Legalize / United Kingdom / Scotland / Act of the Scottish Parliament

Land and Buildings Transaction Tax (Scotland) Act 2013

Type Act of the Scottish Parliament

Publication 2013-07-31

Last updated 2026-02-26

State In force

Jurisdiction Scotland

Department Statute Law Database

Source legislation.gov.uk

articles Not indexed

Reform history JSON API

(3) Where the condition in sub-paragraph (2)(b) is not met, the chargeable consideration for the transaction is determined in accordance with paragraph 9(3) of schedule 2.

(4) This paragraph applies whether or not the administration of the estate is complete or the property has been distributed in accordance with the original dispositions.

Power to add, vary or remove exemptions

8

The Scottish Ministers may, by regulations, modify this schedule so as to—

(a) add a description of land transaction as an exempt transaction,

(b) provide that a description of land transaction is no longer an exempt transaction,

SCHEDULE 2

Money or money’s worth

1

The chargeable consideration for a transaction is, except as otherwise provided, any consideration in money or money's worth given for the subject-matter of the transaction, directly or indirectly, by the buyer or a person connected with the buyer.

Value added tax

2

The chargeable consideration for a transaction includes any value added tax chargeable in respect of the transaction, other than value added tax chargeable by virtue of an option to tax any land under Part 1 of schedule 10 to the Value Added Tax Act 1994 (c.23) made after the effective date of the transaction.

Postponed consideration

3

The amount or value of the chargeable consideration for a transaction is to be determined without any discount for postponement of the right to receive it or any part of it.

Just and reasonable apportionment

4

(1) For the purposes of this Act consideration attributable—

(a) to two or more land transactions, or

(b) in part to a land transaction and in part to another matter, or

is to be apportioned on a just and reasonable basis.

(2) If the consideration is not so apportioned, this Act has effect as if it had been so apportioned.

(3) For the purposes of this paragraph any consideration given for what is in substance one bargain is to be treated as attributable to all the elements of the bargain, even though—

(a) separate consideration is, or purports to be, given for different elements of the bargain, or

(b) there are, or purport to be, separate transactions in respect of different elements of the bargain.

Exchanges

5

(1) This paragraph applies to determine the chargeable consideration where one or more land transactions are entered into by a person as buyer (alone or jointly) wholly or partly in consideration of one or more other land transactions being entered into by that person (alone or jointly) as seller.

(2) In this paragraph—

“relevant acquisition” means a relevant transaction entered into as buyer,

“relevant disposal” means a relevant transaction entered into as seller, and

“relevant transaction” means any of those transactions.

(3) The following rules apply if the subject-matter of any of the relevant transactions is a major interest in land—

(a) where a single relevant acquisition is made, the chargeable consideration for the acquisition is the greater of—

(i) the amount determined under sub-paragraph (4) in respect of the acquisition, or

(ii) the amount which would be the chargeable consideration for the acquisition ignoring this paragraph,

(b) where two or more relevant acquisitions are made, the chargeable consideration for each relevant acquisition is the greater of—

(i) the amount determined under sub-paragraph (4) in respect of that acquisition, or

(ii) the amount which would be the chargeable consideration for that acquisition ignoring this paragraph.

(4) The amount mentioned in sub-paragraph (3)(a)(i) and (b)(i) is—

(a) the market value of the subject-matter of the acquisition, or

(b) if the acquisition is the grant of a lease, the rent.

(5) The following rules apply if the subject-matter of none of the relevant transactions is a major interest in land—

(a) where a single relevant acquisition is made in consideration of one or more relevant disposals, the chargeable consideration for the acquisition is the amount or value of any chargeable consideration other than the disposal or disposals that are given for the acquisition,

(b) where two or more relevant acquisitions are made in consideration of one or more relevant disposals, the chargeable consideration for each relevant acquisition is the appropriate proportion of the amount or value of any chargeable consideration other than the disposal or disposals that are given for the acquisitions.

(6) For the purposes of sub-paragraph (5)(b) the appropriate proportion is—

$$MV TMV$where—MV is the market value of the subject-matter of the acquisition for which the chargeable consideration is being determined, andTMV is the total market value of the subject-matter of all the relevant acquisitions.$

(7) This paragraph is subject to paragraph 6 (partition etc.: disregard of existing interests).

(8) This paragraph does not apply in a case to which paragraph 17 (arrangements involving public or educational bodies) applies.

Partition etc.: disregard of existing interest

6

In the case of a land transaction giving effect to a partition or division of a chargeable interest to which persons are jointly entitled, the share of the interest held by the buyer immediately before the partition or division does not count as chargeable consideration.

Valuation of non-monetary consideration

7

Except as otherwise expressly provided, the value of any chargeable consideration for a land transaction, other than—

(a) money (whether in sterling or another currency), or

(b) debt as defined for the purposes of paragraph 8 (debt as consideration),

is to be taken to be its market value at the effective date of the transaction.

Debt as consideration

8

(1) Where the chargeable consideration for a land transaction consists in whole or in part of—

(a) the satisfaction or release of a debt due to the buyer or owed by the seller, or

(b) the assumption of existing debt by the buyer,

the amount of debt satisfied, released or assumed is to be taken to be the whole or, as the case may be, part of the chargeable consideration for the transaction.

(2) Where—

(a) a debt is secured on the subject-matter of a land transaction immediately before and immediately after the transaction, and

(b) the rights or liabilities in relation to that debt of any party to the transaction are changed as a result of or in connection with the transaction,

then for the purposes of this paragraph there is an assumption of that debt by the buyer, and that assumption of debt constitutes chargeable consideration for the transaction.

(3) Where in a case in which sub-paragraph (1)(b) applies—

(a) the debt assumed is or includes debt secured on the property forming the subject-matter of the transaction, and

(b) immediately before the transaction there were two or more persons each holding an undivided share of that property, or there were two or more such persons immediately afterwards,

the amount of secured debt assumed is to be determined as if the amount of that debt owed by each of those persons at a given time were the proportion of it corresponding to the person's undivided share of the property at that time.

(4) If the effect of this paragraph would be that the amount of the chargeable consideration for the transaction exceeded the market value of the subject-matter of the transaction, the amount of the chargeable consideration is treated as limited to that value.

(5) In this paragraph—

“debt” has the same meaning as in paragraph 6(4) of schedule 1,

“existing debt”, in relation to a transaction, means debt created or arising before the effective date of, and otherwise than in connection with, the transaction, and

references to the amount of a debt are to the principal amount payable or, as the case may be, the total of the principal amounts payable, together with the amount of any interest that has accrued due on or before the effective date of the transaction.

Cases where conditions for exemption not fully met

9

(1) Where a land transaction would be an exempt transaction under paragraph 6 of schedule 1 (assents and appropriations by personal representative) but for sub-paragraph (2) of that paragraph (cases where person acquiring property gives consideration for it), the chargeable consideration for the transaction does not include the amount of any secured debt assumed.

