Finance Act 2003

Proceedings in county court or sheriff court

5

• (1) Tax due and payable may be sued for and recovered from the person charged as a debt due to the Crown by proceedings ...—

• (a) in the county court, or

• (b) in a sheriff court.

• (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (3) In Northern Ireland—

• (a) the reference in sub-paragraph (1) to the county court is to a county court held for a division under the County Courts (Northern Ireland) Order 1980 (S.I. 1980/397 (N.I. 3));

• (b) proceedings may not be brought under this paragraph if the amount exceeds the limit specified in Article 10(1) of that Order;

• (c) Part III of that Order (general civil jurisdiction) applies for the purposes of this paragraph; and

• (d) sections 21 and 42(2) of the Interpretation Act (Northern Ireland) 1954 (c. 33 (N.I.)) apply as if any reference in those provisions to an enactment included this paragraph.

Proceedings in High Court or Court of Session

6

Tax may be sued for and recovered from the person charged—

• (a) as a debt due to the Crown, or

• (b) by any other means by which a debt of record or otherwise due to the Crown may be sued for and recovered,

by proceedings in the High Court or, in Scotland, in the Court of Session sitting as the Court of Exchequer.

Evidence of unpaid tax

7

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SCHEDULE 13

Part 1 — Power of authorised officer to call for documents or information from taxpayer

Notice requiring taxpayer to deliver documents or provide information

1

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Requirement of consent of General or Special Commissioner

2

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Contents of notice under this Part

3

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Summary of reasons to be given

4

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Power to take copies of documents etc

5

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Part 2 — Power of authorised officer to call for documents from third party

Notice requiring documents to be delivered or made available

6

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Requirement of consent of General or Special Commissioner

7

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Contents of notice under paragraph 6

8

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Copy of notice to be given to taxpayer

9

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Summary of reasons to be given

10

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Power to give notice relating to unnamed taxpayer or taxpayers

11

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Contents of notice under paragraph 11

12

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Power to take copies of documents etc

13

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Part 3 — Power to call for papers of tax accountant

Power to call for papers of tax accountant

14

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When notice may be given

15

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Requirement of consent of appropriate judicial authority

16

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Contents of notice

17

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Power to take copies of documents etc

18

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Part 4 — Restrictions on powers under Parts 1 to 3

Introduction

19

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Personal records or journalistic material

20

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Documents or information relating to pending appeal

21

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Barristers, advocates and solicitors

22

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Provision of copies instead of original documents

23

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Documents originating more than six years before date of notice

24

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Documents subject to legal privilege

25

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Documents belonging to auditor or tax adviser

26

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Documents belonging to auditor or tax adviser: information to be disclosed

27

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Part 5 — Powers of board to call for documents or information

Notice requiring delivery of documents or provision of information

28

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Contents of notice

29

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Power to take copies of documents etc

30

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Exclusion of personal records or journalistic material

31

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Part 6 — Order of judicial authority for the delivery of documents

Order for the delivery of documents

32

• (1) The appropriate judicial authority may make an order under this paragraph if satisfied on information on oath given by an authorised officer of the Board—

• (a) that there is reasonable ground for suspecting that an offence involving serious fraud in connection with, or in relation to, stamp duty land tax has been or is about to be committed, and

• (b) that documents that may be required as evidence for the purposes of any proceedings in respect of such an offence are or may be in the power or possession of any person.

• (2) An order under this paragraph is an order requiring the person who appears to the authority to have in his possession or power the documents specified or described in the order to deliver them to an officer of the Board within—

• (a) ten working days after the day on which notice of the order is served on him, or

• (b) such shorter or longer period as may be specified in the order.

For this purpose a “working day” means any day other than a Saturday, Sunday or public holiday.

• (3) The appropriate judicial authority is—

• (a) in England and Wales, a circuit judge;

• (b) in Scotland, a sheriff;

• (c) in Northern Ireland, a county court judge.

• (4) Where in Scotland the information relates to persons residing or having places of business at addresses situated in different sheriffdoms—

• (a) an application for an order may be made to the sheriff for the sheriffdom in which any of the addresses is situated, and

• (b) where the sheriff makes an order in respect of a person residing or having a place of business in his own sheriffdom, he may also make orders in respect of all or any of the other persons to whom the information relates (whether or not they have an address within the sheriffdom).

• (5) In sub-paragraph (1) an “authorised officer of the Board” means an officer of the Board authorised by the Board for the purposes of this Part of this Schedule.

• (6) The Inland Revenue may make provision by regulations as to—

• (a) the procedures for approving in any particular case the decision to apply for an order under this Part of this Schedule, and

• (b) the descriptions of officer by whom such approval may be given.

