S

Land and Buildings Transaction Tax (Scotland) Act 2013

2013 asp 11

The Bill for this Act of the Scottish Parliament was passed by the Parliament on 25th June 2013 and received Royal Assent on 31st July 2013

An Act of the Scottish Parliament to make provision about the taxation of land transactions.

PART 1 SLand and buildings transaction tax

1The taxS

(1)A tax (to be known as land and buildings transaction tax) is to be charged on land transactions.

(2)The tax is chargeable—

(a)whether or not there is an instrument effecting the transaction,

(b)if there is such an instrument, whether or not it is executed in Scotland, and

(c)whether or not any party to the transaction is present, or resident, in Scotland.

(3)The Tax Authority is to be responsible for the collection and management of the tax.

2OverviewS

This Act is arranged as follows—

  • Part 2 makes provision for the key concepts underlying the tax including—

    (a)

    which transactions are land transactions,

    (b)

    which interests are, and which are not, chargeable interests in land,

    (c)

    when a chargeable interest is acquired and the treatment of transactions involving contracts which require to be completed by conveyance as well as other kinds of transaction,

    (d)

    which land transactions are, and which are not, chargeable transactions,

    (e)

    what is, and what is not, chargeable consideration in relation to a chargeable transaction,

  • Part 3 makes provision for—

    (a)

    the amount of tax payable,

    (b)

    relief from the tax, and

    (c)

    who is liable to pay the tax,

  • Part 4 provides for returns relating to land transactions and for the payment of the tax,

  • Part 5 contains provision about the application of the Act in relation to certain types of buyer, including companies, partnerships and trusts,

  • Part 6 contains provision about the application of the Act to leases and non-residential licences,

  • Part 7 contains general provision, including provisions about the Tax Authority and definitions of expressions used in the Act,

  • Part 8 contains provisions on subordinate legislation powers and commencement as well as other final provisions.

PART 2 SKey concepts

CHAPTER 1SLand transactions and chargeable interests

Land transactionS

3Land transactionS

A land transaction is the acquisition of a chargeable interest.

Chargeable interestS

4Chargeable interestS

(1)A chargeable interest is an interest of a kind mentioned in subsection (2) which is not an exempt interest.

(2)The interests are—

(a)a real right or other interest in or over land in Scotland, or

(b)the benefit of an obligation, restriction or condition affecting the value of any such right or interest.

(3)In subsection (2), “land in Scotland” does not include land below mean low water mark.

5Exempt interestS

(1)An interest is exempt if it is a security interest.

(2)In subsection (1) a “security interest” means a real right or other interest in or over land held for the purpose of securing the payment of money or the performance of any other obligation.

(3)See also paragraphs 21 to 24 of schedule 7 (which make additional provision about exempt interests in relation to alternative property finance arrangements).

(4)The Scottish Ministers may, by regulations, modify this section so as to—

(a)provide that a description of a real right or other interest in or over land is an exempt interest,

(b)provide that a description of a real right or other interest in or over land is no longer to be an exempt interest,

(c)vary a description of an exempt interest.

Acquisition and disposal of chargeable interestS

6Acquisition and disposal of chargeable interestS

(1)Each of the following is an acquisition and a disposal of a chargeable interest—

(a)the creation of the interest,

(b)the renunciation or release of the interest,

(c)the variation of the interest (but not the variation of a lease).

(2)The variation of a lease is treated as an acquisition and a disposal of a chargeable interest only where paragraph 29 of schedule 19 (reduction of rent or term or other variation of lease) applies.

(3)A person acquires a chargeable interest where—

(a)the person becomes entitled to the interest on its creation,

(b)the person's interest or right is benefitted or enlarged by the renunciation or release of the interest, or

(c)the person benefits from the variation of the interest.

(4)A person disposes of a chargeable interest where—

(a)the person's interest or right becomes subject to the interest on its creation,

(b)the person ceases to be entitled to the interest on its being renounced or released, or

(c)the person's interest or right is subject to or limited by the variation of the interest.

(5)Except as otherwise provided, this Act applies however the acquisition is effected, whether by act of the parties, by order of a court or other authority, by or under any enactment or by operation of law.

7Buyer and sellerS

(1)The buyer, in relation to a land transaction, is the person who acquires the subject-matter of the transaction.

(2)But a person is treated as the buyer only where that person has given consideration for, or is a party to, the transaction.

(3)The seller, in relation to a land transaction, is the person who disposes of the subject-matter of the transaction.

CHAPTER 2SProvision about particular transactions

General rules for contracts requiring conveyanceS

8Contract and conveyanceS

(1)This section applies where a contract for a land transaction is entered into under which the transaction is to be completed by a conveyance.

(2)A person is not regarded as entering into a land transaction by reason of entering into the contract.

(3)But see sections 9 and 10.

9Completion without substantial performanceS

(1)If the transaction is completed without previously having been substantially performed, the contract and the transaction effected on completion are treated as parts of a single land transaction.

(2)In this case the effective date of the transaction is the date of completion.

10Substantial performance without completionS

(1)If the contract is substantially performed without having been completed, the contract is treated as if it were itself the transaction provided for in the contract.

(2)In this case the effective date of the transaction is when the contract is substantially performed.

(3)Where subsection (1) applies and the contract is subsequently completed by a conveyance—

(a)both the contract and the transaction effected on completion are notifiable transactions, and

(b)tax is chargeable on the latter transaction to the extent (if any) that the amount of tax chargeable on it is greater than the amount of tax chargeable on the contract.

(4)Where subsection (1) applies and the contract is (to any extent) afterwards rescinded or annulled, or is for any other reason not carried into effect, the tax paid by virtue of that subsection is to be (to that extent) repaid by the Tax Authority.

(5)That repayment must be claimed by amendment of the land transaction return made in respect of the contract.

[F1(5A)For the period allowed for amendment of returns, see section 83 of the Revenue Scotland and Tax Powers Act 2014 (asp 16).]

(6)Where paragraph 25 of schedule 19 (leases) applies, it applies in place of this section.

Contract providing for conveyance to third partyS

11Contract providing for conveyance to third partyS

(1)This section applies where a contract is entered into under which a chargeable interest is to be conveyed by one party to the contract (A) at the direction or request of the other (B)—

(a)to a person (C) who is not a party to the contract, or

(b)either to C or to B.

(2)B is not regarded as entering into a land transaction by reason of entering into the contract, but the following provisions have effect.

(3)If the contract is substantially performed, B is treated for the purposes of this Act as acquiring a chargeable interest, and accordingly as entering into a land transaction.

(4)In such a case, the effective date of the transaction is when the contract is substantially performed.

(5)Where the contract is (to any extent) afterwards rescinded or annulled, or is for any other reason not carried into effect, the tax paid by virtue of subsection (3) is to be (to that extent) repaid by the Tax Authority.

(6)Repayment must be claimed by amendment of the land transaction return made in respect of the contract.

[F2(6A)For the period allowed for amendment of returns, see section 83 of the Revenue Scotland and Tax Powers Act 2014 (asp 16).]

(7)Subject to subsection (8), sections 8 to 10 do not apply in relation to the contract.

(8)Where—

(a)this section applies by virtue of subsection (1)(b), and

(b)by reason of B's direction or request, A becomes obliged to convey a chargeable interest to B,

sections 8 to 10 apply to that obligation as they apply to a contract for a land transaction that is to be completed by a conveyance.

(9)Sections 8 to 10 apply in relation to any contract between B and C, in respect of the chargeable interest referred to in subsection (1), that is to be completed by a conveyance.

(10)References to completion in sections 8 to 10, as they apply by virtue of subsection (9), include references to conveyance by A to C of the subject-matter of the contract between B and C.

Options etc.S

12Options and rights of pre-emptionS

(1)The acquisition of—

(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 a land transaction distinct from any land transaction resulting from the exercise of the option or right.

(2)They may be linked transactions (see section 57).

(3)The reference in subsection (1)(a) to an option binding the grantor to enter into a land transaction includes an option requiring the grantor either to enter into a land transaction or to discharge the grantor's obligations under the option in some other way.

(4)The effective date of the transaction in the case of the acquisition of an option or right such as is mentioned in subsection (1) is when the option or right is acquired (as opposed to when it becomes exercisable).

(5)Nothing in this section applies to so much of an option or right of pre-emption as constitutes or forms part of a land transaction apart from this section.

ExchangesS

13ExchangesS

(1)Where a land transaction is entered into by a person as buyer (alone or jointly) wholly or partly in consideration of another land transaction being entered into by that person (alone or jointly) as seller, this Act applies in relation to each transaction as if each were distinct and separate from the other (and they are not linked transactions within the meaning of section 57).

(2)A transaction is treated for the purposes of this Act as entered into by a person as buyer wholly or partly in consideration of another land transaction being entered into by that person as seller in any case where an obligation to give consideration for a land transaction that a person enters into as buyer is met wholly or partly by way of that person entering into another transaction as seller.

(3)As to the amount of the chargeable consideration in the case of exchanges and similar transactions, see—

(a)paragraphs 5 and 6 of schedule 2,

(b)paragraph 17 of that schedule.

InterpretationS

14Meaning of “substantial performance”S

(1)A contract is substantially performed when—

(a)the buyer, or a person connected with the buyer, takes possession of the whole, or substantially the whole, of the subject-matter of the contract,

(b)a substantial amount of the consideration is paid or provided, or

(c)there is an assignation, 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 original buyer becomes entitled to call for a conveyance to that person.

(2)For the purpose of subsection (1)(a)—

(a)possession includes receipt of rent or the right to receive it, and

(b)it is immaterial whether possession is taken under the contract or under a licence.

(3)For the purposes of subsection (1)(b), a substantial amount of the consideration is paid or provided—

(a)if none of the consideration is rent, where the whole or substantially the whole of the consideration is paid or provided,

(b)if the only consideration is rent, when the first payment of rent is made,

(c)if the consideration includes both rent and other consideration, when—

(i)the whole or substantially the whole of the consideration other than rent is paid or provided, or

(ii)the first payment of rent is made.

(4)For the purposes of subsection (1)(c) the reference to an assignation, subsale or other transaction includes the grant or assignation of an option.

CHAPTER 3SChargeable transactions and chargeable consideration

Chargeable transactionS

15Chargeable transactionS

A land transaction is a chargeable transaction unless it is—

(a)an exempt transaction, or

(b)otherwise exempt from charge.

16Exempt transactionS

A transaction is exempt if schedule 1 provides that it is so exempt.

Chargeable considerationS

17Chargeable considerationS

(1)Schedule 2 makes provision as to the chargeable consideration for a transaction.

(2)The Scottish Ministers may, by regulations, modify this Act relating to chargeable consideration and make such other provision as they consider appropriate about—

(a)what is to be treated as chargeable consideration,

(b)the determination of the amount or value of chargeable consideration.

Contingent, uncertain or unascertained considerationS

18Contingent considerationS

(1)Subsection (2) applies where the whole or part of the chargeable consideration for a transaction is contingent.

(2)The amount or value of the consideration is to be determined on the assumption that the outcome of the contingency will be such that the consideration is payable or, as the case may be, does not cease to be payable.

(3)In this Act, “contingent”, in relation to consideration, means—

(a)that it is to be paid or provided only if some uncertain future event occurs, or

(b)that it is to cease to be paid or provided if some uncertain future event occurs.

19Uncertain or unascertained considerationS

(1)Subsection (2) applies where the whole or part of the chargeable consideration for a transaction is uncertain or unascertained.

(2)The amount or value of the consideration is to be determined on the basis of a reasonable estimate.

(3)In this section, “uncertain”, in relation to consideration, means its amount or value depends on uncertain future events.

20Contingent, uncertain or unascertained consideration: further provisionS

Sections 18 and 19 have effect subject to—

(a)section 31 (return where contingency ceases or consideration ascertained),

(b)section 32 (contingency ceases or consideration is ascertained: less tax payable), and

(c)section 41 (application to defer payment in case of contingent or uncertain consideration).

Annuities etc.S

21Annuities etc.: chargeable consideration limited to 12 years' paymentsS

(1)This section applies to so much of the chargeable consideration for a land transaction as consists of an annuity payable—

(a)for life,

(b)in perpetuity,

(c)for an indefinite period, or

(d)for a definite period exceeding 12 years.

(2)The consideration to be taken into account is limited to 12 years' annual payments.

(3)Where the amount payable varies, or may vary, from year to year, the 12 highest annual payments are to be taken into account.

(4)No account is to be taken of any provision for adjustment of the amount payable in line with the retail prices index, the consumer prices index or any other similar index.

(5)References in this section to annual payments are to payments in respect of each successive period of 12 months beginning with the effective date of the transaction.