(2) In this paragraph, “secured debt” has the same meaning as in paragraph 6(4) of schedule 1.

(3) Where a land transaction would be an exempt transaction under paragraph 7 of schedule 1 (variation of testamentary dispositions etc.) but for a failure to meet the condition in sub-paragraph (2)(b) of that paragraph (no consideration other than variation of another disposition), the chargeable consideration for the transaction does not include the making of any such variation as is mentioned in that sub-paragraph.

Conversion of amounts in foreign currency

10

(1) References in this Act to the amount or value of the consideration for a transaction are to its amount or value in sterling.

(2) For the purposes of this Act the sterling equivalent of an amount expressed in another currency is to be ascertained by reference to the London closing exchange rate on the effective date of the transaction (unless the parties have used a different rate for the purposes of the transaction).

Carrying out of works

11

(1) Where the whole or part of the consideration for a land transaction consists of the carrying out of works of construction, improvement or repair of a building or other works to enhance the value of land, then—

(a) to the extent that the conditions specified in sub-paragraph (2) are met, the value of the works does not count as chargeable consideration, and

(b) to the extent that those conditions are not met, the value of the works is to be taken into account as chargeable consideration.

(2) The conditions are—

(a) that the works are carried out after the effective date of the transaction,

(b) that the works are carried out on land acquired or to be acquired under the transaction, and

(c) that it is not a condition of the transaction that the works are carried out by the seller or a person connected with the seller.

(3) Where, by virtue of section 10(3) (substantial performance of contract without completion), there are two notifiable transactions (the first being the contract or agreement and the second being the transaction effected on completion or, as the case may be, the grant or execution of the lease), the condition in sub-paragraph (2)(a) is treated as met in relation to the second transaction if it is met in relation to the first.

(4) In this paragraph—

(a) references to the acquisition of land are to the acquisition of a major interest in it,

(b) the value of the works is to be taken to be the amount that would have to be paid in the open market for the carrying out of the works in question.

(5) This paragraph is subject to paragraph 17 (arrangements involving public or educational bodies).

Provision of services

12

(1) Where the whole or part of the consideration for a land transaction consists of the provision of services (other than the carrying out of works to which paragraph 11 applies), the value of that consideration is to be taken to be the amount that would have to be paid in the open market to obtain those services.

(2) This paragraph is subject to paragraph 17 (arrangements involving public or educational bodies).

Land transaction entered into by reason of employment

13

Where a land transaction is entered into by reason of the buyer's employment, or that of a person connected with the buyer, the consideration for the transaction is to be taken to be not less than the market value of the subject-matter of the transaction as at the effective date of the transaction.

Indemnity given by buyer

14

Where the buyer agrees to indemnify the seller in respect of liability to a third party arising from breach of an obligation owed by the seller in relation to the land that is the subject of the transaction, neither the agreement nor any payment made in pursuance of it counts as chargeable consideration.

Buyer bearing inheritance tax liability

15

Where—

(a) there is a land transaction that is—

(i) a transfer of value within section 3 of the Inheritance Tax Act 1984 (c.51) (transfers of value), or

(ii) a disposition, effected by will or under the law of intestacy, of a chargeable interest comprised in the estate of a person immediately on the person's death, and

(b) the buyer is or becomes liable to pay, agrees to pay or does in fact pay any inheritance tax due in respect of the transfer or disposition,

the buyer's liability, agreement or payment does not count as chargeable consideration for the transaction.

Buyer bearing capital gains tax liability

16

(1) Where—

(a) there is a land transaction under which the chargeable interest in question—

(i) is acquired otherwise than by a bargain made at arm's length, or

(ii) is treated by section 18 of the Taxation of Chargeable Gains Act 1992 (c.12) (connected persons) as so acquired, and

(b) the buyer is or becomes liable to pay, or does in fact pay, any capital gains tax due in respect of the corresponding disposal of the chargeable interest,

the buyer's liability or payment does not count as chargeable consideration for the transaction.

(2) Sub-paragraph (1) does not apply if there is chargeable consideration for the transaction (disregarding the liability or payment referred to in sub-paragraph (1)(b)).

Arrangements involving public or educational bodies

17

(1) This paragraph applies in any case where arrangements are entered into under which—

(a) there is a transfer of the ownership, or the grant or assignation of a lease, of land by a qualifying body (A) to a non-qualifying body (B) (“the main transfer”),

(b) in consideration (whether in whole or in part) of the main transfer there is a grant by B to A of a lease or sub-lease of the whole, or substantially the whole, of that land (“the leaseback”),

(d) some or all of the consideration given by A to B for the carrying out of those works or the provision of those services is consideration in money,

whether or not there is also a transfer of the ownership, or the grant or assignation of a lease, of any land by A to B (a “transfer of surplus land”).

(2) The following are qualifying bodies—

(a) public bodies within paragraph 4 of schedule 16,

(b) grant-aided schools within the meaning of section 135(1) of the Education (Scotland) Act 1980 (c.44), and

(c) any post-16 education body within the meaning of section 35(1) of the Further and Higher Education (Scotland) Act 2005 (asp 6) .

(3) The Scottish Ministers may, by order, modify sub-paragraph (2) so as to—

(a) add a person or body to the list of qualifying bodies,

(b) remove a person or body from that list,

(4) The following do not count as chargeable consideration for the main transfer or any transfer of surplus land—

(a) the leaseback,

(b) the carrying out of building works by B for A, or

(5) The chargeable consideration for the leaseback does not include—

(a) the main transfer,

(b) any transfer of surplus land, or

(6) Sub-paragraphs (4) and (5) are to be disregarded for the purposes of determining whether the land transaction in question is notifiable.

SCHEDULE 3

The relief

1

The leaseback element of a sale and leaseback arrangement is exempt from charge if the qualifying conditions are met.

Sale and leaseback arrangements

2

A sale and leaseback arrangement is an arrangement under which—

(a) a person (A) transfers or grants to another person (B) a major interest in land (the “sale”), and

(b) out of that interest B grants a lease to A (the “leaseback”).

Qualifying conditions

3

The qualifying conditions are—

(a) that the sale transaction is entered into wholly or partly in consideration of the leaseback transaction being entered into,

(b) that the only other consideration (if any) for the sale is the payment of money (whether in sterling or another currency) or the assumption, satisfaction or release of a debt (or both), and

(c) where A and B are both bodies corporate at the effective date of the leaseback transaction, that they are not members of the same group for the purposes of group relief (see schedule 10) at that date.

Interpretation

4

In this schedule, “debt” has the same meaning as in paragraph 6(4) of schedule 1.

SCHEDULE 4

PART 1 — Introductory

Overview of reliefs

1

(1) This schedule provides for relief in the case of certain acquisitions of residential property.

(2) It is arranged as follows—

Part 2 provides for relief in the case of an acquisition by a house-building company from an individual acquiring a new dwelling,

Part 3 provides for relief in the case of an acquisition by a property trader from an individual acquiring a new dwelling,

Part 4 provides for relief in the case of an acquisition by a property trader from an individual where a chain of transactions breaks down,

Part 5 provides for the withdrawal of those reliefs in certain circumstances,

Part 6 defines expressions used in this schedule.