Notice of application for order

33

• (1) A person is entitled—

• (a) to notice of the intention to apply for an order against him under paragraph 32, and

• (b) to appear and be heard at the hearing of the application,

unless the appropriate judicial authority is satisfied that this would seriously prejudice the investigation of the offence.

• (2) The Inland Revenue may make provision by regulations as to the notice to be given, the contents of the notice and the manner of giving it.

Obligations of person given notice of application

34

• (1) A person who has been given notice of intention to apply for an order under paragraph 32 must not—

• (a) conceal, destroy, alter or dispose of any document to which the application relates, or

• (b) disclose to any other person information or any other matter likely to prejudice the investigation of the offence to which the application relates.

This is subject to the following qualifications.

• (2) Sub-paragraph (1)(a) does not prevent anything being done—

• (a) with the leave of the appropriate judicial authority,

• (b) with the written permission of an officer of the Board,

• (c) after the application has been dismissed or abandoned, or

• (d) after any order made on the application has been complied with.

• (3) Sub-paragraph (1)(b) does not prevent a professional legal adviser from disclosing any information or other matter—

• (a) to, or to a representative of, a client of his in connection with the giving by the adviser of legal advice to the client, or

• (b) to any person—

• (i) in contemplation or, or in connection with, legal proceedings, and

• (ii) for the purposes of those proceedings.

This sub-paragraph does not apply in relation to any information or other matter that is disclosed with a view to furthering a criminal purpose.

• (4) A person who fails to comply with the obligation in sub-paragraph (1)(a) or (b) may be dealt with as if he had failed to comply with an order under paragraph 32.

Exception of items subject to legal privilege

35

• (1) This Part of this Schedule does not apply to items subject to legal privilege.

• (2) Items “subject to legal privilege” means—

• (a) communications between a professional legal adviser and his client or any person representing his client made in connection with the giving of legal advice to the client;

• (b) communications between a professional legal adviser and his client or any person representing his client, or between such an adviser or his client or any such representative and any other person, made in connection with or in contemplation of legal proceedings and for the purposes of such proceedings;

• (c) items enclosed with or referred to in such communications and made—

• (i) in connection with the giving of legal advice, or

• (ii) in connection with or in contemplation of legal proceedings and for the purposes of such proceedings,

when they are in possession of a person entitled to possession of them.

• (3) Items held with the intention of furthering a criminal purpose are not subject to legal privilege.

Resolution of disputes as to legal privilege

36

• (1) The Inland Revenue may make provision by regulations for the purposes of this Part of this Schedule for the resolution of disputes as to whether a document, or part of a document, is an item subject to legal privilege.

• (2) The regulations may, in particular, make provision as to—

• (a) the custody of the document whilst its status is being decided,

• (b) the appointment of an independent, legally qualified person to decide the matter,

• (c) the procedures to be followed, and

• (d) who is to meet the costs of the proceedings.

Complying with an order

37

• (1) The Inland Revenue may make provision by regulations as to how a person is to comply with an order under paragraph 32.

• (2) The regulations may, in particular, make provision as to—

• (a) the officer of the Board to whom the documents are to be produced,

• (b) the address to which the documents are to be taken or sent, and

• (c) the circumstances in which sending documents by post complies with the order.

• (3) Where an order relates to a document in electronic or magnetic form, the order shall be taken to require the person to deliver the information recorded in the document in a form in which it is visible and legible.

Document not to be retained if photograph or copy sufficient

38

Where a document delivered to an officer of the Board under this Part of this Schedule is of such a nature that a photograph or copy of it would be sufficient—

• (a) for use as evidence at a trial for an offence, or

• (b) for forensic examination or for investigation in connection with an offence,

it shall not be retained longer than is necessary to establish that fact and to obtain the photograph or copy.

Access to or supply of photograph or copy of documents delivered

39

• (1) If a request for permission to be granted access to a document that—

• (a) has been delivered to an officer of the Board under this Part of this Schedule, and

• (b) is retained by the Board for the purposes of investigating an offence,

is made to the officer in overall charge of the investigation by a person who had custody or control of the document immediately before it was so delivered, or by someone acting on behalf of any such person, the officer shall allow the person who made the request access to it under the supervision of an officer of the Board.

• (2) If a request for a photograph or copy of any such document is made to the officer in overall charge of the investigation by a person who had custody or control of the document immediately before it was so delivered, or by someone acting on behalf of any such person, the officer shall—

• (a) allow the person who made the request access to it under the supervision of an officer of the Board for the purpose of photographing or copying it, or

• (b) photograph or copy it, or cause it to be photographed or copied.

• (3) Where a document is photographed or copied under sub-paragraph (2)(b) the photograph or copy shall be supplied to the person who made the request.

• (4) The photograph or copy shall be supplied within a reasonable time from the making of the request.