(6)For the purposes of this section the amount or value of any payment is to be determined (if necessary) in accordance with section 18 (contingent consideration) or 19 (uncertain or unascertained consideration).

(7)References in this section to an annuity include any consideration (other than rent) that falls to be paid or provided periodically.

(8)References to payment are to be read accordingly.

(9)Where this section applies—

(a)sections 31 and 32 (adjustment where contingency ceases or consideration is ascertained) do not apply, and

(b)no application may be made under section 41 (application to defer payment in case of contingent or uncertain consideration).

Deemed market valueS

22Deemed market value where transaction involves connected companyS

(1)This section applies where the buyer is a company and—

(a)the seller is connected with the buyer, or

(b)some or all of the consideration for the transaction consists of the issue or transfer of shares in a company with which the seller is connected.

(2)The chargeable consideration for the transaction is to be taken to be not less than—

(a)the market value of the subject-matter of the transaction as at the effective date of the transaction, and

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

(3)In this section—

  • company” means a body corporate,

  • shares” includes stock and the reference to shares in a company includes reference to securities issued by a company.

(4)Where this section applies, paragraph 1 of schedule 1 (exemption of transactions for which there is no chargeable consideration) does not apply.

(5)But this section has effect subject to any other provision affording exemption or relief from the tax.

(6)This section is subject to the exceptions provided for in section 23.

23Exceptions from deemed market valueS

(1)Section 22 does not apply in the following cases.

(2)In the following provisions “the company” means the company that is the buyer in relation to the transaction in question.

(3)Case 1 is where immediately after the transaction the company holds the property as trustee in the course of a business carried on by it that consists of or includes the management of trusts.

(4)Case 2 is where—

(a)immediately after the transaction the company holds the property as trustee, and

(b)the seller is connected with the company only because of section 1122(6) of the Corporation Tax Act 2010 (c.4).

(5)Case 3 is where—

(a)the seller is a company and the transaction is, or is part of, a distribution of the assets of that company (whether or not in connection with its winding up), and

(b)it is not the case that—

(i)the subject-matter of the transaction, or

(ii)an interest from which that interest is derived,

has, within the period of 3 years immediately preceding the effective date of the transaction, been the subject of a transaction in respect of which group relief was claimed by the seller.

PART 3 SCalculation of tax and reliefs

Amount of tax chargeableS

24Tax rates and tax bandsS

(1)The Scottish Ministers must, by order, specify the tax bands and the percentage tax rates for each band—

(a)for residential property transactions, and

(b)for non-residential property transactions.

(2)An order under subsection (1) must specify, in the case of each type of transaction—

(a)a nil rate tax band and at least two other tax bands,

(b)the tax rate for the nil rate tax band, which must be 0%, and

(c)the tax rate for each tax band above the nil rate tax band so that the rate for each band is higher than the rate for the band below it.

(3)A transaction is a residential property transaction if—

(a)the main subject-matter of the transaction consists entirely of an interest in land that is residential property, or

(b)where the transaction is one of a number of linked transactions, the main subject-matter of each transaction consists entirely of such an interest.

(4)A transaction is a non-residential property transaction if—

(a)the main subject-matter of the transaction consists of or includes an interest in land that is not residential property, or

(b)where the transaction is one of a number of linked transactions, the main subject-matter of any transaction consists of or includes such an interest.

(5)In the case of a transaction for which the whole or part of the chargeable consideration is rent, see paragraph 3 of schedule 19 (leases) for the tax rates and tax bands applicable to such consideration.

25Amount of tax chargeableS

(1)The amount of tax chargeable in respect of a chargeable transaction is to be determined as follows.

  • Step 1 For each tax band applicable to the type of transaction, multiply so much of the chargeable consideration for the transaction as falls within the band by the tax rate for that band.

  • Step 2 Calculate the sum of the amounts reached under Step 1. The result is the amount of tax chargeable.

(2)In the case of a transaction for which the whole or part of the chargeable consideration is rent this section has effect subject to schedule 19 (leases).

(3)This section is subject to—

[F3(za) schedule 2A (additional amount: transactions relating to second homes etc. ), ]

[F4(zb)schedule 4A (first-time buyer relief),]

(a)schedule 5 (multiple dwellings relief),

(b)schedule 9 (crofting community right to buy relief),

[F5(ba)schedule 10A (sub-sale development relief),]

(c)Part 3 of schedule 11 (acquisition relief).

26Amount of tax chargeable: linked transactionsS

(1)Where a chargeable transaction is one of a number of linked transactions, the amount of tax chargeable in respect of the transaction is to be determined as follows.

  • Step 1 For each tax band applicable to the type of transaction, multiply so much of the relevant consideration as falls within the band by the tax rate for that band.

  • Step 2 Calculate the sum of the amounts reached under Step 1. The result is the total tax chargeable.

  • Step 3 Divide the chargeable consideration for the transaction by the relevant consideration.

  • Step 4 Multiply the total tax chargeable by the fraction reached under Step 3. The result is the amount of tax chargeable.

(2)The relevant consideration is the total of the chargeable consideration for all the linked transactions.

(3)In the case of a transaction for which the whole or part of the chargeable consideration is rent this section has effect subject to schedule 19 (leases).

(4)This section is subject to—

[F6(za) schedule 2A (additional amount: transactions relating to second homes etc. ), ]

(a)schedule 5 (multiple dwellings relief),

(b)schedule 9 (crofting community right to buy relief),

(c)Part 3 of schedule 11 (acquisition relief).

Annotations:

Amendments (Textual)

Commencement Information

I26S. 26 in force at 1.4.2015 by S.S.I. 2015/108, art. 2

[F726AAdditional amount: transactions relating to second homes etc.S

Schedule 2A makes provision about an additional amount of tax chargeable in respect of certain chargeable transactions.]

Annotations:

Amendments (Textual)

ReliefsS

27ReliefsS

(1)The following schedules provide for reliefs from the tax in relation to certain land transactions—

  • schedule 3 (sale and leaseback relief),

  • schedule 4 (relief for certain acquisitions of residential property),

  • [F8schedule 4A (first-time buyer relief),]

  • schedule 5 (multiple dwellings relief),

  • schedule 6 (relief for certain acquisitions by registered social landlords),

  • schedule 7 (alternative property finance relief),

  • schedule 8 (relief for alternative finance investment bonds),

  • schedule 9 (crofting community right to buy relief),

  • schedule 10 (group relief),

  • [F9schedule 10A (sub-sale development relief),]

  • schedule 11 (reconstruction relief and acquisition relief),

  • schedule 12 (relief for incorporation of limited liability partnership),

  • schedule 13 (charities relief),

  • [F10schedule 13A (friendly societies relief),

  • schedule 13B (building societies relief),]

  • schedule 14 (relief for certain compulsory purchases),

  • schedule 15 (relief for compliance with planning obligations),

  • schedule 16 (public bodies relief).

  • [F11schedule 16A (visiting forces and international military headquarters reliefs),

  • schedule 16B (relief for property accepted in satisfaction of tax),

  • schedule 16C (lighthouses relief).]

(2)Any relief under any of those schedules must be claimed in the first return made in relation to the transaction or in an amendment of that return.

[F12(2A)For the period allowed for amendment of returns, see section 83 of the Revenue Scotland and Tax Powers Act 2014 (asp 16).]

(3)The Scottish Ministers may, by order, modify this Act so as to—

(a)add a relief,

(b)modify an existing relief, or

(c)remove a relief.

(4)An order under subsection (3) may also modify any other enactment that the Scottish Ministers consider appropriate.

Liability for taxS

28Liability for taxS

(1)The buyer is liable to pay the tax in respect of a chargeable transaction.

(2)As to the liability of buyers acting jointly, see—

(a)section 48(2)(c) (joint buyers),

(b)paragraph 3 of schedule 17 (partnerships), and

(c)paragraphs 15 to 18 of schedule 18 (trusts).

PART 4 SReturns and payment

CHAPTER 1SReturns

Duty to make returnS

29Duty to make returnS

(1)The buyer in a notifiable transaction must make a return to the Tax Authority.

(2)If the transaction is a chargeable transaction, the return must include an assessment of the tax that, on the basis of the information contained in the return, is chargeable in respect of the transaction.

(3)The return must be made before the end of the period of 30 days beginning with the day after the effective date of the transaction.

Notifiable transactionsS

30Notifiable transactionsS

(1)A land transaction is notifiable unless it is—

(a)an exempt transaction,

(b)an acquisition of the ownership of land where the chargeable consideration for the acquisition is less than £40,000,

(c)an acquisition of a chargeable interest other than a major interest in land where the chargeable consideration does not exceed the nil rate tax band applicable to the transaction, or

(d)an acquisition specified in subsection (2).

(2)The following transactions in relation to leases are also not notifiable—

(a)the grant of a lease for a period of 7 years or more where—

(i)any chargeable consideration other than rent is less than £40,000, and

(ii)the relevant rent is less than £1,000,

(b)the assignation or renunciation of a lease where—

(i)the lease was originally granted for a period of 7 years or more, and

(ii)the chargeable consideration for the assignation or renunciation is less than £40,000,

(c)the grant of a lease for a period of less than 7 years where the chargeable consideration does not exceed the nil rate tax band applicable to the transaction, and

(d)the assignation or renunciation of a lease where—

(i)the lease was originally granted for a period of less than 7 years, and

(ii)the chargeable consideration for the assignation or renunciation does not exceed the nil rate tax band applicable to the transaction.

(3)In subsections (1) and (2), “chargeable consideration”—

(a)where the transaction is one of a number of linked transactions, means the total of the chargeable consideration for all the linked transactions,

(b)includes any amount in respect of which tax would be chargeable but for a relief.

(4)In subsection (2)(a)(ii), “relevant rent” means—

(a)the annual rent (as defined in paragraph 9(7) of schedule 19), or

(b)in the case of the grant of a lease to which paragraph 29 of schedule 17 applies, the relevant chargeable proportion of the annual rent (as calculated in accordance with that paragraph).

(5)The exceptions in subsections (1)(a) to (d) and (2) do not apply where the transaction is a transaction that a person is treated as entering into by virtue of section 11(3).

(6)This section has effect subject to—

(a)section 10(3) (substantial performance without completion),

(b)paragraph 17(6) of schedule 2 (arrangements involving public or educational bodies),

(c)paragraph 12 of schedule 7 (alternative property finance), and

(d)paragraph 41 of schedule 17 (transfer of partnership interests).

(7)The Scottish Ministers may, by order, amend subsection (1)(b), (2)(a)(i) or (b)(ii) so as to substitute, for the figure for the time being specified there, a different figure.

Adjustments and further returnsS

31Return where contingency ceases or consideration ascertainedS

(1)The buyer in a land transaction must make a return to the Tax Authority if—

(a)section 18(2) or 19(2) (contingent, uncertain or unascertained consideration) applies in relation to the transaction (or to any transaction in relation to which it is a linked transaction),

(b)an event mentioned in subsection (2) occurs, and

(c)the effect of the event is that—

(i)the transaction becomes notifiable,

(ii)additional tax is payable in respect of the transaction, or

(iii)tax is payable where none was payable before.

(2)The events are—

(a)in the case of contingent consideration, the contingency occurs or it becomes clear that it will not occur, or

(b)in the case of uncertain or unascertained consideration, an amount relevant to the calculation of the consideration, or any instalment of consideration, becomes ascertained.

(3)The return must be made before the end of the period of 30 days beginning with the day after the date on which the event occurred.

(4)The return must include an assessment of the tax that, on the basis of the information contained in the return, is chargeable in respect of the transaction.

(5)The tax so chargeable is to be calculated by reference to the tax rates and tax bands in force at the effective date of the transaction.

(6)This section does not apply so far as the consideration consists of rent (see schedule 19 (leases)) unless the effect of the event mentioned in subsection (2) is that the transaction becomes notifiable.

32Contingency ceases or consideration ascertained: less tax payableS

(1)The buyer in a land transaction may take one of the steps mentioned in subsection (2) to obtain a repayment of tax if—

(a)section 18(2) or 19(2) (contingent, uncertain and unascertained consideration) applies in relation to the transaction (or to any transaction in relation to which it is a linked transaction),

(b)an event mentioned in section 31(2) occurs, and

(c)the effect of the event is that less tax is payable in respect of the transaction than has already been paid.

(2)The steps are—

(a)within the period allowed for amendment of the land transaction return, amend the return accordingly,

(b)after the end of that period (if the land transaction return is not so amended), make a claim to the Tax Authority [F13under section 107 of the Revenue Scotland and Tax Powers Act 2014 (asp 16)] for repayment of the amount overpaid.

[F14(2A)For the period allowed for amendment of returns, see section 83 of the Revenue Scotland and Tax Powers Act 2014 (asp 16).]