PART 2 — Acquisition by house-building company from individual acquiring new dwelling

Full relief

2

Where a dwelling (“the old dwelling”) is acquired by a house-building company from an individual (whether alone or with other individuals), the acquisition is exempt from charge if the qualifying conditions are met.

Partial relief

3

Where qualifying conditions (a) to (d) but not (e) are met, the chargeable consideration for the acquisition is taken to be the amount calculated by deducting the market value of the permitted area from the market value of the old dwelling.

Qualifying conditions

4

In this Part of this schedule, the qualifying conditions are—

(a) that the individual (whether alone or with other individuals) acquires a new dwelling from the house-building company,

(b) that the individual occupied the old dwelling as the individual's only or main residence at some time in the period of 2 years ending with the date of its acquisition,

(d) that each acquisition is entered into in consideration of the other, and

(e) that the area of land acquired by the house-building company does not exceed the permitted area.

PART 3 — Acquisition by property trader from individual acquiring new dwelling

Full relief

5

Where a dwelling (“the old dwelling”) is acquired by a property trader from an individual (whether alone or with other individuals), the acquisition is exempt from charge if the qualifying conditions are met.

Partial relief

6

Where qualifying conditions (a) to (e) but not (f) are met, the chargeable consideration for the acquisition is taken to be the amount calculated by deducting the market value of the permitted area from the market value of the old dwelling.

Qualifying conditions

7

In this Part of this schedule, the qualifying conditions are—

(a) that the acquisition is made in the course of a business that consists of or includes acquiring dwellings from individuals who acquire new dwellings from house-building companies,

(b) that the individual (whether alone or with other individuals) acquires a new dwelling from a house-building company,

(c) that the individual occupied the old dwelling as the individual's only or main residence at some time in the period of 2 years ending with the date of its acquisition,

(d) that the individual intends to occupy the new dwelling as the individual's only or main residence,

(e) that the property trader does not intend—

(i) to spend more than the permitted amount on refurbishment of the old dwelling,

(ii) to grant a lease or licence of the old dwelling, or

(iii) to permit any of its principals or employees (or any person connected with any of its principals or employees) to occupy the old dwelling, and

(f) that the area of land acquired by the property trader does not exceed the permitted area.

8

Paragraph 7(e)(ii) does not apply to the grant of a lease or licence to the individual for a period of no more than 6 months.

PART 4 — Acquisition by property trader from individual where chain of transactions breaks down

Full relief

9

Partial relief

10

Where qualifying conditions (a) to (g) but not (h) are met, the chargeable consideration for the acquisition is taken to be the amount calculated by deducting the market value of the permitted area from the market value of the old dwelling.

Qualifying conditions

11

In this Part of this schedule, the qualifying conditions are—

(a) that the individual has made arrangements to sell the old dwelling and acquire another dwelling (“the second dwelling”),

(b) that the arrangements to sell the old dwelling fail,

(c) that the acquisition of the old dwelling is made for the purpose of enabling the individual's acquisition of the second dwelling to proceed,

(d) that the acquisition is made in the course of a business that consists of or includes acquiring dwellings from individuals in the circumstances mentioned in conditions (a) to (c),

(e) that the individual occupied the old dwelling as the individual's only or main residence at some time in the period of 2 years ending with the date of its acquisition,

(f) that the individual intends to occupy the second dwelling as the individual's only or main residence,

(g) that the property trader does not intend—

(i) to spend more than the permitted amount on refurbishment of the old dwelling,

(ii) to grant a lease or licence of the old dwelling, or

(iii) to permit any of its principals or employees (or any person connected with any of its principals or employees) to occupy the old dwelling, and

(h) that the area of land acquired does not exceed the permitted area.

12

Paragraph 11(g)(ii) does not apply to the grant of a lease or licence to the individual for a period of no more than 6 months.

PART 5 — Withdrawal of relief

Introductory

13

(1) Relief under this schedule is withdrawn in the following circumstances.

(2) Where relief is withdrawn, the amount of tax chargeable is the amount that would have been chargeable in respect of the acquisition but for the relief.

Relief under Part 3

14

Relief under Part 3 of this schedule (acquisition by property trader from individual acquiring new dwelling) is withdrawn if the property trader—

(a) spends more than the permitted amount on refurbishment of the old dwelling,

(b) grants a lease or licence of the old dwelling, or

(c) permits any of its principals or employees (or any person connected with any of its principals or employees) to occupy the old dwelling.

15

Paragraph 14(b) does not apply to the grant of a lease or licence to the individual for a period of no more than 6 months.

Relief under Part 4

16

Relief under Part 4 of this schedule (acquisition by property trader from individual where chain of transactions breaks down) is withdrawn if the property trader—

(a) spends more than the permitted amount on refurbishment of the old dwelling,

(b) grants a lease or licence of the old dwelling, or

(c) permits any of its principals or employees (or any person connected with any of its principals or employees) to occupy the old dwelling.

17

Paragraph 16(b) does not apply to the grant of a lease or licence to the individual for a period of no more than 6 months.

PART 6 — Interpretation

Meaning of “dwelling” and “new dwelling”

18

“Dwelling” includes land occupied and enjoyed with the dwelling as its garden or grounds.

19

A building or part of a building is a “new dwelling” if—

(a) it has been constructed for use as a single dwelling and has not previously been occupied, or

(b) it has been adapted for use as a single dwelling and has not been occupied since its adaptation.

Meaning of “permitted area”

20

“The permitted area”, in relation to a dwelling, means land occupied and enjoyed with the dwelling as its garden or grounds that does not exceed—

(a) an area (inclusive of the site of the dwelling) of 0.5 of a hectare, or

(b) such larger area as is required for the reasonable enjoyment of the dwelling as a dwelling having regard to its size and character.

21

Where paragraph 20(b) applies, the permitted area is taken to consist of that part of the land that would be the most suitable for occupation and enjoyment with the dwelling as its garden or grounds if the rest of the land were separately occupied.

Meaning of “acquisition” and “market value” in relation to dwelling and permitted area

22

References in this schedule to—

(a) the acquisition of a dwelling are to the acquisition, by way of grant or transfer, of a major interest in the dwelling,

(b) the market value of a dwelling and of the permitted area are, respectively, to the market value of that major interest in the dwelling and of that interest so far as it relates to that area.

Meaning of “house-building company”

23

A “house-building company” means a company that carries on the business of constructing or adapting buildings or parts of buildings for use as dwellings.

24

References in this schedule to such a company include any company connected with it.

Meaning of “property trader” and “principal”

25

(1) A “property trader” means an entity listed in sub-paragraph (2) that carries on the business of buying and selling dwellings.