• (5) There is no duty under this paragraph to grant access to, or to supply a photograph or copy of, a document if the officer in overall charge of the investigation for the purposes of which it was delivered has reasonable grounds for believing that to do so would prejudice—

• (a) that investigation,

• (b) the investigation of an offence other than the offence for the purposes of the investigation of which the document was delivered, or

• (c) any criminal proceedings that may be brought as a result of—

• (i) the investigation of which he is in charge, or

• (ii) any such investigation as is mentioned in paragraph (b).

• (6) The references in this paragraph to the officer in overall charge of the investigation is to the person whose name and address are endorsed on the order concerned as being the officer so in charge.

Sanction for failure to comply with order

40

• (1) A person who fails to comply with an order under this Part of this Schedule may be dealt with as if he had committed a contempt of the court.

• (2) For this purpose “the court” means—

• (a) in relation to an order made by a circuit judge, the Crown Court;

• (b) in relation to an order made by a sheriff, a sheriff court;

• (c) in relation to an order made by a county court judge in Northern Ireland, a county court in Northern Ireland.

Notice of order, etc

41

The Inland Revenue may make provision by regulations as to the circumstances in which notice of an order under paragraph 32, or of an application for such an order, is to be treated as having been given.

General provisions about regulations

42

Regulations under this Part of this Schedule may contain such incidental, supplementary and transitional provision as appears to the Inland Revenue to be appropriate.

Part 7 — Entry with warrant to obtain evidence of offence

Power to issue warrant

43

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Meaning of offence involving serious fraud

44

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Approval of application by Board

45

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Extent of powers conferred by warrant

46

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Exercise of powers conferred by warrant

47

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Items subject to legal privilege

48

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Procedure where documents etc are removed

49

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Document not to be retained if photograph or copy sufficient

50

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Access to or supply of photograph or copy of items removed

51

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Endorsement and custody etc of warrant

52

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Part 8 — Falsification etc of documents

Falsification etc of documents

53

• (1) A person commits an offence if the person intentionally—

• (a) falsifies, conceals, destroys or otherwise disposes of a relevant document, or

• (b) causes or permits the falsification, concealment, destruction or disposal of a relevant document.

• (2) A relevant document is a document that the person has been required by an order under Part 6 of this Schedule to deliver.

• (3) A person does not commit an offence under this paragraph if the person acts—

• (a) with the written permission of the tribunal or an officer of Revenue and Customs, or

• (b) after the document has been delivered.

• (4) A person does not commit an offence under this paragraph if the person acts after the end of the period of 2 years beginning with the date on which the order is made, unless before the end of that period an officer of Revenue and Customs has notified the person in writing that the order has not been complied with to the officer's satisfaction.

• (5) A person guilty of an offence under this paragraph is liable—

• (a) on summary conviction, to a fine not exceeding the statutory maximum;

• (b) on conviction on indictment, to imprisonment for a term not exceeding 2 years or a fine or to both.

SCHEDULE 14

Determination of penalties and appeals

1

The provisions of this Schedule apply in relation to penalties under this Part.

Determination of penalty by officer of the Board

2

• (1) An officer of the Board authorised for the purposes of this paragraph may make a determination—

• (a) imposing the penalty, and

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

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

• (3) The notice must also state—

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

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

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

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

Alteration of penalty determination

3

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

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

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

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

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

Liability of personal representatives

4

If a person liable to a penalty has died—

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

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

Appeal against penalty determination

5

• (1) An appeal may be made against the determination of a penalty.

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

• (3) The notice of appeal must specify the grounds of appeal.

• (4) On an appeal under this paragraph that is notified to the First-tier Tribunal, the tribunal may—

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

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

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

• (d) if the amount determined appears ... to be insufficient, increase it to such amount, not exceeding the permitted maximum, as the First-tier Tribunal considers appropriate.

• (5) The provisions of paragraphs 36A to 36I of Schedule 10 apply to appeals under this paragraph.

Further appeal

6

• (1) In addition to any right of appeal on a point of law under section 11(2) of the Tribunals, Courts and Enforcement Act 2007, the person liable to the penalty may appeal to the Upper Tribunal against the amount of the penalty which has been determined under paragraph (5), but not against any decision which falls under section 11(5)(d) or (e) of that Act and was made in connection with the determination of the amount of the penalty.

• (1A) Section 11(3) and (4) of the Tribunals, Courts and Enforcement Act 2007 applies to the right of appeal under sub-paragraph (1) as it applies to the right of appeal under section 11(2) of that Act.

• (2) On an appeal under this paragraph the Upper Tribunal has the same powers as are conferred on the First-tier Tribunal by paragraph 5(4) above.

• (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Penalty proceedings before the court

7

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

• (a) in the High Court, or

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

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

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

• (b) in the name of the Attorney General.