(3)This section does not apply so far as the consideration consists of rent (see schedule 19 (leases)).

33Further return where relief withdrawnS

(1)The buyer in a land transaction must make a further return to the Tax Authority if relief is withdrawn to any extent under—

(a)Part 5 of schedule 4 (relief for certain acquisitions of residential property),

(b)Part 5 of schedule 5 (transfer of multiple dwellings),

(c)Part 4 of schedule 8 (relief for alternative finance investment bonds),

(d)Part 3 of schedule 10 (group relief),

[F15(da)Part 3 of schedule 10A (sub-sale development relief),]

(e)Part 4 of schedule 11 (reconstruction relief and acquisition relief), or

(f)paragraph 4 of schedule 13 (charities relief).

(2)The return must include an assessment of the amount of tax that, on the basis of the information contained in the return, is chargeable.

(3)The return must be made before the end of the period of 30 days beginning with the day after the date on which the relevant event occurred.

(4)The relevant event is—

(a)in relation to the withdrawal of relief under schedule 4, an event mentioned in paragraph 14(a), (b) or (c) or 16(a), (b) or (c) of that schedule,

(b)in relation to the withdrawal of relief under schedule 5, an event mentioned in paragraph 16(a) or 18(a) of that schedule,

(c)in relation to the withdrawal of relief under schedule 8, an event mentioned in paragraph 16 of that schedule,

(d)in relation to the withdrawal of group relief, the buyer ceasing to be a member of the same group as the seller within the meaning of schedule 10,

[F16(da)in relation to the withdrawal of sub-sale development relief, the end of the relevant period within the meaning of paragraph 4(3) of schedule 10A,]

(e)in relation to the withdrawal of reconstruction relief or acquisition relief, the change of control of the acquiring company mentioned in paragraph 13 of schedule 11,

(f)in relation to the withdrawal of charities relief, a disqualifying event as defined in paragraphs 5 and 6 of schedule 13.

34Return or further return in consequence of later linked transactionS

(1)This section applies where the effect of a transaction (“the later transaction”) that is linked to an earlier transaction is that—

(a)the earlier transaction becomes notifiable,

(b)additional tax is payable in respect of the earlier transaction, or

(c)tax is payable in respect of the earlier transaction where none was payable before.

(2)The buyer in the earlier transaction must make a return (or further return) in respect of that transaction.

(3)The return must be made before the end of the period of 30 days beginning with the day after the effective date of the later transaction.

(4)The return must include an assessment of the amount of tax that, on the basis of the information contained in the return, is chargeable as a result of the later transaction.

(5)The tax so chargeable is to be calculated by reference to the tax rates and tax bands in force at the effective date of the earlier transaction.

(6)This section does not affect any requirement to make a land transaction return in respect of the later transaction.

Returns: form and content etc.S

35Form and contentS

(1)A return under this Act must—

(a)be in the form specified by the Tax Authority, F17...

(b)contain the information specified by the Tax Authority.

[F18(c)be made in such manner as specified by the Tax Authority.]

(2)The Tax Authority may specify different forms and information for—

(a)different kinds of return, and

(b)different kinds of transaction.

(3)The return is treated as containing any information provided by the buyer for the purpose of completing the return.

36DeclarationS

(1)A return under this Act must also include a declaration by the buyer that the return is, to the best of the buyer's knowledge, correct and complete.

(2)However, where the buyer authorises an agent to complete the return—

(a)the agent must certify in the return that the buyer has declared that the information provided in the return, with the exception of the relevant date, is to the best of the buyer's knowledge, correct and complete, and

(b)the return must include a declaration by the agent that the relevant date provided in the return is, to the best of the agent's knowledge, correct.

(3)The relevant date is—

(a)in relation to a return under section 29, the effective date of the transaction,

(b)in relation to a return under section 31, the date of the event as a result of which the return is required,

(c)in relation to a return under section 33, the date on which the relevant event occurred,

(d)in relation to a return under section 34, the effective date of the later transaction,

(e)in relation to a return under paragraph 10 of schedule 19 (leases), the review date (see paragraph 10(7)),

(f)in relation to a return under paragraph 11 of that schedule, the day on which the lease is assigned or terminated,

(g)in relation to a return under paragraph 20 of that schedule, the date on which the 1 year period mentioned in paragraph 20(3) ended,

(h)in relation to a return under paragraph 22 of that schedule, the date on which the deemed fixed term mentioned in paragraph 22(2) ended,

(i)in relation to a return under paragraph 30 of that schedule, the date from which the variation mentioned in that paragraph takes effect.

F1937AmendmentS

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

[F2037ACommunications from taxpayers to the Tax AuthorityS

(1)Any notice, application or other thing that a person is required or permitted by provision made in or under this Act to give to the Tax Authority must comply with the requirements set out in subsection (2).

(2)The requirements are that the thing—

(a)must be in the form specified by the Tax Authority,

(b)must contain the information specified by the Tax Authority, and

(c)must be given in the manner specified by the Tax Authority.

(3)Subsections (1) and (2) are subject to any different provision made in or under this Act.]

MiscellaneousS

38InterpretationS

References in this Act to the making of a return are to the making of a return that—

(a)complies with the requirements of sections 35 and 36, and

(b)contains an assessment of the tax chargeable in respect of the transaction (if one is required).

39Power to amend period in which returns must be madeS

(1)The Scottish Ministers may, by order, amend a provision listed in subsection (2) so as to substitute, for the period for the time being specified there, a different period.

(2)The provisions are—

(a)section 29(3),

(b)section 31(3),

(c)section 33(3),

(d)in schedule 19 (leases)—

(i)paragraph 10(3),

(ii)paragraph 11(3),

(iii)paragraph 20(3)(a),

(iv)paragraph 22(2)(a),

(v)paragraph 30(2)(a).

CHAPTER 2SPayment of tax

40Payment of taxS

(1)Tax payable in respect of a land transaction must be paid to the Tax Authority.

(2)Where a return is to be made under any of the following provisions, the tax or additional tax payable must be paid at the same time as the return is made—

(a)section 29 (land transaction return),

(b)section 31 (return where contingency ceases or consideration ascertained),

(c)section 33 (further return where relief withdrawn),

(d)section 34 (return or further return in consequence of later linked transaction), or

(e)in schedule 19 (leases)—

(i)paragraph 10 (return on 3-yearly review),

(ii)paragraph 11 (return on assignation or termination of lease),

(iii)paragraph 20 (return where lease for fixed term continues after end of term),

(iv)paragraph 22 (return in relation to lease for indefinite term),

(v)paragraph 30 (transactions which become notifiable on variation of rent or term).

(3)Tax payable as a result of the amendment of a return must be paid at the same time as the amendment is made.

(4)For the purposes of subsections (2) and (3), tax is treated as paid if arrangements satisfactory to the Tax Authority are made for payment of the tax.

(5)This section is subject to section 41 (application to defer payment of tax in case of contingent or uncertain consideration).

41Application to defer payment in case of contingent or uncertain considerationS

(1)The buyer may apply to the Tax Authority to defer payment of tax in a case where—

(a)the amount of tax payable depends on the amount or value of chargeable consideration that, at the effective date of the transaction, is contingent or uncertain, and

(b)the chargeable consideration falls to be paid or provided on one or more future dates of which at least one falls, or may fall, more than 6 months after the effective date of the transaction.

F21(2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(3)An application under this section does not affect the buyer's obligations as regards payment of tax in respect of chargeable consideration that—

(a)has already been paid or provided at the time the application is made, or

(b)is not contingent and whose amount is ascertained or ascertainable at the time the application is made.

(4)Subsection (3) applies as regards both the time of payment and the calculation of the amount payable.

(5)Unless the Scottish Ministers provide otherwise by order, this section does not apply to consideration so far as it consists of rent.

42Regulations about applications under section 41S

(1)The Scottish Ministers may, by regulations, make further provision about applications under section 41.

(2)The regulations may in particular—

(a)specify when an application is to be made,

(b)require the buyer to provide such information as the Tax Authority may reasonably require for the purposes of determining whether to accept an application,

(c)specify the grounds on which an application may be refused,

(d)specify the procedure for reaching a decision on the application,

(e)make provision for postponing payment of tax when an application has been made,

(f)provide for the effect of accepting an application,

(g)require the buyer to make a return or further return, and to make such payments or further payments of tax as may be specified, in such circumstances as may be specified.

(3)Regulations under this section may also provide that where the circumstances in subsection (4) arise—

(a)sections 31 and 32 (adjustment where contingency ceases or consideration is ascertained) do not apply in relation to the payment, and

(b)instead, any necessary adjustment is to be made in accordance with the regulations.

(4)The circumstances are—

(a)a payment is made as mentioned in section 41(3), and

(b)an application under this section is accepted in respect of other chargeable consideration taken into account in calculating the amount of that payment.

CHAPTER 3SRegistration of land transactions etc.

43Return to be made and tax paid before application for registrationS

(1)The Keeper of the Registers of Scotland (“the Keeper”) may not accept an application for registration of a document effecting or evidencing a notifiable transaction unless—

(a)a land transaction return has been made in relation to the transaction, and

(b)any tax payable in respect of the transaction has been paid.

(2)The Tax Authority must provide the Keeper with such information as the Keeper reasonably requires to comply with subsection (1).

(3)In this section, “registration” means registration or recording in any register under the management and control of the Keeper.

(4)For the purposes of subsection (1)(b), tax is treated as paid if arrangements satisfactory to the Tax Authority are made for the payment of the tax.

(5)This section is subject to section 41 (application to defer payment of tax in case of contingent or uncertain consideration).

PART 5 SApplication of act to certain persons and bodies

44Companies and other organisationsS

(1)Everything to be done by an organisation under this Act is to be done by the organisation acting through—

(a)the proper officer of the organisation, or

(b)another person having for the time being the express, implied or apparent authority of the organisation to act on its behalf for the purpose.

(2)Subsection (1)(b) does not apply where a liquidator has been appointed for the organisation.

(3)For the purposes of this Act—

(a)the proper officer of a company is the secretary, or person acting as secretary, of the company,

(b)the proper officer of an unincorporated association (or of a company that does not have a proper officer within paragraph (a)) is the treasurer, or person acting as treasurer, of the association or, as the case may be, the company.

(4)But, where a liquidator or administrator has been appointed for the organisation, the liquidator or, as the case may be, the administrator is the proper officer.

(5)If two or more persons are appointed to act jointly or concurrently as the administrator of the organisation, the reference to the administrator in subsection (4) is to—

(a)such one of them as is specified in a notice given to the Tax Authority by those persons for the purposes of this section, or

(b)where the Tax Authority is not so notified, such one or more of those persons as the Tax Authority may designate as the proper officer for those purposes.

(6)In this section, “organisation” means—

(a)a company,

(b)an unincorporated association.

45Unit trust schemesS

(1)This Act (with the exception of the provisions mentioned in subsection (8)) applies in relation to a unit trust scheme as if—

(a)the trustees were a company, and

(b)the rights of the unit holders were shares in the company.

(2)Each of the parts of an umbrella scheme is regarded for the purposes of this Act as a separate unit trust scheme and the umbrella scheme as a whole is not so regarded.

(3)An “umbrella scheme” means a unit trust scheme—

(a)that provides arrangements for separate pooling of the contributions of participants and the profits or income out of which payments are to be made for them, and

(b)under which the participants are entitled to exchange rights in one pool for rights in another.

(4)A “part” of an umbrella scheme means such of the arrangements as relate to a separate pool.

(5)In this Act—

  • unit trust scheme” has the same meaning as in the Financial Services and Markets Act 2000 (c.8), and

  • unit holder” means a participant in a unit trust scheme.

(6)The Scottish Ministers may, by regulations, provide that a scheme of a description specified in the regulations is to be treated as not being a unit trust scheme for the purposes of this Act.

(7)Section 620 of the Corporation Tax Act 2010 (c.4) (court investment funds treated as authorised unit trusts) applies for the purposes of this Act as it applies for the purposes of that Act, with the substitution for references to an authorised unit trust of references to a unit trust scheme.

(8)A unit trust scheme is not to be treated as a company for the purposes of schedules 10 (group relief) and 11 (reconstruction relief and acquisition relief).

46Open-ended investment companiesS

(1)The Scottish Ministers may, by regulations, make such provision as they consider appropriate for securing that the provisions of this Act have effect in relation to—

(a)open-ended investment companies of such description as may be prescribed in the regulations, and

(b)transactions involving such companies,

in a manner corresponding, subject to such modifications as the Scottish Ministers consider appropriate, to the manner in which they have effect in relation to unit trust schemes and transactions involving such trusts.

