(a) there were two instruments as mentioned in the closing words of that subsection,

(b) the consideration had been apportioned between them in a just and reasonable manner, and

(c) the amount found on that apportionment to be attributable to the chargeable instrument, or (as the case may be) to each of them, had been set forth distinctly in that instrument.

(7) In subsections (5) and (6) "land transaction" has the same meaning as in Part 4 of this Act.

(8) This section and Schedule 20 have effect subject to paragraph 13(2) and (3) of Schedule 15 to this Act (continued application of stamp duty in relation to certain partnership transactions).

126 Circumstances in which group relief withdrawn

(1) Section 111 of the Finance Act 2002 (c. 23) (stamp duty: withdrawal of group relief) is amended as follows.

(2) In subsection (1)(b) (circumstances in which relief withdrawn: transferee company ceasing to be member of group within two years) for "two years" substitute "three years".

(3) In subsection (1)(c) (circumstances in which relief withdrawn: transferee company holding estate or interest when it ceases to be member of group)--

(a) in the opening words--

(i) for "it ceases" substitute "the transferee company ceases", and

(ii) for "it holds" substitute "it or a relevant associated company holds";

(b) in sub-paragraph (i) for "to it" substitute "to the transferee company"; and

(c) for the closing words substitute "and that has not subsequently been transferred 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".

(4) In subsection (3)--

(a) after "transferred" insert "to the transferee company", and

(b) for "what the transferee company holds at the time it ceases to be a member" substitute "what is held by that company or, as the case may be, that company and any relevant associated companies, at the time it or they cease to be members".

(5) After subsection (4) insert--

" (4A) In this section "relevant associated company", in relation to the transferee company, means a company that--

(a) is a member of the same group as the transferee company immediately before that company ceases to be a member of the same group as the transferor company, and

(b) ceases to be a member of the same group as the transferor company in consequence of the transferee company so ceasing. " .

(6) In paragraph 4(3) of Schedule 34 to the Finance Act 2002 (c. 23) (withdrawal of group relief: supplementary provisions), in paragraph (b)--

(a) in the opening words--

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