(2) The entities are—

(a) a company,

(b) a limited liability partnership,

(3) A “principal”—

(a) in relation to a company, means a director,

(b) in relation to a limited liability partnership, means a member,

26

For the purposes of this schedule—

(a) anything done by or in relation to a company connected with a property trader is treated as done by or in relation to that property trader, and

(b) references to the principals or employees of a property trader include the principals or employees of any such company.

Meaning of “refurbishment” and “the permitted amount”

27

“Refurbishment” of a dwelling means the carrying out of works that enhance or are intended to enhance the value of the dwelling, but does not include—

(a) cleaning the dwelling, or

(b) works required solely for the purpose of ensuring that the dwelling meets minimum safety standards.

28

The “permitted amount”, in relation to the refurbishment of a dwelling, is set out in the following table—

SCHEDULE 5

PART 1 — Introductory

Overview of relief

1

(1) This schedule provides for relief in the case of certain land transactions involving multiple dwellings.

(2) It is arranged as follows—

Part 2 identifies the transactions to which this schedule applies,

Part 3 defines key terms,

Part 4 describes the relief available if a claim is made,

Part 5 provides for withdrawal of the relief,

Part 6 contains rules to determine what counts as a dwelling.

PART 2 — Transactions to which this schedule applies

The rule

2

This schedule applies to relevant transactions.

3

A relevant transaction is a transaction (other than a transaction to which schedule 19 (leases) applies) that is—

(a) within paragraph 4 or paragraph 5, and

(b) not excluded by paragraph 6.

Single transaction relating to multiple dwellings

4

A transaction is within this paragraph if its main subject-matter consists of—

(a) an interest in at least two dwellings, or

(b) an interest in at least two dwellings and other property.

Linked transactions relating to multiple dwellings

5

A transaction is within this paragraph if—

(a) its main subject-matter consists of—

(i) an interest in a single dwelling, or

(ii) an interest in a single dwelling and other property,

(b) it is one of a number of linked transactions, and

(i) an interest in some other dwelling or dwellings, or

(ii) an interest in some other dwelling or dwellings and other property.

Excluded transactions

6

A transaction is excluded by this paragraph if—

(a) relief under schedule 9 (crofting community right to buy) is available for it, or

(b) relief under schedule 10 (group relief), 11 (reconstruction relief and acquisition relief) or 13 (charities relief)—

(i) is available for it, or

(ii) has been withdrawn from it.

PART 3 — Key terms

Consideration attributable to dwellings and remaining property

7

In relation to a relevant transaction—

(a) the consideration attributable to dwellings is so much of the chargeable consideration for the transaction as is attributable to the dwellings,

(b) the consideration attributable to remaining property is the chargeable consideration for the transaction less the consideration attributable to dwellings.

Dwellings

8

“The dwellings” are, in relation to a relevant transaction, the dwelling or dwellings that are, or are part of, the main subject-matter of the transaction.

Interest in a dwelling

9

A reference in this schedule to an interest in a dwelling is to any chargeable interest in or over a dwelling.

PART 4 — The relief

Calculation of relief

10

The amount of tax chargeable in relation to a relevant transaction other than one to which schedule 2A applies is—

11

But where DT x ND or, as the case may be, ΣDT is less than the minimum prescribed amount, the amount of tax chargeable in relation to the relevant transaction is—

$MPA + RT$MPA + RT$where—MPA is the minimum prescribed amount, andRT is the tax due in relation to remaining property.$

12

The minimum prescribed amount is such proportion as may be prescribed by the Scottish Ministers by order of—

$$TT − RT$where—TT is the amount of tax that would be due in respect of the transaction but for this schedule, andRT is the tax due in relation to remaining property.$

Tax due in relation to a dwelling

13

The tax due in relation to a dwelling is determined as follows.

Step 1 Find the total consideration attributable to dwellings, that is—the consideration attributable to dwellings for the transaction, orwhere the transaction is one of a number of linked transactions, the sum of—the consideration attributable to dwellings for the transaction, andthe consideration attributable to dwellings for all other relevant transactions.

Step 2 Divide the total consideration attributable to dwellings by total dwellings.“Total dwellings” is the total number of dwellings by reference to which the total consideration attributable to dwellings is calculated.

Step 3 Calculate the amount of tax that would be due in relation to the relevant transaction were—the chargeable consideration equal to the result obtained in Step 2,the transaction a residential property transaction, andthe transaction not a linked transaction.The result is the tax due in relation to a dwelling.

Step 4 In the case of a relevant transaction to which schedule 2A applies, carry out Step 3 (taking account of any relief applicable to the transaction under paragraph 9 of that schedule) in relation to each dwelling that is, or is part of, the main subject-matter of the transaction to find the tax due in relation to each dwelling.

Tax due in relation to remaining property

14

The tax due in relation to remaining property is determined as follows.

Step 1 Calculate the amount of tax that would be due in respect of the transaction but for this schedule.

Step 2 Divide the consideration attributable to remaining property by the chargeable consideration for the transaction.

Step 3 Multiply the amount calculated in Step 1 by the fraction reached in Step 2. The result is the tax due in relation to remaining property.

General

15

“Attributable” means attributable on a just and reasonable basis.

PART 5 — Withdrawal of relief

Full withdrawal of relief

16

Relief under this schedule is withdrawn in relation to a relevant transaction if—

(a) an event occurs in the relevant period, and

(b) had the event occurred immediately before the effective date of the transaction, the transaction would not have been a relevant transaction.

17

Where relief is withdrawn, the amount of tax chargeable is the amount that would have been chargeable in respect of the transaction but for the relief.

Partial withdrawal of relief

18

Relief under this schedule is partially withdrawn in relation to a relevant transaction if—

(a) an event occurs in the relevant period, and

(b) had the event occurred immediately before the effective date of the transaction—

(i) the transaction would have been a relevant transaction, but

(ii) more tax would have been payable in respect of the transaction.

19

Where relief is partially withdrawn, tax is chargeable on the transaction as if the event had occurred immediately before the effective date of the transaction.

20

In that case, the tax so chargeable must be calculated by reference to the tax rates and tax bands in force at the effective date of the transaction.

Relevant period

21

“The relevant period” means the shorter of—

(a) the period of 3 years beginning with the effective date of the transaction, and

(b) the period beginning with the effective date of the transaction and ending with the date on which the buyer disposes of the dwelling, or the dwellings, to a person who is not connected with the buyer.

22

In relation to a transaction effected on completion of a contract that was substantially performed before completion, paragraph 21 applies as if references to the effective date of the transaction were to the date on which the contract was substantially performed.

Interpretation

23

In this Part of this schedule, “event” includes any change of circumstance or change of plan.

PART 6 — What counts as a dwelling

24

This Part of this schedule sets out rules for determining what counts as a dwelling for the purposes of this schedule.

25

A building or part of a building counts as a dwelling if—

(a) it is used or suitable for use as a single dwelling, or

(b) it is in the process of being constructed or adapted for such use.

26

Land that is, or is to be, occupied or enjoyed with a dwelling as a garden or grounds (including any building or structure on such land) is taken to be part of that dwelling.