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

(a)modifying the operation of any provision in relation to open-ended investment companies so as to secure that arrangements for treating the assets of such a company as assets comprised in separate pools are given an effect corresponding to that of equivalent arrangements constituting the separate parts of an umbrella scheme,

(b)treating the separate parts of the undertaking of an open-ended investment company in relation to which such provision is made as distinct companies for the purposes of this Act.

(3)In this section—

  • open-ended investment company” has the meaning given by section 236 of the Financial Services and Markets Act 2000 (c.8),

  • umbrella scheme” has the same meaning as in section 45.

47Residential property holding companiesS

(1)The Scottish Ministers may, by regulations, provide for qualifying transfers of interests in residential property holding companies—

(a)to be treated as land transactions, and

(b)to be chargeable transactions.

(2)A “residential property holding company” means a company—

(a)whose sole or main activity is holding or investing in chargeable interests in residential property,

(b)whose property consists of or includes chargeable interests in residential property, and

(c)whose shares are not listed on a recognised stock exchange.

(3)For the purposes of subsection (2)(a) “chargeable interests” includes any interest which would be a chargeable interest but for the fact that it relates to land outwith Scotland.

(4)A “qualifying transfer” is a transfer of an interest in such a company that results in the transferee acquiring the right to occupy some or all of the company's residential property.

(5)Regulations under subsection (1) may in particular make provision, or further provision, about—

(a)the kinds of interest, transfer of which is a qualifying transfer,

(b)the kinds of transfers which are and are not qualifying transfers,

(c)the rights which are rights to occupy a company's residential property for the purposes of such transfers,

(d)the chargeable consideration in the case of such transfers,

(e)the tax bands and tax rates that are to apply to such transfers (including specifying tax bands and tax rates for such transfers),

(f)the person who is to be liable to pay the tax,

(g)the application or disapplication of any reliefs in relation to such transfers.

(6)Regulations under subsection (1) may also provide that, for the purposes of this section, “residential property” includes such other kinds of property as may be specified in the regulations.

(7)Regulations under subsection (1) may modify any enactment (including this Act).

48Joint buyersS

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

(2)The general rules are that—

(a)any obligation of the buyer under this Act in relation to the transaction is an obligation of the buyers jointly but may be discharged by any of them,

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

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

(3)The general rules are subject to the following provisions—

(a)if a return is required in relation to the transaction, a single return must be made,

(b)the declaration required by section 36(1) or (2)(a) (declaration that return is complete and correct) must be made by all the buyers.

[F22(3A)See also section 247 of the Revenue Scotland and Tax Powers Act 2014 (asp 16) (reviews, appeals etc. where joint buyers).]

(4)This section has effect subject to—

(a)the provisions of schedule 17 (partnerships), and

(b)paragraphs 15 to 18 of schedule 18 (trusts).

49PartnershipsS

(1)Schedule 17 makes provision about the application of this Act in relation to partnerships.

(2)The Scottish Ministers may, by regulations, modify schedule 17.

50TrustsS

(1)Schedule 18 makes provision about the application of this Act in relation to trusts.

(2)The Scottish Ministers may, by regulations, modify schedule 18.

[F23(3)See also section 248 of the Revenue Scotland and Tax Powers Act 2014 (asp 16) (reviews, appeals etc.: trustees).]

Annotations:

Amendments (Textual)

Commencement Information

I52S. 50 in force at 1.4.2015 by S.S.I. 2015/108, art. 2

51Persons acting in a representative capacity etc.S

(1)The personal representatives of a person who is the buyer in a land transaction—

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

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

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

PART 6 SApplication of Act to leases and licences

LeasesS

52Application of this Act to leasesS

(1)Schedule 19 makes provision about the application of this Act to chargeable transactions involving leases, including provision for the calculation of the tax chargeable in relation to such transactions.

(2)The Scottish Ministers may, by regulations, modify schedule 19.

Annotations:

Commencement Information

I54S. 52(1) in force at 7.11.2014 for specified purposes by S.S.I. 2014/279, art. 2, Sch.

I55S. 52(1) in force at 1.4.2015 in so far as not already in force by S.S.I. 2015/108, art. 2

I56S. 52(2) in force at 1.4.2015 by S.S.I. 2015/108, art. 2

LicencesS

53Application of this Act to licencesS

(1)The Scottish Ministers may, by regulations, prescribe descriptions of non-residential licences to occupy property, transactions in relation to which are to be land transactions for the purposes of this Act.

(2)The regulations may also make provision, among other things—

(a)for transactions, which result in the acquisition of interests in licences, to be land transactions,

(b)for what the chargeable consideration is to be in relation to a licence,

(c)for the determination of the amount or value of that chargeable consideration,

(d)for the calculation of the tax chargeable,

(e)specifying that certain land transactions relating to a licence are not to be notifiable under section 30.

(3)Regulations under this section may modify any enactment (including this Act).

PART 7 SGeneral and interpretation

The Tax AuthorityS

54The Tax AuthorityS

(1)For the purposes of this Act, the Tax Authority is [F24Revenue Scotland ].

F25(2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Annotations:

Amendments (Textual)

F2655Delegation of functions to KeeperS

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

F2756Review and appealS

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

Linked transactionsS

57Linked transactionsS

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

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

(3)Where two or more buyers make a single return in respect of linked transactions, section 48 applies as if—

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

(b)those buyers were buyers acting jointly.

(4)This section is subject to section 13(1) (exchanges).

Connected personsS

58Connected personsS

Section 1122 of the Corporation Tax Act 2010 (c.4) (connected persons) has effect for the purposes of the following provisions—

(a)section 14,

(b)section 22,

(c)section 23,

(d)section 57,

(e)paragraphs 1, 11 and 13 of schedule 2,

(f)schedule 4,

(g)Part 5 of schedule 5,

(h)schedule 8,

[F28(ha)paragraph 17 of schedule 10A,]

(i)schedule 17 (but see paragraph 49),

(j)paragraph 17 of schedule 19.

InterpretationS

59Meaning of “residential property”S

(1)In this Act “residential property” means—

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

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

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

(2)Accordingly, “non-residential property” means any property that is not residential property.

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

(a)residential accommodation for school pupils,

(b)residential accommodation for students, other than accommodation falling within subsection (4)(b),

(c)residential accommodation for members of the armed forces,

(d)an institution that is the sole or main residence of at least 90% of its residents and does not fall within any of paragraphs (a) to (f) of subsection (4).

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

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

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

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

(d)a hospital or hospice,

(e)a prison or similar establishment,

(f)a hotel or inn or similar establishment.

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

(6)Where a building that is not in use is suitable for use for at least one of the purposes specified in subsection (3) and at least one of those specified in subsection (4)—

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

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

(7)In this section “building” includes part of a building.

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

(9)The Scottish Ministers may, by order—

(a)amend subsections (3) and (4) so as to change or clarify the cases where use of a building is, or is not to be, use of a building as a dwelling for the purposes of subsection (1),

(b)amend or repeal subsection (8).

Annotations:

Commencement Information

I60S. 59 in force at 7.11.2014 for specified purposes by S.S.I. 2014/279, art. 2, Sch.

I61S. 59 in force at 1.4.2015 in so far as not already in force by S.S.I. 2015/108, art. 2

60Meaning of “major interest” in landS

References in this Act to a “major interest” in land are to—

(a)ownership of land, or

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

61Meaning of “subject-matter” and “main subject-matter”S

References in this Act to the subject-matter of a land transaction or a contract are to the chargeable interest acquired (the “main subject-matter”) by virtue of the transaction or contract, together with any interest or right pertaining to it that is acquired with it.

62Meaning of “market value”S

For the purpose of this Act “market value” is to be determined as for the purposes of the Taxation of Chargeable Gains Act 1992 (c.12) (see sections 272 to 274 of that Act).

63Meaning of “effective date” of a transactionS

(1)Except as otherwise provided, the effective date of a land transaction for the purposes of this Act is—

(a)the date of completion, or

(b)such alternative date as the Scottish Ministers may prescribe by regulations.

(2)Other provision as to the effective date of certain land transactions is made by—

(a)section 10(2) (substantial performance of contract without [F29completion]),

(b)section 11(4) (substantial performance of contract requiring conveyance to third party),

(c)section 12(4) (options and rights of pre-emption), and

(d)paragraph 25(2) of schedule 19 (agreement for lease substantially performed etc.).

64Meaning of “completion”S

(1)In this Act, “completion” means—

(a)in relation to a lease, when it is executed by the parties or constituted by any means,

(b)in relation to any other transaction, the settlement of the transaction.

(2)References to completion are to completion of the land transaction proposed, between the same parties, in substantial conformity with the contract.

65General interpretationS

In this Act—

66Index of defined expressionsS

Schedule 20 contains an index of expressions defined or otherwise explained in this Act.

PART 8 SFinal provisions

Ancillary provisionS

67Ancillary provisionS

(1)The Scottish Ministers may, by order, make such incidental, supplementary, consequential, transitory, transitional or saving provision as they consider appropriate for the purposes of, in consequence of, or for giving full effect to, any provision made by or under this Act.

(2)An order under subsection (1) may modify any enactment (including this Act).

Subordinate legislationS

68Subordinate legislationS

(1)Any power conferred by this Act on the Scottish Ministers to make an order or regulations includes the power to make—

(a)different provision for different cases or descriptions of case or for different purposes,

(b)such incidental, supplementary, consequential, transitional, transitory or saving provision as the Scottish Ministers consider necessary or expedient.

(2)Orders and regulations under the following provisions are subject to the affirmative procedure—

(a)section 5(4),

(b)section 24(1) (but only the first order),

(c)section 27(3),

(d)section 49(2),

(e)section 50(2),

(f)section 52(2),

(g)section 53(1),

F32(h). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(i)section 59(9),

(j)paragraph 8 of schedule 1,

[F33(ja)paragraph 19(3) or (4) of schedule 2A,]

(k)paragraph 3 of schedule 19 (but only the first order),

(l)paragraph 7(1) of that schedule.

(3)Orders and regulations under the following provisions which add to, replace or omit the text of any Act (including this Act) are also subject to the affirmative procedure—

(a)section 17(2),

(b)section 47(1),

F34(c). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(d)section 67(1).

(4)An order mentioned in subsection (5)—

(a)must be laid before the Scottish Parliament, and

(b)ceases to have effect on the expiry of the period of 28 days beginning with the date on which it is made unless, before the expiry of that period, it is approved by resolution of the Parliament.

[F35(5)The order is an order under—

(a)section 24(1),

(b)paragraph 19(1) or (2) of schedule 2A, or

(c)paragraph 3 of schedule 19.]

(6)In reckoning any period of 28 days for the purposes of subsection (4)(b), no account is to be taken of any period during which the Scottish Parliament is—

(a)dissolved, or

(b)in recess for more than 4 days.

[F36(6A)Subsection (4)(b) is without prejudice to—

(a)anything previously done by reference to an order mentioned in subsection (5), or

(b)the making of a new order.]

(7)All other orders and regulations under this Act are subject to the negative procedure.

(8)This section does not apply to an order under section 70(2).

Crown applicationS

69Crown applicationS

Nothing in this Act affects Her Majesty in Her private capacity.

Commencement and short titleS

70CommencementS

(1)This section and sections 54,F37... 67, 68, 69 and 71 come into force on the day of Royal Assent.

(2)The other provisions of this Act come into force on such day as the Scottish Ministers may, by order, appoint.

(3)An order under subsection (2) may contain such transitional, transitory or saving provision as the Scottish Ministers consider necessary or expedient.

71Short titleS

The short title of this Act is the Land and Buildings Transaction Tax (Scotland) Act 2013.

SCHEDULE 1SExempt transactions

(introduced by section 16)

No chargeable considerationS

1A land transaction is an exempt transaction if there is no chargeable consideration for the transaction.

Acquisitions by the CrownS

2A land transaction under which the buyer is any of the following is an exempt transaction—

(a)the Scottish Ministers,

(b)the Scottish Parliamentary Corporate Body,

(c)a Minister of the Crown,

(d)the Corporate Officer of the House of Lords,

(e)the Corporate Officer of the House of Commons,

(f)a Northern Ireland department,

(g)the Northern Ireland Assembly Commission,

(h)the Welsh Ministers, the First Minister for Wales and the Counsel General to the Welsh Assembly Government,

(i)the National Assembly for Wales Commission,

(j)the National Assembly for Wales.

Residential leases and licencesS

3(1)The grant, assignation or renunciation of—S

(a)a lease of residential property (which is not a qualifying lease), or

(b)a licence to occupy property (which is not a prescribed non-residential licence),

is an exempt transaction.

(2)For the purposes of sub-paragraph (1)(a), a transaction in respect of a lease of residential property is exempt only if—

(a)the main subject-matter of the transaction consists entirely of an interest in land that is residential property, or

(b)where the transaction is one of a number of linked transactions, the main subject-matter of each transaction consists entirely of such an interest.