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

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

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

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

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

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

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

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

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

Time limit for determination of penalties

8

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

• (2) The general rule is that—

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

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

more than 4 years after the date on which the penalty was incurred or, in the case of a daily penalty, began to be incurred (“the relevant date”) . This rule is subject to the following provisions of this paragraph.

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

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

• (4A) Where a person is liable to a penalty in a case involving a loss of tax brought about carelessly by the person (or by another person acting on that person's behalf), the penalty may be determined, or the proceedings may be brought, at any time not more than 6 years after the relevant date (subject to sub-paragraphs (4B) and (5)).

• (4B) Where a person is liable to a penalty in a case involving a loss of tax—

• (a) brought about deliberately by the person (or by another person acting on that person's behalf),

• (b) attributable to a failure by the person to comply with an obligation under section 76(1) or paragraph 3(3)(a), 4(3)(a) or 8(3)(a) of Schedule 17A, or

• (c) attributable to arrangements in respect of which the person has failed to comply with an obligation under section 309, 310 or 313 of the Finance Act 2004 (obligation of parties to tax avoidance schemes to provide information to Her Majesty's Revenue and Customs),

the penalty may be determined, or the proceedings may be brought, at any time not more than 20 years after the relevant date.

• (4C) Paragraph 31A of Schedule 10 (losses brought about carelessly or deliberately) applies for the purpose of this paragraph.

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

SCHEDULE 15

Part 1 — General provisions

Partnerships

1

In this Part of this Act a “partnership” means—

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

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

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

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

Legal personality of partnership disregarded

2

• (1) For the purposes of this Part of this Act—

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

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

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

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

Continuity of partnership

3

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

Partnership not to be regarded as unit trust scheme etc

4

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

Part 2 — Ordinary partnership transactions

Introduction

5

• (1) This Part of this Schedule applies to transactions entered into as purchaser by or on behalf of the members of a partnership, other than transactions within Part 3 of this Schedule (transactions to which special provisions apply).

Responsibility of partners

6

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

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

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

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

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

Joint and several liability of responsible partners

7

• (1) Where the responsible partners are liable—

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

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

• (c) to a penalty under this Part of this Act or to interest on such a penalty,

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

• (1A) No amount may be recovered by virtue of sub-paragraph (1)(a) or (b) from a person who did not become a responsible partner until after the effective date of the transaction in respect of which the tax is payable.

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

• (3) The relevant time for this purpose is—

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

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

Representative partners

8

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

• (2) This includes making the declaration required by paragraph 1(1)(c) of Schedule 10 ... (declaration that return ... is complete and correct).

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

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

Part 3 — Transactions to which special provisions apply

Introduction

9

• (1) This Part of this Schedule applies to certain transactions involving—

• (a) the transfer of a chargeable interest to a partnership (paragraph 10),

• (b) the transfer of an interest in a partnership (paragraphs 14, 17, 31 and 32), or

• (c) the transfer of a chargeable interest from a partnership (paragraph 18).

• (2) References in this Part of this Schedule to the transfer of a chargeable interest include—

• (a) the grant or creation of a chargeable interest,

• (b) the variation of a chargeable interest, and

• (c) the surrender, release or renunciation of a chargeable interest.

Transfer of interest in land into a partnership

10

• (1) This paragraph applies where—

• (a) a partner transfers a chargeable interest to the partnership, or

• (b) a person transfers a chargeable interest to a partnership in return for an interest in the partnership, or

• (c) a person connected with—

• (i) a partner, or

• (ii) a person who becomes a partner as a result of or in connection with the transfer,

transfers a chargeable interest to the partnership.

It applies whether the transfer is in connection with the formation of the partnership or is a transfer to an existing partnership.

• (2) The chargeable consideration for the transaction shall (subject to paragraph 13) be taken to be equal to—

$$MV×(100-SLP)%$where— MV is the market value of the interest transferred, and SLP is the sum of the lower proportions.$

• (5) Paragraph 12 provides for determining the sum of the lower proportions.

• (6) Paragraph 11 applies ... if the whole or part of the chargeable consideration for the transaction is rent.

• (7) Paragraphs 6 to 8 (responsibility of partners) have effect in relation to a transaction to which this paragraph applies, but the responsible partners are—

• (a) those who were partners immediately before the transfer and who remain partners after the transfer, and

• (b) any person becoming a partner as a result of, or in connection with, the transfer.

• (8) This paragraph has effect subject to any election under paragraph 12A.

Acquisition of partnership interest

11

• (1) This paragraph applies in relation to a transaction to which paragraph 10 applies where the whole or part of the chargeable consideration for the transaction is rent.