27

Land that subsists, or is to subsist, for the benefit of a dwelling is taken to be part of that dwelling.

28

The main subject-matter of a transaction is also taken to consist of or include an interest in a dwelling if—

(a) substantial performance of a contract constitutes the effective date of that transaction by virtue of a relevant deeming provision,

(b) the main subject-matter of the transaction consists of or includes an interest in a building, or a part of a building, that is to be constructed or adapted under the contract for use as a single dwelling, and

(c) construction or adaptation of the building, or the part of a building, has not begun by the time the contract is substantially performed.

29

In paragraph 28, “relevant deeming provision” means section 10 or 11.

30

Subsections (3) to (6) of section 59 apply for the purposes of this Part of this schedule as they apply for the purposes of subsection (1)(a) of that section.

SCHEDULE 6

The relief

1

A land transaction under which the buyer is a registered social landlord is exempt from charge if one or more of the qualifying conditions are met.

The qualifying conditions

2

The qualifying conditions are—

(a) that the registered social landlord is controlled by its tenants,

(b) that the seller is one of the following—

(i) a registered social landlord,

(ii) the Scottish Ministers,

(iii) a local authority, or

(i) made or given by way of a distribution pursuant to section 25 of the National Lottery etc. Act 1993 (c.39) (application of money by distributing bodies), or

(ii) under section 2 of the Housing (Scotland) Act 1988 (c.43) (general functions of the Scottish Ministers).

Landlord controlled by tenants

3

The reference in paragraph 2(a) to a registered social landlord controlled by its tenants is to a registered social landlord the majority of whose board members are tenants occupying properties owned or managed by it.

4

For the purposes of paragraph 3, “board member” is to be construed as follows—

SCHEDULE 7

PART 1 — Introductory

Overview

1

(1) This schedule makes provision for relief in the case of certain land transactions connected to alternative property finance arrangements.

(2) It is arranged as follows—

Part 2 identifies the alternative property finance arrangements that are relieved,

Part 3 makes provision limiting the arrangements that can be relieved,

Part 4 provides for the circumstances in which the chargeable interest acquired by a financial institution under the arrangements is an exempt interest, and

Part 5 defines expressions used in this schedule.

PART 2 — Alternative property finance: arrangements relieved

Land sold to financial institution and leased to person

2

Paragraphs 3 to 6 apply where arrangements are entered into between a person and a financial institution under which the institution—

(a) purchases a major interest in land (“the first transaction”),

(b) grants to the person out of that interest a lease (if the interest acquired is the interest of the owner) or a sub-lease (if the interest acquired is the tenant's right over or interest in a property subject to a lease) (“the second transaction”), and

(c) enters into an agreement under which the person has a right to require the institution to transfer the major interest purchased by the institution under the first transaction.

3

The first transaction is exempt from charge if the seller is—

(a) the person, or

(b) another financial institution by whom the interest was acquired under arrangements of the kind mentioned in paragraph 2 entered into between it and the person.

4

The second transaction is exempt from charge if the provisions of this Act relating to the first transaction are complied with (including payment of any tax chargeable).

5

A transfer to the person that results from the exercise of the right mentioned in paragraph 2(c) (“the third transaction”) is exempt from charge if—

(a) the provisions of this Act relating to the first and second transactions are complied with, and

(b) at all times between the second and third transactions—

(i) the interest purchased under the first transaction is held by a financial institution, and

(ii) the lease or sub-lease granted under the second transaction is held by the person.

6

The agreement mentioned in paragraph 2(c) is not to be treated—

(a) as substantially performed unless and until the third transaction is entered into (and accordingly section 14 does not apply), or

(b) as a distinct land transaction by virtue of section 12 (options and rights of pre-emption).

Land sold to financial institution and person in common

7

Paragraphs 8 to 12 apply where arrangements are entered into between a person and a financial institution under which—

(a) the institution and the person purchase a major interest in land as common owners (“the first transaction”),

(b) the institution and the person enter into an agreement under which the person has a right to occupy the land exclusively (“the second transaction”), and

(c) the institution and the person enter into an agreement under which the person has a right to require the institution to transfer to the person (in one transaction or a series of transactions) the whole interest purchased under the first transaction.

8

The first transaction is exempt from charge if the seller is—

(a) the person, or

(b) another financial institution by whom the interest was acquired under arrangements of the kind mentioned in paragraph 7 entered into between it and the person.

9

The second transaction is exempt from charge if the provisions of this Act relating to the first transaction are complied with (including payment of any tax chargeable).

10

Any transfer to the person that results from the exercise of the right mentioned in paragraph 7(c) (“a further transaction”) is exempt from charge if—

(a) the provisions of this Act relating to the first transaction are complied with, and

(b) at all times between the first and the further transaction—

(i) the interest purchased under the first transaction is held by a financial institution and the person as common owners, and

(ii) the land is occupied by the person under the agreement mentioned in paragraph 7(b).

11

The agreement mentioned in paragraph 7(c) is not to be treated—

(a) as substantially performed unless and until the whole interest purchased by the institution under the first transaction has been transferred (and accordingly section 14 does not apply), or

(b) as a distinct land transaction by virtue of section 12 (options and rights of pre-emption).

12

A further transaction that is exempt from charge by virtue of paragraph 10 is not a notifiable transaction unless the transaction involves the transfer to the person of the whole interest purchased by the institution under the first transaction, so far as not transferred by a previous further transaction.

Land sold to financial institution and re-sold to person

13

Paragraphs 14 and 15 apply where arrangements are entered into between a person and a financial institution under which—

(a) the institution—

(i) purchases a major interest in land (“the first transaction”), and

(ii) sells that interest to the person (“the second transaction”), and

(b) the person grants the institution a standard security over that interest.

14

The first transaction is exempt from charge if the seller is—

(a) the person, or

(b) another financial institution by whom the interest was acquired under other arrangements of the kind mentioned in paragraph 2 or 7 entered into between it and the person.

15

The second transaction is exempt from charge if the financial institution complies with the provisions of this Act relating to the first transaction (including the payment of any tax chargeable on a chargeable consideration that is not less than the market value of the interest and, in the case of the grant of a lease, the rent).

PART 3 — Alternative property finance: arrangements not relieved

No relief where first transaction already relieved

16

Paragraphs 2 to 12 do not apply to arrangements in relation to which group relief, reconstruction relief or acquisition relief—

(a) is available for the first transaction, or

(b) has been withdrawn from that transaction.

No relief where arrangements to transfer control of financial institution

17

Paragraphs 2 to 12 do not apply to alternative finance arrangements if those arrangements, or any connected arrangements, include arrangements for a person to acquire control of the relevant financial institution.

18

That includes arrangements for a person to acquire control of the relevant financial institution only if one or more conditions are met (such as the happening of an event or doing of an act).