(3)In sub-paragraph (1)(a), “qualifying lease” has the same meaning as in the Long Leases (Scotland) Act 2012 (asp 9).

(4)In sub-paragraph (1)(b), “prescribed non-residential licence” means a licence of a description prescribed by the Scottish Ministers in regulations under section 53(1).

Transactions in connection with divorce etc.S

4A transaction between one party to a marriage and the other is an exempt transaction if it is effected—

(a)in pursuance of an order of a court made on granting, in respect of the parties, a decree of divorce, nullity of marriage or judicial separation,

(b)in pursuance of an order of a court made in connection with the dissolution or annulment of the marriage, or the parties' judicial separation, at any time after the granting of such a decree,

(c)in pursuance of—

(i)an order of a court made at any time under section 22A, 23A or 24A of the Matrimonial Causes Act 1973 (c.18), or

(ii)an incidental order of a court made under section 8(2) of the Family Law (Scotland) Act 1985 (c.37) by virtue of section 14(1) of that Act,

(d)at any time in pursuance of an agreement of the parties made in contemplation or otherwise in connection with the dissolution or annulment of the marriage, their judicial separation or the making of a separation order in respect of them.

Transactions in connection with dissolution of civil partnership etc.S

5A transaction between one party to a civil partnership and the other is an exempt transaction if it is effected—

(a)in pursuance of an order of a court made on granting, in respect of the parties, an order or decree for the dissolution or annulment of the civil partnership or their judicial separation,

(b)in pursuance of an order of a court made in connection with the dissolution or annulment of the civil partnership, or the parties' judicial separation, at any time after the granting of such an order or decree for dissolution, annulment or judicial separation as mentioned in paragraph (a),

(c)in pursuance of—

(i)an order of a court made at any time under any provision of schedule 5 to the Civil Partnership Act 2004 (c.33) that corresponds to section 22A, 23A or 24A of the Matrimonial Causes Act 1973 (c.18), or

(ii)an incidental order of a court made under any provision of the Civil Partnership Act 2004 (c.33) that corresponds to section 8(2) of the Family Law (Scotland) Act 1985 (c.37) by virtue of section 14(1) of that Act of 1985,

(d)at any time in pursuance of an agreement of the parties made in contemplation or otherwise in connection with the dissolution or annulment of the civil partnership, their judicial separation or the making of a separation order in respect of them.

Assents and appropriations by personal representativesS

6(1)The acquisition of property by a person in or towards satisfaction of the person's entitlement under or in relation to the will of a deceased person, or on the intestacy of a deceased person, is an exempt transaction.S

(2)Sub-paragraph (1) does not apply if the person acquiring the property gives any consideration for it, other than the assumption of secured debt.

(3)Where sub-paragraph (1) does not apply because of sub-paragraph (2), the chargeable consideration for the transaction is determined in accordance with paragraph 9(1) of schedule 2.

(4)In this paragraph—

  • debt” means an obligation, whether certain or contingent, to pay a sum of money either immediately or at a future date, and

  • secured debt” means debt that, immediately after the death of the deceased person, is secured on the property.

Variation of testamentary dispositions etc.S

7(1)A transaction following a person's death that varies a disposition (whether effected by will, under the law relating to intestacy or otherwise) of property of which the deceased was competent to dispose is an exempt transaction if the following conditions are met.S

(2)The conditions are—

(a)that the transaction is carried out within the period of 2 years after a person's death, and

(b)that no consideration in money or money's worth other than the making of a variation of another such disposition is given for it.

(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 exemptionsS

8The 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,

(c)vary a description of an exempt transaction.

SCHEDULE 2SChargeable consideration

(introduced by section 17)

Money or money's worthS

1The 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 taxS

2The 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.

Annotations:

Commencement Information

I78 Sch. 2 para. 2 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

Postponed considerationS

3The 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.

Annotations:

Commencement Information

I79 Sch. 2 para. 3 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

Just and reasonable apportionmentS

4(1)For the purposes of this Act consideration attributable—S

(a)to two or more land transactions, or

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

(c)in part to matters making it chargeable consideration and in part to other matters,

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.

ExchangesS

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.S

(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—

(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 interestS

6In 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.

Annotations:

Commencement Information

I82 Sch. 2 para. 6 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

Valuation of non-monetary considerationS

7Except 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 considerationS

8(1)Where the chargeable consideration for a land transaction consists in whole or in part of—S

(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 metS

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.S

(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 currencyS

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.S

(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 worksS

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—S

(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 servicesS

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.S

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

Land transaction entered into by reason of employmentS

13Where 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.

Annotations:

Commencement Information

I89 Sch. 2 para. 13 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

Indemnity given by buyerS

14Where 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.

Annotations:

Commencement Information

I90 Sch. 2 para. 14 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

Buyer bearing inheritance tax liabilityS

15Where—

(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 liabilityS

16(1)Where—S

(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 [F381992] (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)).

Annotations:

Amendments (Textual)

F38Word in Sch. 2 para. 16(1)(a)(ii) substituted (7.11.2014) by Revenue Scotland and Tax Powers Act 2014 (asp 16), s. 260(2), Sch. 4 para. 9(18) (with ss. 257-259); S.S.I. 2014/278, art. 2, Sch.

Commencement Information

I92 Sch. 2 para. 16 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

Arrangements involving public or educational bodiesS

17(1)This paragraph applies in any case where arrangements are entered into under which—S

(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”),

(c)B undertakes to carry out works or provide services to A, and

(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

[F39(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,

(c)vary the description of any qualifying body.

(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

(c)the provision of services by B to A.

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

(a)the main transfer,

(b)any transfer of surplus land, or

(c)the consideration in money paid by A to B for the building works or other services referred to in sub-paragraph (4).

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

[F40SCHEDULE 2ASADDITIONAL AMOUNT: TRANSACTIONS RELATING TO SECOND HOMES ETC.

(introduced by section 26A)

Annotations:

Amendments (Textual)

PART 1SOVERVIEW

OverviewS

1(1)This schedule makes provision about an additional amount of tax chargeable in respect of certain chargeable transactions.S

(2)It is arranged as follows—

  • Part 2 identifies the transactions to which this schedule applies,

  • Part 3 sets out the additional amount of tax,

  • Part 4 contains provision about the application of this schedule in relation to certain types of buyer,

  • Part 5 provides for repayment of and relief from the additional amount of tax in certain cases,

  • Part 6 contains special rules about the meaning of ownership of dwellings for the purposes of this schedule,

  • Part 7 contains general provision including powers to modify this schedule.

PART 2STRANSACTIONS TO WHICH THIS SCHEDULE APPLIES

Transactions relating to second homes etc.S

2(1)This schedule applies to a chargeable transaction if the following conditions are satisfied—S

(a)the subject-matter of the transaction consists of or includes the acquisition of ownership of a dwelling,

(b)the relevant consideration for the transaction is £40,000 or more,

(c)at the end of the day that is the effective date of the transaction, the buyer owns more than one dwelling, and

(d)either—

(i)the buyer is not replacing the buyer's only or main residence, or

(ii)the buyer is replacing the buyer's only or main residence but the subject-matter of the transaction also includes the acquisition of ownership of one or more other dwellings in addition to the one that the buyer intends to occupy as the buyer's only or main residence.

(2)A buyer is replacing the buyer's only or main residence if—

(a)during the period of 18 months ending with the effective date of the transaction, the buyer has disposed of the ownership of a dwelling,

(b)that dwelling was the buyer's only or main residence at any time during the period of 18 months, and

(c)on the effective date of the transaction, the buyer intends to occupy the dwelling that is or forms part of the subject-matter of the transaction as the buyer's only or main residence.

Transactions where buyer is a non-individual etc.S

3(1)This schedule applies to a chargeable transaction if the following conditions are satisfied—S

(a)the subject-matter of the transaction consists of or includes the acquisition of ownership of a dwelling,

(b)the relevant consideration for the transaction is £40,000 or more, and

(c)the buyer—

(i)is not an individual, or

(ii)is an individual and sub-paragraph (2) or (5) applies.

(2)This sub-paragraph applies if the acquisition is made in the course of a business of the individual the sole or main activity of which is investing or dealing in chargeable interests.

(3)Sub-paragraph (2) of paragraph 31 of schedule 17 applies for the purposes of sub-paragraph (2) of this paragraph as it applies for the purposes of paragraph 31(1) of that schedule.

(4)In sub-paragraph (2), the reference to a business of the individual includes a reference to a business of a partnership of which the individual is a partner.

(5)This sub-paragraph applies if the individual is making the acquisition as trustee under a settlement and, in relation to any dwelling that is or forms part of the subject-matter of the transaction, there is no interested beneficiary.

(6)For the purposes of sub-paragraph (5), a beneficiary under the settlement is an interested beneficiary in relation to a dwelling if the beneficiary has or will have a relevant interest in the dwelling.

PART 3STHE ADDITIONAL AMOUNT

Additional amountS

4(1)Where this schedule applies to a chargeable transaction, the amount of tax chargeable in respect of the transaction (as determined under section 25(1) or 26(1)) is increased by the additional amount.S

(2)The additional amount is an amount equal to [F414%] of the relevant consideration.

(3)The relevant consideration is—

(a)in a case where the transaction is a residential property transaction, the chargeable consideration for the transaction, or

(b)in a case where the transaction is a non-residential property transaction, so much of the chargeable consideration for the transaction as is attributable, on a just and reasonable apportionment, to the acquisition of ownership of the dwelling (including any interest or right pertaining to ownership of the dwelling) that is or forms part of the subject-matter of the transaction.

(4)In the case of a chargeable transaction to which this schedule applies by virtue of paragraph 2(1)(d)(ii), the relevant consideration is to exclude so much of the chargeable consideration as is attributable, on a just and reasonable apportionment, to the acquisition of ownership of the dwelling (including any interest or right pertaining to ownership of the dwelling) that the buyer intends to occupy as the buyer's only or main residence.

PART 4SCERTAIN TYPES OF BUYER

Joint buyersS

5(1)This paragraph applies to a chargeable transaction which satisfies the conditions in paragraph 2(1)(a) and (b) or 3(1)(a) and (b) if there are two or more buyers who are or will be jointly entitled to ownership of the dwelling.S

(2)The conditions set out in paragraph 2(1)(c) and (d) or, as the case may be, 3(1)(c) are satisfied if they are satisfied in relation to any one of, or more than one of, the buyers.

Spouses, civil partners, cohabitants and childrenS

6(1)For the purposes of paragraph 2(1)(c), a dwelling which is owned by—S

(a)the buyer's spouse or civil partner,

(b)the buyer's cohabitant,

(c)a person aged under 16 who is a child of—

(i)the buyer,

(ii)the buyer's spouse or civil partner, or

(iii)the buyer's cohabitant,

is to be treated as being owned by the buyer.

(2)Sub-paragraphs (1)(a) and (1)(c)(ii) do not apply if the buyer and the buyer's spouse or civil partner have separated.

(3)For the purposes of sub-paragraph (2), the parties have separated if—

(a)they no longer live together, and

(b)they do not intend to live together again.

(4)For the purposes of sub-paragraphs (1)(b) and (1)(c)(iii), a person is the buyer's cohabitant if the two of them live together as though married to one another.

Trustees in certain trustsS

7(1)This paragraph applies to a chargeable transaction which satisfies the conditions in paragraph 2(1)(a) and (b) if—S

(a)the buyer is acting as trustee of a settlement, and

(b)a beneficiary under the settlement has or will have a relevant interest in a dwelling that is or forms part of the subject-matter of the transaction.

(2)In paragraphs 2(1)(c) and (d), 2(2)(b) and (c), 5, 6 and 8(1)(b) and (c), references to the buyer are to be read as if they were references to the beneficiary.

(3)In paragraphs 2(2)(a) and 8(1)(a), references to the buyer are to be read as including references to the beneficiary.

PART 5SREPAYMENT OF AND RELIEF FROM THE ADDITIONAL AMOUNT

Repayment of additional amount in certain casesS

8(1)Sub-paragraph (2) applies in relation to a chargeable transaction to which this schedule applies by virtue of paragraph 2 if—S

(a)within the period of 18 months beginning with the day after the effective date of the transaction, the buyer disposes of the ownership of a dwelling (other than one that was or formed part of the subject-matter of the chargeable transaction),

(b)that dwelling was the buyer's only or main residence at any time during the period of 18 months ending with the effective date of the transaction, and

(c)the dwelling that was or formed part of the subject-matter of the transaction has been occupied as the buyer's only or main residence.

(2)Where this sub-paragraph applies—

(a)the chargeable transaction is to be treated as having been exempt from the additional amount, and

(b)if the buyer has made a land transaction return in respect of the transaction, the buyer may take one of the steps mentioned in sub-paragraph (3).