• (2) Schedule 5 (amount of tax chargeable: rent) has effect with the modifications set out in sub-paragraphs (2A) to (2C).

• (2A) In paragraph 2—

• (a) for “the net present value of the rent payable over the term of the lease” substitute “ the relevant chargeable proportion of the net present value of the rent payable over the term of the lease ”, and

• (b) for “the net present values of the rent payable over the terms of all the leases” substitute “ the relevant chargeable proportions of the net present values of the rent payable over the terms of all the leases ”.

• (2B) In paragraph 9A(6) —

• (a) for “the annual rent” substitute “ the relevant chargeable proportion of the annual rent ”, and

• (b) for “the total of the annual rents” substitute “ the relevant chargeable proportion of the total of the annual rents ”.

• (2C) For paragraph 9(4) substitute—

(4) Tax chargeable under this Schedule is in addition to any tax chargeable under section 55 or 74(1A) or Schedule 4A ... as they have effect by virtue of paragraph 10 of Schedule 15.

.

• (2D) For the purposes of sub-paragraphs (2A) and (2B) the relevant chargeable proportion is—

$$(100-SLP)%$where SLP is the sum of the lower proportions.$

• (8) Paragraph 12 provides for determining the sum of the lower proportions.

• (9) This paragraph is subject to paragraph 13.

Transfer of interest in land out of a partnership

12

• (1) The sum of the lower proportions in relation to a transaction to which paragraph 10 applies is determined as follows:—

• Step OneIdentify the relevant owner or owners.A person is a relevant owner if—immediately before the transaction, he was entitled to a proportion of the chargeable interest, andimmediately after the transaction, he is a partner or connected with a partner.

• Step TwoFor each relevant owner, identify the corresponding partner or partners.A person is a corresponding partner in relation to a relevant owner if, immediately after the transaction—he is a partner, andhe is the relevant owner or is an individual connected with the relevant owner. (If there is no relevant owner with a corresponding partner, the sum of the lower proportions is nil.)

• Step ThreeFor each relevant owner, find the proportion of the chargeable interest to which he was entitled immediately before the transaction.Apportion that proportion between any one or more of the relevant owner’s corresponding partners.

• Step FourFind the lower proportion for each person who is a corresponding partner in relation to one or more relevant owners.The lower proportion is—the proportion of the chargeable interest attributable to the partner, orif lower, the partner’s partnership share immediately after the transaction.The proportion of the chargeable interest attributable to the partner is—if he is a corresponding partner in relation to only one relevant owner, the proportion (if any) of the chargeable interest apportioned to him (at Step Three) in respect of that owner;if he is a corresponding partner in relation to more than one relevant owner, the sum of the proportions (if any) of the chargeable interest apportioned to him (at Step Three) in respect of each of those owners.

• Step FiveAdd together the lower proportions of each person who is a corresponding partner in relation to one or more relevant owners.The result is the sum of the lower proportions.

• (2) For the purposes of this paragraph persons who are entitled to a chargeable interest as beneficial joint tenants ... shall be taken to be entitled to the chargeable interest as beneficial tenants in common ... in equal shares.

• (3) For the purpose of paragraph (b) of Step 2 a company is to be treated as an individual connected with the relevant owner in so far as it—

• (a) holds property as trustee, and

• (b) is connected with the relevant owner only because of section 1122(6) of the Corporation Tax Act 2010.

Effect of exclusion of transaction from stamp duty land tax

13

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Construction of references to partnership property

14

• (1) This paragraph applies where—

• (a) there is a transfer of an interest in a property-investment partnership,

• (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (c) the relevant partnership property includes a chargeable interest.

• (2) The transfer—

• (a) shall be taken for the purposes of this Part to be a land transaction;

• (b) is a chargeable transaction.

• (3) The purchaser under the transaction is the person who acquires an increased partnership share or, as the case may be, becomes a partner in consequence of the transfer.

• (3A) A transfer to which this paragraph applies is a Type A transfer if it takes the form of arrangements entered into under which—

• (a) the whole or part of a partner's interest as partner is acquired by another person (who may be an existing partner), and

• (b) consideration in money or money's worth is given by or on behalf of the person acquiring the interest.

• (3B) A transfer to which this paragraph applies is also a Type A transfer if it takes the form of arrangements entered into under which—

• (a) a person becomes a partner,

• (b) the interest of an existing partner in the partnership is reduced or an existing partner ceases to be a partner, and

• (c) there is a withdrawal of money or money's worth from the partnership by the existing partner mentioned in paragraph (b) (other than money or money's worth paid from the resources available to the partnership prior to the transfer).

• (3C) Any other transfer to which this paragraph applies is a Type B transfer.