19

In paragraphs 17 and 18—

“alternative finance arrangements” means the arrangements referred to in paragraphs 2 and 7,

“connected arrangements” means any arrangements entered into in connection with the making of the alternative finance arrangements (including arrangements involving one or more persons who are parties to the alternative finance arrangements),

“relevant financial institution” means the financial institution which enters into the alternative finance arrangements.

20

Section 1124 of the Corporation Tax Act 2010 (c.4) applies for determining who has control of the relevant financial institution.

PART 4 — Exempt interest

Interest held by financial institution an exempt interest

21

An interest held by a financial institution as a result of the first transaction within the meaning of paragraph 2(a) or 7(a) is an exempt interest for the purposes of the tax.

22

That interest ceases to be an exempt interest if—

(a) the lease or agreement mentioned in paragraph 2(b) or 7(b) ceases to have effect, or

(b) the right under paragraph 2(c) or 7(c) ceases to have effect or becomes subject to a restriction.

23

Paragraph 21 does not apply if the first transaction is exempt from charge by virtue of schedule 10 (group relief) or 11 (reconstruction and acquisition reliefs).

24

Paragraph 21 does not make an interest exempt in respect of—

(a) the first transaction itself, or

(b) a third transaction or a further transaction within the meaning of paragraph 5 or 10.

PART 5 — Interpretation

Interpretation

25

(1) In this schedule “financial institution” has the meaning given by section 564B of the Income Tax Act 2007 (c.3).

(2) For this purpose section 564B(1) applies as if paragraph (d) were omitted.

26

In this schedule—

“arrangements” includes any agreement, understanding, scheme, transaction or series of transactions (whether or not legally enforceable),

references to a person are to be read, in relation to times after the death of the person concerned, as references to the person's personal representatives.

SCHEDULE 8

PART 1 — Overview and interpretation

Overview of relief

1

(1) This schedule makes provision for relief in the case of certain land transactions connected to alternative finance investment bonds.

(2) It is arranged as follows—

Part 2 provides that certain events relating to a bond are not to be treated as chargeable transactions (except in certain cases),

Part 3 sets out general conditions for the operation of the reliefs in Part 4,

Part 4 provides for relief in the case of certain transactions (and withdrawal of that relief),

Part 5 makes provision about supplementary matters including when the reliefs in Part 4 are not available.

Meaning of “alternative finance investment bond”

2

In this schedule, “alternative finance investment bond” means arrangements to which section 564G of the Income Tax Act 2007 (c.3) (investment bond arrangements) applies.

Interpretation

3

In this schedule—

“bond assets”, “bond-holder”, “bond-issuer” and “capital” have the meaning given by section 564G of the Income Tax Act 2007 (c.3),

“prescribed” means prescribed in regulations made by the Scottish Ministers,

“qualifying interest” means a major interest in land other than a lease for a period of 21 years or less.

PART 2 — Issue, transfer and redemption of rights under bond not to be treated as chargeable transaction

The relief

4

For the purposes of this Act—

(a) the bond-holder under an alternative finance investment bond is not treated as having an interest in the bond assets,

(b) the bond-issuer under such a bond is not treated as a trustee of the bond assets.

Relief not available where bond-holder acquires control of underlying asset

5

(1) Paragraph 4 does not apply if control of the underlying asset is acquired by—

(a) a bond-holder, or

(b) a group of connected bond-holders.

(2) A bond-holder (BH), or a group of connected bond-holders, acquires control of the underlying asset if—

(a) the rights of bond-holders under an alternative finance investment bond include the right of management and control of the bond assets, and

(b) BH, or the group, acquires sufficient rights to enable BH, or the members of the group acting jointly, to exercise the right of management and control of the bond assets to the exclusion of any other bond-holders.

6

(1) But paragraph 5(1) does not apply (and accordingly, section 564S of the Income Tax Act 2007 applies by virtue of paragraph 4) in either of the following cases.

(2) The first case is where—

(a) at the time that the rights were acquired BH (or all the connected bond-holders) did not know and had no reason to suspect that the acquisition enabled the exercise of the right of management and control of the bond assets to the exclusion of other bond-holders, and

(b) as soon as reasonably practicable after BH (or any of the bond-holders) becomes aware that the acquisition enables that exercise, BH transfers (or some or all of the bond-holders transfer) sufficient rights for that exercise no longer to be possible.

(3) The second case is where BH—

(a) underwrites a public offer of rights under the bond, and

(b) does not exercise the right of management and control of the bond assets.

(4) In this paragraph, “underwrite”, in relation to an offer of rights under a bond, means to agree to make payments of capital under the bond in the event that other persons do not make those payments.

PART 3 — General conditions for operation of reliefs etc.

Introduction

7

This Part of this schedule defines conditions A to G for the purposes of paragraphs 15 to 21.

Condition A

8

Condition A is that one person (P) and another (Q) enter into arrangements under which—

(a) P transfers to Q a qualifying interest in land (“the first transaction”), and

(b) P and Q agree that when the interest ceases to be held by Q as mentioned in paragraph 9(b), Q will transfer the interest to P.

Condition B

9

Condition B is that—

(a) Q, as bond-issuer, enters into an alternative finance investment bond (whether before or after entering into the arrangements mentioned in paragraph 8), and

(b) the interest in land to which those arrangements relate is held by Q as a bond asset.

Condition C

10

(1) Condition C is that, for the purpose of generating income or gains for the alternative finance investment bond—

(a) Q and P enter into a leaseback agreement, or

(b) such other condition or conditions as may be specified in regulations made by the Scottish Ministers is or are met.

(2) For the purposes of condition C, Q and P enter into a leaseback agreement if Q grants to P, out of the interest transferred to Q—

(a) a lease (if the interest transferred is the interest of the owner), or

(b) a sub-lease (if the interest transferred is the tenant's right over or interest in land subject to a lease).

Condition D

11

(1) Condition D is that, before the end of the period of 120 days beginning with the effective date of the first transaction, Q provides the Tax Authority with the prescribed evidence that a satisfactory standard security has been registered in the Land Register of Scotland.

(2) A security is satisfactory for the purposes of condition D if it—

(a) is a security ranking first granted over the interest transferred to Q,

(b) is in favour of the Tax Authority, and

(3) That amount is the total of—

(a) the amount of the tax which would (apart from paragraph 15) be chargeable on the first transaction if the chargeable consideration for that transaction had been the market value of the interest at that time, and

(b) any interest and any penalties which would for the time being be payable on or in respect of that amount of tax, if the tax had been due and payable (but not paid) in respect of the first transaction.

Condition E

12

Condition E is that the total of the payments of capital made to Q before the termination of the bond is not less than 60% of the value of the interest in the land at the time of the first transaction.

Condition F

13

Condition F is that Q holds the interest in land as a bond asset until the termination of the bond.

Condition G

14

(1) Condition G is that—

(a) before the end of the period of 30 days beginning with the date on which the interest in the land ceases to be held as a bond asset, that interest is transferred by Q to P (“the second transaction”), and

(b) the second transaction is effected not more than 10 years after the first transaction.