(3)The steps are—

(a)within the period allowed for amendment of the land transaction return, amend the return accordingly, or

(b)after the end of that period (if the land transaction return is not so amended), make a claim to the Tax Authority under section 107 of the Revenue Scotland and Tax Powers Act 2014 for repayment of the amount overpaid.

(4)For the period allowed for amendment of returns, see section 83 of the Revenue Scotland and Tax Powers Act 2014.

(5)In the case of a chargeable transaction to which this schedule applies by virtue of paragraph 2(1)(d)(ii), sub-paragraph (2)(a) has effect only in relation to the additional amount applicable to so much of the relevant consideration for the transaction as is attributable, on a just and reasonable apportionment, to the acquisition of ownership of the dwelling (including any interest or right pertaining to ownership of the dwelling) referred to in sub-paragraph (1)(c).

[F42Repayment of additional amount: spouses, civil partners and cohabitants replacing main residenceS

8A.(1)Sub-paragraph (2) applies in relation to a chargeable transaction to which this schedule applies by virtue of paragraph 2 if—S

(a)there are only two buyers, and

(b)the buyers—

(i)are (in relation to each other) spouses, civil partners or cohabitants, and

(ii)are or will be jointly entitled to ownership of the dwelling that is or forms part of the subject-matter of the transaction.

(2)Paragraph 8 has effect in relation to the transaction as if—

(a)the reference in sub-paragraph (1)(a) of that paragraph to the buyer were a reference to either or both of the buyers, and

(b)the references in sub-paragraph (1)(b) and (c) of that paragraph to the buyer were references to both of the buyers together.

(3)For the purposes of sub-paragraph (1)(b)(i), two buyers are cohabitants if they live together as though married to one another.]

Relief for purchases of 6 or more dwellingsS

9A chargeable transaction is exempt from the additional amount if it is a transaction to which section 59(8) applies.

[F43Relief for spouses, civil partners and cohabitants replacing main residenceS

9A.(1)A chargeable transaction to which this schedule applies by virtue of paragraph 2 is exempt from the additional amount if—S

(a)there are only two buyers,

(b)the buyers—

(i)are (in relation to each other) spouses, civil partners or cohabitants, and

(ii)are or will be jointly entitled to ownership of the dwelling that is or forms part of the subject-matter of the transaction, and

(c)paragraph 2(2) would apply if—

(i)the reference in paragraph (a) of that paragraph to the buyer were a reference to either of the buyers, and

(ii)the references in paragraphs (b) and (c) of that paragraph to the buyer were references to both of the buyers together.

(2)For the purposes of sub-paragraph (1)(b)(i), two buyers are cohabitants if they live together as though married to one another.]

Relief: supplementalS

10(1)A relief under paragraph 9 must be claimed in the first return made in relation to the transaction or in an amendment of that return.S

(2)For the period allowed for amendment of returns, see section 83 of the Revenue Scotland and Tax Powers Act 2014.

PART 6SOWNERSHIP OF DWELLINGS

What counts as a dwelling owned by a person?S

11(1)This paragraph applies to determine what counts as a dwelling owned by a person for the purposes of this schedule.S

(2)Dwellings situated outside Scotland (as well as such property in Scotland) are to be counted.

(3)A dwelling owned by a person is not to be counted for the purposes of paragraph 2(1)(c) if the acquisition of ownership of the dwelling by the person—

(a)is or was a chargeable transaction to which this schedule applies by virtue of paragraph 3, or

(b)would have been such a chargeable transaction but for the fact that the dwelling is situated outside Scotland.

(4)Ownership of a dwelling (other than one that is or forms part of the subject-matter of the chargeable transaction) is not to be counted if the market value of the ownership interest is less than £40,000.

(5)In determining the market value of the ownership interest in a dwelling for the purposes of sub-paragraph (4), the market value of any interest or right pertaining to ownership of the dwelling is to be included.

(6)Where the ownership interest in a dwelling is one of deemed ownership by virtue of paragraph 13 or 16 then, for the purposes of sub-paragraph (4), the market value of the interest is taken to be the market value of the dwelling.

(7)In determining the market value of a dwelling for the purposes of sub-paragraph (6)—

(a)the market value of any interest or right pertaining to ownership of the dwelling is to be included, and

(b)no account is to be taken of the effect of the existence of the interest referred to in sub-paragraph (6).

Deemed ownership: cases where title is not yet registered etc.S

12(1)This paragraph applies to determine, for the purposes of this schedule, when a person owns any dwelling where ownership of the dwelling is or has been the subject-matter or part of the subject-matter of a land transaction.S

(2)Where the person is the buyer in relation to the transaction, the person is to be treated for the purposes of this schedule as owning the dwelling as from the end of the day that is the effective date of the transaction.

(3)Where the person is the seller in relation to the transaction, the person is to be treated for the purposes of this schedule as ceasing to own the dwelling as from the end of the day that is the effective date of the transaction.

(4)In the application of this paragraph to a dwelling situated in England, Wales or Northern Ireland, “land transaction” and “effective date” have the same meanings as they have in Part 4 of the Finance Act 2003 (stamp duty land tax).

(5)In the application of this paragraph to a dwelling situated outside the United Kingdom—

(a)land transaction” means any transaction for the transfer of ownership of the dwelling, and

(b)effective date” means the date of settlement or completion of the transaction (or of any event that is equivalent to settlement or completion of the transaction).

Deemed ownership: beneficiaries under certain trustsS

13(1)This paragraph applies where a person is the beneficiary under—S

(a)a bare trust, or

(b)a settlement under the terms of which the beneficiary has a relevant interest in any dwelling that is or forms part of the trust property.

(2)For the purposes of this schedule, the beneficiary is to be treated as the owner of the dwelling.

(3)References in this schedule to “ownership” and “acquisition of ownership” are to be read accordingly.

Dwellings owned by trustees or personal representativesS

14(1)This paragraph applies where a person owns a dwelling as—S

(a)a trustee, or

(b)a personal representative of another.

(2)For the purposes of this schedule, the person is to be treated as not being the owner of the dwelling.

(3)Sub-paragraph (2) does not affect the operation of any other provision of this schedule by which the person is to be treated as the owner of the dwelling.

Deemed ownership: long leasesS

15(1)This paragraph applies where a person (“the tenant”) is the tenant under a lease of a dwelling for a term of more than 20 yearsS

(2)For the purposes of this schedule—

(a)the tenant is to be treated as the owner of the dwelling, and

(b)the landlord under the lease is to be treated as not being the owner.

(3)References in this schedule to “ownership” and “acquisition of ownership” are to be read accordingly.

Deemed ownership: proper liferentsS

16(1)This paragraph applies where a person (“the liferenter”) holds a liferent over a dwelling under a proper liferent.S

(2)For the purposes of this schedule—

(a)the liferenter is to be treated as the owner of the dwelling, and

(b)the granter of the liferent and the fiar are to be treated as not being the owner.

(3)References in this schedule to “ownership” and “acquisition of ownership” are to be read accordingly.

Deemed ownership: joint owners and owners of sharesS

17(1)This paragraph applies where two or more persons are jointly entitled to the ownership of a dwelling.S

(2)For the purposes of this schedule, each of the persons is to be treated as the owner of the dwelling.

(3)In the application of this paragraph to a dwelling situated in England, Wales or Northern Ireland, “jointly entitled” has the meaning given in section 121 of the Finance Act 2003 (minor definitions).

(4)In the application of this paragraph to a dwelling situated outside the United Kingdom, “jointly entitled” means having an interest equivalent to being jointly entitled within the meaning of this Act or the Finance Act 2003.

Dwellings outside Scotland: what counts as “ownership”S

18(1)In the case of a dwelling situated outside Scotland, a person owns the dwelling for the purposes of this schedule if the person has an interest in it that is equivalent to ownership in Scotland.S

(2)References in this schedule to “ownership” and “acquisition of ownership” are to be read accordingly.

PART 7SGENERAL PROVISION

Power of Scottish Ministers to modify scheduleS

19(1)The Scottish Ministers may by order amend paragraph 4(2) so as to substitute, for the percentage figure for the time being specified there, a different percentage figure.S

(2)The Scottish Ministers may by order amend paragraph 2(1)(b), 3(1)(b) or 11(4) so as to substitute, for the figure for the time being specified there, a different figure.

(3)The Scottish Ministers may by order modify this schedule so as to make provision for or about reliefs from the additional amount and, in particular, may—

(a)add a relief,

(b)modify any relief,

(c)remove any relief.

(4)The Scottish Ministers may by regulations modify the following provisions of this schedule—

(a)Parts 2 (except paragraphs 2(1)(b) and 3(1)(b)) and 4 so far as relating to the application of this schedule in relation to—

(i)partnerships,

(ii)trusts,

(b)Part 6 (except paragraph 11(4)),

(c)paragraph 20.

(5)An order under sub-paragraph (3) may modify any other enactment that the Scottish Ministers consider appropriate.

InterpretationS

20(1)In this schedule—S

  • bare trust” has the meaning given in paragraph 19 of schedule 18,

  • relevant consideration” is to be construed in accordance with paragraph 4(3) and (4),

  • “settlement”, except in paragraph 12(5)(b), has the meaning given in paragraph 21 of schedule 18.

(2)Part 6 of schedule 5 (what counts as a “dwelling”) applies for the purposes of this schedule as it applies for the purposes of schedule 5.

(3)For the purposes of this schedule, a beneficiary under a settlement has a relevant interest in a dwelling that is or forms part of the trust property or the subject-matter of a transaction if the beneficiary is entitled to—

(a)occupy the dwelling for life, or

(b)income (whether net or gross) in respect of the dwelling.]

SCHEDULE 3SSale and leaseback relief

(introduced by section 27)

The reliefS

1The leaseback element of a sale and leaseback arrangement is exempt from charge if the qualifying conditions are met.

Sale and leaseback arrangementsS

2A 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 conditionsS

3The 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.

InterpretationS

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

Annotations:

Commencement Information

I97 Sch. 3 para. 4 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

SCHEDULE 4SRelief for certain acquisitions of residential property

(introduced by section 27)

PART 1SIntroductory

Overview of reliefsS

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

(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 2SAcquisition by house-building company from individual acquiring new dwelling

Full reliefS

2Where 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 reliefS

3Where 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.

Annotations:

Commencement Information

I100 Sch. 4 para. 3 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

Qualifying conditionsS

4In 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,

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

(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 3SAcquisition by property trader from individual acquiring new dwelling

Full reliefS

5Where 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 reliefS

6Where 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.

Annotations:

Commencement Information

I103 Sch. 4 para. 6 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

Qualifying conditionsS

7In 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.

8Paragraph 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.

Annotations:

Commencement Information

I105 Sch. 4 para. 8 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

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

Full reliefS

9Where 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 reliefS

10Where 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.

Annotations:

Commencement Information

I107 Sch. 4 para. 10 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

Qualifying conditionsS

11In 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.

12Paragraph 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.

Annotations:

Commencement Information

I109 Sch. 4 para. 12 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

PART 5SWithdrawal of relief

IntroductoryS

13(1)Relief under this schedule is withdrawn in the following circumstances.S

(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 3S

14Relief 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.

15Paragraph 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.

Annotations:

Commencement Information

I112 Sch. 4 para. 15 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

Relief under Part 4S

16Relief 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.

17Paragraph 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.

Annotations:

Commencement Information

I114 Sch. 4 para. 17 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

PART 6SInterpretation

Meaning of “dwelling” and “new dwelling”S

18Dwelling” includes land occupied and enjoyed with the dwelling as its garden or grounds.

19A 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”S

20The 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.

21Where 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.

Annotations:

Commencement Information

I118 Sch. 4 para. 21 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

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

22References 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”S

23A “house-building company” means a company that carries on the business of constructing or adapting buildings or parts of buildings for use as dwellings.

Annotations:

Commencement Information

I120 Sch. 4 para. 23 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

24References in this schedule to such a company include any company connected with it.

Annotations:

Commencement Information

I121 Sch. 4 para. 24 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

Meaning of “property trader” and “principal”S

25(1)A “property trader” means an entity listed in sub-paragraph (2) that carries on the business of buying and selling dwellings.S

(2)The entities are—

(a)a company,

(b)a limited liability partnership,

(c)a partnership whose partners are all either companies or limited liability partnerships.

(3)A “principal”—

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

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

(c)in relation to a partnership mentioned in sub-paragraph (2)(c) means a partner or a principal of a partner.

26For 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.

[F7Additional amount: transactions relating to second homes etc.S

Schedule 2A makes provision about an additional amount of tax chargeable in respect of certain chargeable transactions.]

Meaning of “refurbishment” and “the permitted amount”S

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.