• (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (5) The “relevant partnership property”, in relation to a Type A transfer of an interest in a partnership, is every chargeable interest held as partnership property immediately after the transfer, other than—

• (a) any chargeable interest that was transferred to the partnership in connection with the transfer;

• (b) a lease to which paragraph 15 (exclusion of market rent leases) applies , and

• (c) any chargeable interest that is not attributable economically to the interest in the partnership that is transferred.

• (5A) The “relevant partnership property”, in relation to a Type B transfer of an interest in a partnership, is every chargeable interest held as partnership property immediately after the transfer, other than—

• (a) any chargeable interest that was transferred to the partnership in connection with the transfer,

• (b) a lease to which paragraph 15 (exclusion of market rent leases) applies,

• (c) any chargeable interest that is not attributable economically to the interest in the partnership that is transferred,

• (d) any chargeable interest that was transferred to the partnership on or before 22 July 2004,

• (e) any chargeable interest in respect of whose transfer to the partnership an election has been made under paragraph 12A, and

• (f) any other chargeable interest whose transfer to the partnership did not fall within paragraph 10(1)(a), (b) or (c).

• (6) The chargeable consideration for the transaction shall be taken to be equal to a proportion of the market value of the relevant partnership property.

• (7) That proportion is—

• (a) if the person acquiring the interest in the partnership was not a partner before the transfer, his partnership share immediately after the transfer;

• (b) if he was a partner before the transfer, the difference between his partnership share before and after the transfer.

• (8) In this paragraph—

• “property-investment partnership” means a partnership whose sole or main activity is investing or dealing in chargeable interests (whether or not that activity involves the carrying out of construction operations on the land in question);

• “construction operations” has the same meaning as in Chapter 3 of Part 3 of the Finance Act 2004 (see section 74 of that Act).

• (9) An interest in respect of the transfer of which this paragraph applies shall be treated as a chargeable interest for the purposes of paragraph 3(1) of Schedule 7 to the extent that the relevant partnership property consists of a chargeable interest.

SCHEDULE 16

Meaning of “settlement” and “bare trust”

1

• (1) In this Part “settlement” means a trust that is not a bare trust.

• (2) In this Part a “bare trust” means a trust under which property is held by a person as trustee—

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

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

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

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

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

Interests of beneficiaries under certain trusts

2

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

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

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

Acquisition etc by bare trustee attributed to beneficial owner

3

• (1) Subject to sub-paragraph (2), where a person acquires a chargeable interest or an interest in a partnership as bare trustee, this Part applies as if the interest were vested in, and the acts of the trustee in relation to it were the acts of, the person or persons for whom he is trustee.

• (2) Sub-paragraph (1) does not apply in relation to the grant of a lease.

• (3) Where a lease is granted to a person as bare trustee, he is treated for the purposes of this Part, as it applies in relation to the grant of the lease, as purchaser of the whole of the interest acquired.

• (4) Where a lease is granted by a person as bare trustee, he is to be treated for the purposes of this Part, as it applies in relation to the grant of the lease, as vendor of the whole of the interest disposed of.

Acquisition by trustees of settlement

4

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

Responsibility of trustees of settlement

5

• (1) Where the trustees of a settlement are liable—

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

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

• (c) to a penalty under this Part or to interest on such a penalty,

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

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

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

• (4) The relevant time for this purpose is—

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

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

Relevant trustees for purposes of return etc

6

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

The trustees by whom such a return ... is made are referred to below as “the relevant trustees”.

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

• (3) If the Inland Revenue give notice of an enquiry into the return ...—

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

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

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

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

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

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

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

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

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

• (c) the agreement of all the relevant trustees is required if the appeal is to be settled by agreement,

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

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

Consideration for exercise of power of appointment or discretion

7

Where a chargeable interest is acquired by virtue of—

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

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

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

SCHEDULE 17

General and Special Commissioners: application of general provisions

1

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Prescribed matters to be determined by Commissioners or Lands Tribunal

2

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

General or Special Commissioners: jurisdiction

3

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Proceedings brought out of time

4

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Quorum etc of the Commissioners

5

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Procedure

6

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Consequences of determination by the Commissioners

7

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Costs

8

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Finality of decisions of the Commissioners

9

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Publication of reports of decisions

10

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Supplementary provisions

11

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

SCHEDULE 18

Provisional Collection of Taxes Act 1968

1

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

Inheritance Tax Act 1984

2

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

Income and Corporation Taxes Act 1988

3

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

• (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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

(1G) Where a person is liable to make a payment by way of— (a) any penalty under Part 4 of the Finance Act 2003 (stamp duty land tax), or (b) interest under any provision of that Part, the payment shall not be allowed as a deduction in computing any income, profits or losses for any tax purposes.

.

Finance Act 1989

4

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

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

.