(2) The Scottish Ministers may by regulations amend sub-paragraph (1)(b) by substituting for the period mentioned there such other period as may be specified.

PART 4 — Relief for certain transactions

The relief: first transaction

15

(1) The first transaction is exempt from charge if—

(a) it relates to an interest in land in Scotland, and

(b) each of the conditions A to C is met before the end of the period of 30 days beginning with the effective date of the transaction.

(2) This paragraph is subject to—

(a) paragraphs 21 and 22 (where the interest in land is replaced as the bond asset by an interest in other land),

(b) paragraph 24.

Withdrawal of relief

16

(1) Relief under paragraph 15 is withdrawn if—

(a) the interest in the land is transferred by Q to P without conditions E and F having been met,

(b) the period mentioned in paragraph 14(1)(b) expires without each of those conditions having been met, or

(2) The relief is also withdrawn if condition D is not met.

Amount of tax chargeable where relief withdrawn

17

Where relief is withdrawn, the amount of tax chargeable is determined in accordance with paragraph 18.

18

The amount chargeable is the tax that would have been chargeable in respect of the first transaction (but for the relief under paragraph 15) if the chargeable consideration for that transaction had been an amount equal to—

(a) the market value of the subject-matter of the transaction, or

(b) if the acquisition was the grant of a lease, the rent.

Relief from land and buildings transaction tax: second transaction

19

(1) The second transaction is exempt from charge if—

(a) each of conditions A to G is met, and

(b) the provisions of this Act in relation to the first transaction are complied with.

(2) This paragraph is subject to—

(a) paragraphs 21 and 22 (where the interest in land is replaced as the bond asset by an interest in other land),

(b) paragraph 24.

Discharge of security when conditions for relief met

20

If, after the effective date of the second transaction, Q provides the Tax Authority with the prescribed evidence that each of conditions A to C and E to G has been met, the land ceases to be subject to the security registered in pursuance of condition D.

PART 5 — Supplementary

Substitution of asset

21

(1) This paragraphs applies if—

(a) conditions A to C and G are met in relation to an interest in land (“the original land”),

(b) Q ceases to hold the original land as a bond asset (and, accordingly, transfers it to P) before the termination of the alternative finance investment bond,

(c) P and Q enter into further arrangements falling within paragraph 8 relating to an interest in other land (“the replacement land”), and

(d) the value of the interest in the replacement land at the time that it is transferred from P to Q is greater than or equal to the value of the interest in the original land at the time of the first transaction.

(2) Paragraphs 15 to 20 apply—

(a) in relation to the original land with the modification set out in sub-paragraph (3), and

(b) in relation to the replacement land with the modifications set out in sub-paragraph (4).

(3) Condition F does not need to be met in relation to the original land if conditions A, B, C, F and G (as modified by sub-paragraph (4)) are met in relation to the replacement land.

(4) In relation to the replacement land—

(a) condition E applies as if the reference to the interest in the land were a reference to the interest in the original land, and

(b) condition G apples as if the reference in paragraph 14(1)(b) to the first transaction were a reference to the first transaction relating to the original land.

(5) If the replacement land is in Scotland, the original land ceases to be subject to the security registered in pursuance of condition D when—

(a) Q provides the Tax Authority with the prescribed evidence that condition G is met in relation to the original land, and

(b) condition D is met in relation to the replacement land.

(6) If the replacement land is not in Scotland, the original land ceases to be subject to the security registered in pursuance of condition D when Q provides the Tax Authority with the prescribed evidence that—

(a) condition G is met in relation to the original land, and

(b) each of conditions A to C is met in relation to the replacement land.

22

(1) Paragraph 21 also applies where the replacement land is replaced by further replacement land.

(2) In that event—

(a) the references to the original land (except those in paragraph 21(4)) are to be read as references to the replacement land, and

(b) the references to the replacement land are to be read as references to the further replacement land.

Tax Authority to register discharge of security

23

(1) Where a security is discharged in accordance with paragraph 20 or 21(5) or (6), the Tax Authority must register the discharge in the Land Register of Scotland.

(2) The Tax Authority must do so within the period of 30 days beginning with the date on which Q provides the evidence in question.

Relief not available where bond-holder acquires control of underlying asset

24

(1) The reliefs provided by paragraphs 15 and 19 (and paragraph 21 so far as it relates to those paragraphs) are not available if control of the underlying asset is acquired by—

(a) a bond-holder, or

(b) a group of connected bond-holders.

(2) A bond-holder (BH), or a group of connected bond-holders, acquires control of the underlying asset if—

(a) the rights of bond-holders under an alternative finance investment bond include the right of management and control of the bond assets, and

(b) BH, or the group, acquires sufficient rights to enable BH, or the members of the group acting jointly, to exercise the right of management and control of the bond assets to the exclusion of any other bond-holders.

(3) In accordance with sub-paragraph (1), in the case of relief provided by paragraph 15—

(a) if BH, or the group, acquires control of the underlying asset before the end of the period of 30 days beginning with the effective date of the first transaction, paragraph 15 does not apply, and

(b) if BH, or the group, acquires control of the underlying asset after the end of that period and conditions A to C have been met, the relief is treated as withdrawn under paragraph 16.

25

(1) But paragraph 24 does not prevent the reliefs being available in either of the following cases.

(2) The first case is where—

(a) at the time that the rights were acquired BH (or all of the connected bond-holders) did not know and had no reason to suspect that the acquisition enabled the exercise of the right of management and control of the bond assets to the exclusion of other bond-holders, and

(b) as soon as reasonably practicable after BH (or any of the bond-holders) becomes aware that the acquisition enables that exercise, BH transfers (or some or all of the bond-holders transfer) sufficient rights for that no longer to be possible.

(3) The second case is where BH—

(a) underwrites a public offer of rights under the bond, and

(b) does not exercise the right of management and control of the bond assets.

(4) In this paragraph, “underwrite”, in relation to an offer of rights under a bond, means to agree to make payments of capital under the bond in the event that other persons do not make those payments.

Relief not available if purpose of arrangements is improper

26

The reliefs provided by paragraph 15 and 19 (and paragraph 21 so far as it relates to those paragraphs) are not available if the arrangements mentioned in paragraph 8—

(a) are not effected for genuine commercial reasons, or

(b) form part of arrangements of which the main purpose, or one of the main purposes, is the avoidance of liability to the tax.

SCHEDULE 9

The relief

1

A land transaction—

(a) entered into in pursuance of the crofting community right to buy, and

(b) under which two or more crofts are being bought,

is exempt from charge.

2

The tax chargeable in respect of the transaction is the prescribed proportion of the tax that would otherwise be chargeable but for this paragraph.

3

The prescribed proportion is such proportion as may be prescribed by the Scottish Ministers by order.

Interpretation

4

In this schedule “crofting community right to buy” means the right exercisable by a crofting community body under Part 3 of the Land Reform (Scotland) Act 2003 (asp 2).