28The “permitted amount”, in relation to the refurbishment of a dwelling, is set out in the following table—

Consideration for acquisition of the dwellingPermitted amount
Not more than £200,000£10,000
More than £200,000 but not more than £400,0005% of the consideration
More than £400,000£20,000
Annotations:

Commencement Information

I125 Sch. 4 para. 28 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

[F44SCHEDULE 4ASFirst-time buyer relief

(introduced by section 27)

Eligibility for reliefS

1.(1)Relief may be claimed in respect of any chargeable transaction if—

(a)it is an acquisition of a major interest in land (see section 60),

(b)the land consists entirely of residential property and includes a dwelling,

(c)the buyer, or (if more than one) each of the buyers, is a first-time buyer who intends to occupy the dwelling as the buyer’s only or main residence,

(d)the transaction is not one of a number of linked transactions, and

(e)the transaction is not one to which schedule 2A (additional amount: transactions relating to second homes etc.) applies.

(2)Sub-paragraph (1)(d) does not apply if the main subject-matter of the other linked transaction is land referred to in paragraphs 26 or 27 of schedule 5 (multiple dwellings relief: what counts as a dwelling) and the dwelling referred to in those paragraphs is the dwelling mentioned in sub-paragraph (1)(b).

(3)Where there is a linked transaction (not subject to the exception in sub-paragraph (2)) following relief being claimed under this paragraph, the relief is withdrawn.

Meaning of first-time buyerS

2.In this schedule “first-time buyer” means a person who—

(a)has not previously been a buyer in relation to an acquisition of a major interest in land which consisted of residential property including a dwelling, and

(b)has not previously acquired an interest in a dwelling situated outside Scotland that is equivalent to the interest of a buyer referred to in sub-paragraph (a).

Relief from the taxS

3.The relief consists in the tax not being chargeable in respect of the first £175,000 of consideration payable in respect of any chargeable transaction.

Eligibility for relief: alternative finance arrangementsS

4.(1)This paragraph applies in relation to a land transaction if—

(a)it is or was an acquisition of a major interest in land,

(b)the land consists entirely of residential property and includes a dwelling, and

(c)it is or was the first transaction under an alternative finance arrangement entered into between a person and a financial institution.

(2)The person (rather than the institution) is to be treated as the buyer in relation to the transaction for the purposes of paragraphs 1(c) and 2(a) and (b).

(3)In this paragraph—

  • “alternative finance arrangement” means an arrangement of a kind mentioned in paragraph 2 or 13 of schedule 7 (alternative property finance relief),

  • “financial institution” has the meaning it has in those paragraphs (see paragraph 25 of schedule 7), and

  • “first transaction”, in relation to an alternative finance arrangement, has the meaning given in paragraph 2(a) or (as the case may be) paragraph 13(a)(i) of schedule 7.

Deemed ownership: beneficiaries under certain trustsS

5.(1)This paragraph applies where a person is or was the beneficiary under—

(a)a bare trust in which the trust property includes or included a major interest in a dwelling, or

(b)a settlement under the terms of which the beneficiary has or had a relevant interest in any dwelling that is or was part of the trust property.

(2)For the purposes of this schedule, the beneficiary is to be treated as being or having been the buyer or acquirer of the dwelling.

(3)For the purposes of this paragraph, a beneficiary under a settlement has or had a relevant interest in a dwelling that is or was part of the trust property if the beneficiary is or was entitled to—

(a)occupy the dwelling for life, or

(b)income (whether net or gross) in respect of the dwelling.

(4)In this paragraph—

  • “bare trust” has the meaning given in paragraph 19 of schedule 18 (trusts), and

  • “settlement” has the meaning given in paragraph 21 of schedule 18.

Dwellings owned by trustees or personal representativesS

6.(1)This paragraph applies where a person has or had a major interest in a dwelling as—

(a)a trustee, or

(b)a personal representative of another.

(2)For the purposes of this schedule, the person is to be treated as not being or having been the buyer or acquirer of the interest.

InterpretationS

7.(1)In this schedule “major interest” does not include the tenant’s interest in a private residential tenancy regulated by statute under the Rent (Scotland) Act 1984, the Housing (Scotland) Act 1988 or the Private Housing (Tenancies) (Scotland) Act 2016.

(2)Part 6 of schedule 5 (what counts as a “dwelling”) applies for the purposes of this schedule as it applies for the purposes of schedule 5.]

SCHEDULE 5SMultiple dwellings relief

(introduced by section 27)

PART 1SIntroductory

Overview of reliefS

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

(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 2STransactions to which this schedule applies

The ruleS

2This schedule applies to relevant transactions.

3A 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 dwellingsS

4A 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 dwellingsS

5A 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

(c)the main subject-matter of at least one of the other linked transactions consists of—

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

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

Excluded transactionsS

6A 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 3SKey terms

Consideration attributable to dwellings and remaining propertyS

7In 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.

DwellingsS

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.

Annotations:

Commencement Information

I133 Sch. 5 para. 8 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

Interest in a dwellingS

9A reference in this schedule to an interest in a dwelling is to any chargeable interest in or over a dwelling.

Annotations:

Commencement Information

I134 Sch. 5 para. 9 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

PART 4SThe relief

Calculation of reliefS

10The amount of tax chargeable in relation to a relevant transaction [F45other than one to which schedule 2A applies] is—

Amendments (Textual)

Commencement Information

I135 Sch. 5 para. 10 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

[F4610AThe amount of tax chargeable in relation to a relevant transaction to which schedule 2A applies is—

where—

DT is the tax due in relation to each dwelling that is, or is part of, the main subject-matter of the transaction, and

RT is the tax due in relation to the remaining property.]

Annotations:

Amendments (Textual)

[F47 11 .But where DT x ND [F48or, as the case may be, SDT] is less than the minimum prescribed amount, the amount of tax chargeable in relation to the relevant transaction is—

Amendments (Textual)

F47Sch. 5 paras. 11, 12 substituted (1.4.2015) by S.S.I. 2015/123, arts. 1, 8

Commencement Information

I136Sch. 5 para. 11 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

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

Amendments (Textual)

F47Sch. 5 paras. 11, 12 substituted (1.4.2015) by S.S.I. 2015/123, arts. 1, 8

Commencement Information

I137Sch. 5 para. 12 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

Tax due in relation to a dwellingS

13The tax due in relation to a dwelling is determined as follows.

  • Step 1 Find the total consideration attributable to dwellings, that is—

    (a)

    the consideration attributable to dwellings for the transaction, or

    (b)

    where the transaction is one of a number of linked transactions, the sum of—

    (i)

    the consideration attributable to dwellings for the transaction, and

    (ii)

    the 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—

    (a)

    the chargeable consideration equal to the result obtained in Step 2,

    (b)

    the transaction a residential property transaction, and

    (c)

    the transaction not a linked transaction.

    The result is the tax due in relation to a dwelling.

  • [F49Step 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. ]

Annotations:

Amendments (Textual)

Commencement Information

I138 Sch. 5 para. 13 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

Tax due in relation to remaining propertyS

14The 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.

Annotations:

Commencement Information

I139 Sch. 5 para. 14 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

GeneralS

15Attributable” means attributable on a just and reasonable basis.

Annotations:

Commencement Information

I140 Sch. 5 para. 15 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

PART 5SWithdrawal of relief

Full withdrawal of reliefS

16Relief 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.

17Where 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.

Annotations:

Commencement Information

I142 Sch. 5 para. 17 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

Partial withdrawal of reliefS

18Relief 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 [F50effective] 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.

Annotations:

Amendments (Textual)

F50 Word in Sch. 5 para. 18(b) substituted (7.11.2014) by Revenue Scotland and Tax Powers Act 2014 (asp 16) , s. 260(2) , Sch. 4 para. 9(19) (with ss. 257-259 ); S.S.I. 2014/278 , art. 2 , Sch.

Commencement Information

I143 Sch. 5 para. 18 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

19Where relief is partially withdrawn, tax is chargeable on the transaction as if the event had occurred immediately before the effective date of the transaction.

Annotations:

Commencement Information

I144 Sch. 5 para. 19 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

20In 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.

Annotations:

Commencement Information

I145 Sch. 5 para. 20 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

Relevant periodS

21The 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.

22In 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.

Annotations:

Commencement Information

I147 Sch. 5 para. 22 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

InterpretationS

23In this Part of this schedule, “event” includes any change of circumstance or change of plan.

Annotations:

Commencement Information

I148 Sch. 5 para. 23 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

PART 6SWhat counts as a dwelling

24This Part of this schedule sets out rules for determining what counts as a dwelling for the purposes of this schedule.

25A 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.

26Land 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.

Annotations:

Commencement Information

I151 Sch. 5 para. 26 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

27Land that subsists, or is to subsist, for the benefit of a dwelling is taken to be part of that dwelling.

Annotations:

Commencement Information

I152 Sch. 5 para. 27 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

28The 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.

29In paragraph 28, “relevant deeming provision” means section 10 or 11.

Annotations:

Commencement Information

I154 Sch. 5 para. 29 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

30Subsections (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.

Annotations:

Commencement Information

I155 Sch. 5 para. 30 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

SCHEDULE 6SRelief for certain acquisitions by registered social landlords

(introduced by section 27)

The reliefS

1A land transaction under which the buyer is a registered social landlord is exempt from charge if [F51one or more of] the qualifying conditions are met.

Annotations:

Amendments (Textual)

Commencement Information

I156 Sch. 6 para. 1 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

The qualifying conditionsS

2The 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, [F52or]

(c)that the transaction is funded with the assistance of a grant or other financial assistance—

(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).

Annotations:

Amendments (Textual)

Commencement Information

I157 Sch. 6 para. 2 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

Landlord controlled by tenantsS

3The 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.

Annotations:

Commencement Information

I158 Sch. 6 para. 3 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

4For the purposes of paragraph 3, “board member” is to be construed as follows—

Type of registered social landlordBoard member
CompanyA director of the company
Body corporate whose affairs are managed by its membersA member
Body of trusteesA trustee
None of the aboveA member of the committee of management or other body to which is entrusted the direction of the affairs of the registered social landlord
Annotations:

Commencement Information

I159 Sch. 6 para. 4 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

SCHEDULE 7SAlternative property finance relief

(introduced by section 27)

PART 1SIntroductory

OverviewS

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

(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 2SAlternative property finance: arrangements relieved

Land sold to financial institution and leased to personS

2Paragraphs 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.

3The 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.

4The 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).

Annotations:

Commencement Information

I163 Sch. 7 para. 4 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

5A 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.

6The 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 commonS

7Paragraphs 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.

8The 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.

9The 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).

Annotations:

Commencement Information

I168 Sch. 7 para. 9 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

10Any 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).

11The 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).

12A 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.

Annotations:

Commencement Information

I171 Sch. 7 para. 12 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

Land sold to financial institution and re-sold to personS

13Paragraphs 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.

14The 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.

15The 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).

Annotations:

Commencement Information

I174 Sch. 7 para. 15 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

PART 3SAlternative property finance: arrangements not relieved

No relief where first transaction already relievedS

16Paragraphs 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 institutionS

17Paragraphs 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.

Annotations:

Commencement Information

I176 Sch. 7 para. 17 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

18That 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).

Annotations:

Commencement Information

I177 Sch. 7 para. 18 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

19In 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.

Annotations:

Commencement Information

I178 Sch. 7 para. 19 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

20Section 1124 of the Corporation Tax Act 2010 (c.4) applies for determining who has control of the relevant financial institution.

Annotations:

Commencement Information

I179 Sch. 7 para. 20 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

PART 4SExempt interest

Interest held by financial institution an exempt interestS

21An 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.

22That 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.

23Paragraph 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).

Annotations:

Commencement Information

I182 Sch. 7 para. 23 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

24Paragraph 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 5SInterpretation

InterpretationS

25(1)In this schedule “financial institution” has the meaning given by section 564B of the Income Tax Act 2007 (c.3).S

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

26In 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.

Annotations:

Commencement Information

I185 Sch. 7 para. 26 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

SCHEDULE 8SRelief for alternative finance investment bonds

(introduced by section 27)

PART 1SOverview and interpretation

Overview of reliefS

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

(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”S

2In this schedule, “alternative finance investment bond” means arrangements to which section 564G of the Income Tax Act 2007 (c.3) (investment bond arrangements) applies.

Annotations:

Commencement Information

I187 Sch. 8 para. 2 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

InterpretationS

3In 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.

Annotations:

Commencement Information

I188 Sch. 8 para. 3 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

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

The reliefS

4For 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 assetS

5(1)Paragraph 4 does not apply if control of the underlying asset is acquired by—S

(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.S

(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 3SGeneral conditions for operation of reliefs etc.