Taxation of Chargeable Gains Act 1992

5

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

Income Tax (Earnings and Pensions) Act 2003

6

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

SCHEDULE 19

Introduction

1

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

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

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

The implementation date

2

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

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

Contract entered into before first relevant date

3

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

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

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

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

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

• (c) if on or after that date there is an assignment, subsale or other transaction (relating to the whole or part of the subject-matter of the contract) as a result of which a person other than the purchaser under the contract becomes entitled to call for a conveyance to him.

Contract substantially performed before implementation date

4

• (1) This paragraph applies where a transaction—

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

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

• (c) is not excluded from being an SDLT transaction by paragraph 3.

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

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

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

Credit for ad valorem stamp duty paid

5

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

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

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

6

• (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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

• (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Earlier related transactions under stamp duty

7

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

• (2) In paragraph 3 of Schedule 9 (relief for transfer of reversion under shared ownership lease where election made for market value treatment) and paragraph 4A of that Schedule (shared ownership lease: treatment of staircasing transaction) as they apply in a case where the original lease was granted before the implementation date—

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

• (b) a reference to an election having been made for tax to be charged in accordance with paragraph 2 or 4 of that Schedule shall be read as a reference to the lease having contained a statement of the parties' intention such as is mentioned in section 97(2)(d) of the Finance Act 1980 or, as the case may be, paragraph (d) of section 108(5) of the Finance Act 1981 (which made provision for stamp duty corresponding to paragraph 4).

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

• (4) For the purposes of paragraph 5 of Schedule 17A (treatment of successive linked leases) no account shall be taken of any transaction that is not an SDLT transaction.

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

8

• (1) This paragraph applies where—

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

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

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

• (2) If in those circumstances the agreement is presented for stamping together with a Revenue certificate as to compliance with the provisions of this Part of this Act in relation to the grant of the lease—

• (a) the payment of stamp duty land tax in respect of the grant of the lease or, as the case may be, the fact that no such tax was payable shall be denoted on the agreement by a particular stamp, and

• (b) the agreement shall be deemed thereupon to be duly stamped.

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

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

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

9

• (1) This paragraph applies where—

• (a) an option binding the grantor to enter into a land transaction, or

• (b) a right of pre-emption preventing the grantor from entering into, or restricting the right of the grantor to enter into, a land transaction,

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

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

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

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

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

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

Supplementary

10

In this Schedule “contract” includes any agreement.

SCHEDULE 20

Part 1 — Supplementary provisions

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

1

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

• (2) In such a case—

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

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

Apportionment of consideration for stamp duty purposes

2

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

• (2) Where—

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

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

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

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

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

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

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

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

• (b) the question whether persons are connected with one another shall be determined in accordance with section 1122 of the Corporation Tax Act 2010.

Part 2 — Consequential amendments and repeals

Removal of unnecessary references to “conveyance”

3

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

Finance Act 1895

4

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

• (a) in paragraph (a) for “property is” substitute “ stock or marketable securities are ”;

• (b) in paragraph (b) for “property” substitute “ stock or marketable securities ”;

• (c) in the closing words for “conveyance”, in both places where that word occurs, substitute “ transfer ”.

Finance Act 1990

5

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

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

.

Finance Act 1999

6

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

Power to make further consequential amendments or repeals

7

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

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

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

SCHEDULE 21

Part 1 — Share incentive plans

Introductory

1

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

Participation in more than one connected plan in a tax year

2

After paragraph 18 insert—

(18A) (1) The plan must provide that, if an individual participates in an award of shares under the plan in a tax year in which he has already participated in an award of shares under one or more other approved SIPs established by the company or a connected company— (a) paragraph 35 (maximum annual award of free shares), (b) paragraph 46 (maximum amount of partnership share money deductions), and (c) paragraph 64 (limit on amount reinvested), apply as if the plan and the other plan or plans were a single plan. (2) In this paragraph “connected company” has the same meaning as in paragraph 18.

.

3

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

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

.

4

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

(b) not participating simultaneously in connected SIPs (see paragraph 18), (ba) successive participation in connected SIPs (see paragraph 18A), and

.

5

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

6

After paragraph 71 insert—

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

.

Partnership shares

7

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

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

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

• (4) After that sub-paragraph insert—

(4A) A limit lower than that specified in sub-paragraph (2) may be framed— (a) as a proposition substituting a percentage lower than that so specified, or (b) as a proposition that a particular description of earnings is not to be regarded as forming part of an employee’s salary for the purposes of that sub-paragraph.

.

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

8

In paragraph 47 (minimum amount of deductions)—

• (a) for “in any month” substitute “ on any occasion ”, and

• (b) omit sub-paragraph (3).