SCHEDULE 10

PART 1 — Introductory

Overview

1

(1) This schedule provides for relief for certain transactions involving companies.

(2) It is arranged as follows—

Part 2 provides for when relief is available,

Part 3 provides for when the relief is withdrawn,

Part 3A provides for recovery of tax where relief is withdrawn,

Part 4 defines expressions used in this schedule.

PART 2 — The relief

The relief

2

A land transaction is exempt from charge if the seller and buyer are companies that at the effective date of the transaction are members of the same group.

Restrictions on availability of relief

3

Relief under this schedule is not available if at the effective date of the transaction there are arrangements in existence by virtue of which, at that or some later time, a person has or could obtain, or any persons together have or could obtain, control of the buyer but not of the seller.

4

Paragraph 3 does not apply to arrangements to which paragraph 9, 10 or 10A applies.

5

Relief under this schedule is not available if the transaction is effected in pursuance of, or in connection with, arrangements under which—

(a) the consideration, or any part of the consideration, for the transaction is to be provided or received (directly or indirectly) by a person other than a group company, or

(b) the seller and the buyer are to cease to be members of the same group by reason of the buyer ceasing to be a 75% subsidiary of the seller or a third company.

6

Arrangements are within paragraph 5(a) if under them the seller or the buyer, or another group company, is to be enabled to provide any of the consideration, or is to part with any of it, by or in consequence of the carrying out of a transaction or transactions involving, or any of them involving, a payment or other disposition by a person other than a group company.

7

Paragraph 5(b) does not apply to arrangements to which paragraph 9 or 10 applies.

8

Relief under this schedule is not available if the transaction—

(a) is not effected for bona fide commercial reasons, or

(b) forms part of arrangements the main purpose, or one of the main purposes, of which is the avoidance of liability to the tax.

Arrangements that do not restrict availability of relief

9

This paragraph applies to arrangements entered into with a view to an acquisition of shares by a company (“the acquiring company”)—

(a) in relation to which section 75 of the Finance Act 1986 (c.41) (stamp duty: acquisition relief) will apply,

(b) in relation to which the conditions for relief under that section will be met, and

10

This paragraph applies to arrangements in so far as they are for the purpose of facilitating a transfer of the whole or part of the business of a company to another company in relation to which—

(a) section 96 of the Finance Act 1997 (c.16) (stamp duty relief: demutualisation of insurance companies) is intended to apply, and

(b) the conditions for relief under that section are intended to be met.

Interpretation

11

In this Part of this schedule—

“control” has the meaning given by section 1124 of the Corporation Tax Act 2010 (c.4),

“group company” means a company that at the effective date of the transaction is a member of the same group as the seller and the buyer.

PART 3 — Withdrawal of relief

Overview

12

This Part of this schedule is arranged as follows—

paragraphs 13 to 19 provide for circumstances where relief under this schedule is withdrawn,

paragraphs 20 to 31 provide for circumstances in which, despite paragraphs 13 to 19, relief is not withdrawn, and

paragraphs 32 to 40 provide for the application of paragraphs 13 to 31 where there are successive transactions.

Withdrawal of relief

13

Relief under this schedule is withdrawn or partially withdrawn where—

(a) paragraphs 14 and 15 apply, or

(b) paragraph 15A applies.

14

This paragraph applies where the buyer in the transaction which is exempt from charge by virtue of this schedule (“the relevant transaction”) ceases to be a member of the same group as the seller—

(a) before the end of the period of 3 years beginning with the effective date of the transaction, or

(b) in pursuance of, or in connection with, arrangements made before the end of that period.

15

This paragraph applies where, at the time the buyer ceases to be a member of the same group as the seller (“the relevant time”), it or a relevant associated company holds a chargeable interest—

(a) that was acquired by the buyer under the relevant transaction, or

(b) that is derived from a chargeable interest so acquired,

and that has not subsequently been acquired at market value under a chargeable transaction for which relief under this schedule was available but not claimed.

Amount of tax chargeable where relief withdrawn

16

Where relief is withdrawn, the amount of tax chargeable is determined in accordance with paragraph 17.

17

The amount chargeable is the tax that would have been chargeable in respect of the relevant transaction but for the relief if the chargeable consideration for that transaction had been an amount equal to—

(a) the market value of the subject-matter of the transaction, or

(b) if the acquisition was the grant of a lease, the rent.

Amount of tax chargeable where relief partially withdrawn

18

Where relief is partially withdrawn, the amount of tax chargeable is an appropriate proportion of the amount determined in accordance with paragraph 17.

19

An “appropriate proportion” means an appropriate proportion having regard to—

(a) the subject-matter of the relevant transaction, and

(b) what is held at the relevant time by the buyer or, as the case may be, by the buyer and its relevant associated companies.

Case where relief not withdrawn: winding up

20

Relief under this schedule is not withdrawn where the buyer ceases to be a member of the same group as the seller by reason of anything done for the purposes of, or in the course of, winding up the seller or another company that is above the seller in the group structure.

Cases where relief not withdrawn: stamp duty reliefs

21

Relief under this schedule is not withdrawn where—

(a) the buyer ceases to be a member of the same group as the seller as a result of an acquisition of shares by another company (“the acquiring company”) in relation to which—

(i) section 75 of the Finance Act 1986 (c.41) (stamp duty: acquisition relief) applies, and

(ii) the conditions for relief under that section are met, and

(b) the buyer is immediately after that acquisition a member of the same group as the acquiring company.

22

Relief under this schedule is not withdrawn where—

(a) the buyer ceases to be a member of the same group as the seller as a result of the transfer of the whole or part of the seller's business to another company (“the acquiring company”) in relation to which—

(i) section 96 of the Finance Act 1997 (c.16) (stamp duty relief: demutualisation of insurance companies) applies, and

(ii) the conditions for relief under that section are met, and

(b) the buyer is immediately after that transfer a member of the same group as the acquiring company.

23

But where, in a case to which paragraph 21 or 22 applies—

(a) the buyer ceases to be a member of the same group as the acquiring company in the circumstances mentioned in paragraph 24, and

(b) at the time the buyer ceases to be a member of the same group as the acquiring company, it or a relevant associated company holds a chargeable interest to which paragraph 25 applies,

this schedule applies as if the buyer had then ceased to be a member of the same group as the seller.

24

The circumstances referred to in paragraph 23(a) are that the buyer ceases to be a member of the same group as the acquiring company—

(a) before the end of the period of 3 years beginning with the effective date of the transaction which is exempt from charge by virtue of this schedule (“the relevant transaction”), or

Reading this document does not replace reading the official text published on legislation.gov.uk. Contains public sector information licensed under the Open Government Licence v3.0. We assume no responsibility for any inaccuracies arising from the conversion of the original CLML XML to this format.

This text is published under legislation.gov.uk's own terms of reuse, not a Legalize or public-domain licence. legislation.gov.uk
Open Government Licence v3.0 (attribution required)
© Crown and database right. Derived from content available under the Open Government Licence v3.0 from legislation.gov.uk.