Part 2 — SAYE option schemes

Introductory

9

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

Minor correction

10

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

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

11

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

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

• (3) In sub-paragraph (5)—

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

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

• (4) After that sub-paragraph insert—

(5A) If the scheme makes provision by virtue of sub-paragraph (5), the provision must be either— (a) that the options may be exercised within 6 months after the termination date, or (b) that the options may be exercised within 6 months after the date (if any) when P ceases to hold the employment which (before the termination date) was the scheme-related employment for a reason within sub-paragraph (2)(a) or (b).

.

Alteration of schemes

12

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

• (2) In sub-paragraph (2), after “to be met;” insert—

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

.

• (3) After that sub-paragraph insert—

(2A) For the purposes of sub-paragraph (2)(aa) the Inland Revenue may not withhold their approval unless it appears to them at the time in question that the scheme as proposed to be altered would not then be approved on an application under paragraph 40. (2B) For the purposes of that sub-paragraph a “key feature” of a scheme is a provision of the scheme which is necessary in order to meet the requirements of this Schedule.

.

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

(43) Where the Inland Revenue— (a) have been requested to approve any alteration in a SAYE option scheme that has been approved, and (b) have decided whether or not to approve the alteration, they must give notice of their decision to the scheme organiser.

.

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

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

.

Part 3 — CSOP schemes

Introductory

13

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

Exercise of options: exclusion of income tax liability

14

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

• (2) For subsection (1)(b) substitute—

(b) Condition A or B is met.

.

• (3) For subsections (2) and (3) substitute—

(2) Condition A is that the option is exercised— (a) on or after the third anniversary of the date on which it was granted, but (b) not later than the tenth anniversary of that date. (2A) Condition B is that the option— (a) is exercised before the third anniversary of the date on which it was granted, and (b) is so exercised by virtue of a provision included in the scheme under paragraph 24 of Schedule 4 (exercise of options after ceasing to be director or employee) in circumstances in which subsection (2B) applies. (2B) This subsection applies if the individual exercising the option— (a) has ceased to be a full-time director or qualifying employee of the scheme organiser (or, in the case of a group scheme, a constituent company) because of injury, disability, redundancy or retirement, and (b) exercises the option within 6 months of the day on which he ceases to be such a director or employee. (2C) In subsection (2B)— “redundancy” means redundancy within the meaning of ERA 1996 or ER(NI)O 1996, and “retirement” means retirement on or after reaching a retirement age specified in the scheme.

.

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

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

.

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

15

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

• (2) After paragraph 35 insert—

(35A) A retirement age specified in a CSOP scheme— (a) must be the same for men and women, and (b) must not be less than 55.

.

Meaning of “material interest”

16

• (1) In paragraphs 10(2) and (3), 11(3) and (4) and 13(2) (material interest), for “10%” substitute “ 25% ”.

• (2) This paragraph has effect for the purpose of determining whether a person is eligible to participate in a scheme on the date on which this Act is passed or any later date (by altering what constitutes a material interest on that date and within the 12 months preceding that date).

Alteration of schemes

17

• (1) Paragraph 30 (withdrawal of approval) is amended as follows.

• (2) In sub-paragraph (2), after “to be met;” insert—

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

.

• (3) After that sub-paragraph insert—

(3) For the purposes of sub-paragraph (2)(aa) the Inland Revenue may not withhold their approval unless it appears to them at the time in question that the scheme as proposed to be altered would not then be approved on an application under paragraph 28. (4) For the purposes of that sub-paragraph a “key feature” of a scheme is a provision of the scheme which is necessary in order to meet the requirements of this Schedule.

.

• (4) For paragraph 31 (approval ineffective after unapproved alteration and notice of decisions) and the heading before it substitute—

(31) Where the Inland Revenue— (a) have been requested to approve any alteration in a CSOP scheme that has been approved, and (b) have decided whether or not to approve the alteration, they must give notice of their decision to the scheme organiser.

.

• (5) For paragraph 32(1)(b) (appeal against decision not to approve alteration) substitute—

(b) decide to refuse approval under paragraph 30(2)(aa).

.

PAYE

18

• (1) Section 701(2)(c) (PAYE: exclusions from meaning of “asset”) is amended as follows.

• (2) In sub-paragraph (i), omit “or 4 (approved CSOP schemes)”.

• (3) After that sub-paragraph insert—

(ia) any shares acquired by the employee (whether or not as a result of the exercise of a right to acquire shares) under a scheme approved under Schedule 4 (approved CSOP schemes), other than shares acquired as a result of the exercise of the right before the third anniversary of the date on which it was granted or later than the tenth anniversary of that date;

.

• (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (5) This paragraph has effect in relation to shares acquired on or after 9th April 2003.

SCHEDULE 22

Introductory

1

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

Main provisions

2

• (1) For Chapter 1 of Part 7 (and the heading of that Part) substitute—