IntroductionS

7This Part of this schedule defines conditions A to G for the purposes of paragraphs 15 to 21.

Condition AS

8Condition 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 BS

9Condition 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 CS

10(1)Condition C is that, for the purpose of generating income or gains for the alternative finance investment bond—S

(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 DS

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.S

(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

(c)is for the amount mentioned in sub-paragraph (3).

(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 ES

12Condition 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.

Annotations:

Commencement Information

I197 Sch. 8 para. 12 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

Condition FS

13Condition F is that Q holds the interest in land as a bond asset until the termination of the bond.

Annotations:

Commencement Information

I198 Sch. 8 para. 13 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

Condition GS

14(1)Condition G is that—S

(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 4SRelief for certain transactions

The relief: first transactionS

15(1)The first transaction is exempt from charge if—S

(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 reliefS

16(1)Relief under paragraph 15 is withdrawn if—S

(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

(c)at any time it becomes apparent for any other reason that any of the conditions E to G cannot or will not be met.

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

Amount of tax chargeable where relief withdrawnS

17Where relief is withdrawn, the amount of tax chargeable is determined in accordance with paragraph 18.

Annotations:

Commencement Information

I202 Sch. 8 para. 17 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

18The 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 transactionS

19(1)The second transaction is exempt from charge if—S

(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 metS

20If, 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.

Annotations:

Commencement Information

I205 Sch. 8 para. 20 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

PART 5SSupplementary

Substitution of assetS

21(1)This paragraphs applies if—S

(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.S

(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 securityS

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.S

(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 assetS

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—S

(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.S

(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 improperS

26The 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 9SCrofting community right to buy relief

(introduced by section 27)

The reliefS

The relief S

[F531.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.]

Annotations:

Amendments (Textual)

Commencement Information

I212Sch. 9 para. 1 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

InterpretationS

4In 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).

Annotations:

Commencement Information

I213 Sch. 9 para. 4 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

SCHEDULE 10SGroup relief

(introduced by section 27)

PART 1SIntroductory

OverviewS

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

(2)It is arranged as follows—

Annotations:

Amendments (Textual)

Commencement Information

I214 Sch. 10 para. 1 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

PART 2SThe relief

The reliefS

2A 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 reliefS

3Relief 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.

Annotations:

Commencement Information

I216 Sch. 10 para. 3 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

4Paragraph 3 does not apply to arrangements to which paragraph [F559, 10 or 10A] applies.

Annotations:

Amendments (Textual)

Commencement Information

I217 Sch. 10 para. 4 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

5Relief 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.

6Arrangements 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.

Annotations:

Commencement Information

I219 Sch. 10 para. 6 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

7Paragraph 5(b) does not apply to arrangements to which paragraph 10 applies.

Annotations:

Commencement Information

I220 Sch. 10 para. 7 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

8Relief 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 reliefS

9This 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

(c)as a result of which the buyer will be a member of the same group as the acquiring company.

10This 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.

[F5610A.(1)This paragraph applies to arrangements if and for so long as—S

(a)they are—

(i)a mortgage under the law of England and Wales or Northern Ireland secured by way of shares or securities in a company which, on default or the happening of any other event, allows the mortgagee to exercise its rights against the mortgagor;

(ii)an arrangement under the law of Scotland by which shares or securities in a company are transferred to a person (the “transferee”) subject to an obligation on the transferee to retransfer the shares or securities back to the transferor if certain conditions are met by the transferor but under which, on default by the transferor in meeting the conditions or the happening of any other event, the transferee is relieved of the obligation to retransfer the shares or securities back to the transferor, and

(b)the relevant circumstance described in sub-paragraph (2) applies.

(2)The relevant circumstance is that—

(a)in the case of arrangements described in sub-paragraph (1)(a)(i), the mortgagee has not exercised its rights against the mortgagor; or

(b)in the case of arrangements described in sub-paragraph (1)(a)(ii), the transferee has not exercised its right in terms of the arrangement to retain the shares or securities and refuse to transfer them back to the transferor on the conditions mentioned in that sub-paragraph not having been met.

(3)This paragraph does not apply to arrangements if the mortgagee or, as the case may be, transferee—

(a)possesses greater rights in respect of the shares or securities which are the subject of the arrangements than it requires to protect its interest as mortgagee or transferee; or

(b)could alone or together with connected persons dictate the terms or timing of the default or the happening of any event which allows it to exercise its rights against the mortgagor or to relieve it of the obligation to retransfer the shares or securities.

(4)For the purposes of sub-paragraph (3)(b) a mortgagee is not, by reason only of the mortgage, connected with a company whose shares or securities are the subject of the mortgage.

(5)In this paragraph—

  • “connected” has the same meaning as in section 1122 of the Corporation Tax Act 2010;

  • “mortgage” means any legal or equitable charge under the law of England and Wales or Northern Ireland.

(6)This paragraph applies to an arrangement under the law of a country or territory outside the United Kingdom that is analogous to either of the arrangements described in sub-paragraph (1) as it applies to the arrangement to which it is analogous and, in relation to such an arrangement, references to the mortgagor, mortgagee, transferor and transferee are to be read accordingly.]

InterpretationS

11In 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.

Annotations:

Commencement Information

I224 Sch. 10 para. 11 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

PART 3SWithdrawal of relief

OverviewS

12This 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 reliefS

13Relief under this schedule is withdrawn or partially withdrawn where—

[F57(a)paragraphs 14 and 15 apply, or

(b)paragraph 15A applies.]

Annotations:

Amendments (Textual)

F57Sch. 10 para. 13(a)(b) substituted for words in sch. 10 para. 13 (30.6.2018) by The Land and Buildings Transaction Tax (Group Relief Modification) (Scotland) Order 2018 (S.S.I. 2018/222), arts. 1(1), 2(4) (with art. 3)

Commencement Information

I226 Sch. 10 para. 13 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

14This 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.

15This 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.

[F5815A.This paragraph applies where—

(a)the relief under this schedule was available solely by virtue of the application of paragraph 10A to arrangements referred to in paragraph 3, and

(b)before the end of the period of three years beginning with the effective date, paragraph 10A ceases to apply to the arrangements.]

Amount of tax chargeable where relief withdrawnS

16Where relief is withdrawn, the amount of tax chargeable is determined in accordance with paragraph 17.

Annotations:

Commencement Information

I229 Sch. 10 para. 16 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

17The 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 withdrawnS

18Where relief is partially withdrawn, the amount of tax chargeable is an appropriate proportion of the amount determined in accordance with paragraph 17.

Annotations:

Commencement Information

I231 Sch. 10 para. 18 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

19An “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 upS

20Relief 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.

Annotations:

Commencement Information

I233 Sch. 10 para. 20 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

Cases where relief not withdrawn: stamp duty reliefsS

21Relief 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.

22Relief 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.

23But 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.

24The 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

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

25This paragraph applies to 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.

Case where relief not withdrawn: seller leaves groupS

26Relief under this schedule is not withdrawn where the buyer ceases to be a member of the same group as the seller because the seller leaves the group.

Annotations:

Commencement Information

I239 Sch. 10 para. 26 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

27The seller is regarded as leaving the group if the companies cease to be members of the same group by reason of a transaction relating to shares in—

(a)the seller, or

(b)another company that is above the seller in the group structure and as a result of the transaction ceases to be a member of the same group as the buyer.

28But if there is a change in the control of the buyer after the seller leaves the group, paragraphs 13 to 19 and 22 to 25 have effect as if the buyer had then ceased to be a member of the same group as the seller.

Annotations:

Commencement Information

I241 Sch. 10 para. 28 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

29Paragraph 28 does not apply where—

(a)there is a change in the control of the buyer because a loan creditor (within the meaning given by section 453 of the Corporation Tax Act 2010 (c.4)) obtains control of, or ceases to control, the buyer, and

(b)the other persons who controlled the buyer before the change continue to do so.

30There is a change in the control of the buyer if—

(a)a person who controls the buyer (alone or with others) ceases to do so,

(b)a person obtains control of the buyer (alone or with others), or

(c)the buyer is wound up.

31For the purposes of paragraph 30 a person does not control, or obtain control of, the buyer if that person is under the control of another person or other persons.

Annotations:

Commencement Information

I244 Sch. 10 para. 31 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

Withdrawal of relief in certain cases involving successive transactionsS

32Where the following conditions are met, paragraphs 13 to 31 have effect in relation to the relevant transaction as if the seller in relation to the earliest previous transaction falling within paragraph 37 were the seller in relation to the relevant transaction.

Annotations:

Commencement Information

I245 Sch. 10 para. 32 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

33The first condition is that there is a change in control of the buyer.

Annotations:

Commencement Information

I246 Sch. 10 para. 33 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

34The second condition is that the change occurs—

(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

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

35The third condition is that, apart from paragraph 32, relief under this schedule in relation to the relevant transaction would not be withdrawn under paragraph 13.

Annotations:

Commencement Information

I248 Sch. 10 para. 35 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

36The fourth condition is that any previous transaction falls within paragraph 37.

Annotations:

Commencement Information

I249 Sch. 10 para. 36 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

37A previous transaction falls within this paragraph if—

(a)the previous transaction is exempt from charge by virtue of this schedule or schedule 11 (reconstruction relief and acquisition relief),

(b)the effective date of the previous transaction is less than 3 years before the date of the change mentioned in the first condition,

(c)the chargeable interest acquired under the relevant transaction by the buyer in relation to that transaction is the same as, comprises, forms part of, or is derived from, the chargeable interest acquired under the previous transaction by the buyer in relation to the previous transaction, and

(d)since the previous transaction, the chargeable interest acquired under that transaction has not been acquired by any person under a transaction that is not exempt from charge by virtue of this schedule or schedule 11 (reconstruction relief and acquisition relief).

38Paragraph 33 does not apply where—

(a)there is a change in the control of the buyer because a loan creditor (within the meaning given by section 453 of the Corporation Tax Act 2010 (c.4)) obtains control of, or ceases to control, the buyer, and

(b)the other persons who controlled the buyer before the change continue to do so.

39If two or more transactions effected at the same time are the earliest previous transactions falling within paragraph 37, the reference in paragraph 32 to the seller in relation to the earliest previous transaction is a reference to the persons who are the sellers in relation to the earliest previous transactions.

Annotations:

Commencement Information

I252 Sch. 10 para. 39 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

40There is a change in the control of a company if—

(a)a person who controls the company (alone or with others) ceases to do so,

(b)a person obtains control of the company (alone or with others), or

(c)the company is wound up.

InterpretationS

41For the purposes of paragraphs 20 and 27 a company is “above” the seller in the group structure if the seller, or another company that is above the seller in the group structure, is a 75% subsidiary of the company.

Annotations:

Commencement Information

I254 Sch. 10 para. 41 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

42In this Part of this schedule—

  • “control” is to be interpreted in accordance with sections 450 and 451 of the Corporation Tax Act 2010 (c.4) (but see paragraph 31),

  • relevant associated company”, in relation to the buyer, means a company that—

    (a)

    is a member of the same group as the buyer immediately before the buyer ceases to be a member of the same group as the seller, and

    (b)

    ceases to be a member of the same group as the seller in consequence of the buyer so ceasing.

Annotations:

Commencement Information

I255 Sch. 10 para. 42 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

[F59PART 3ASRecovery of relief

Annotations:

Amendments (Textual)

Recovery of reliefS

42AThis Part applies where—

(a)relief under this schedule is withdrawn or partially withdrawn and tax is chargeable,

(b)the amount so chargeable has been finally determined, and

(c)the whole or part of the amount so chargeable is unpaid 6 months after the date on which it became payable.

42BThe following persons may, by notice under paragraph 42E, be required to pay the unpaid tax—

(a)the seller,

(b)any company that at any relevant time was a member of the same group as the buyer and was above it in the group structure,

(c)any person who at any relevant time was a controlling director of the buyer or a company having control of the buyer.

42CFor the purposes of paragraph 42B(b)—

(a) a “ relevant time ” means any time between the effective date of the transaction which was exempt from charge by virtue of this schedule and the buyer ceasing to be a member of the same group as the seller, and

(b)a company (“company A”) is “above” another company (“company B”) in a group structure if company B, or another company that is above company B in the group structure, is a 75% subsidiary of company A.

42DIn paragraph 42B(c)—

  • director ”, in relation to a company, has the meaning given by section 67(1) of the Income Tax (Earnings and Pensions) Act 2003 (c.1) (read with subsection (2) of that section) and includes a person falling within section 452(1) of the Corporation Tax Act 2010 (c.4),

  • controlling director ”, in relation to a company, means a director of the company who has control of it (construing control in accordance with sections 450 and 451 of the Corporation Tax Act 2010 (c.4)).

Recovery of relief: supplementaryS

42EThe Tax Authority may give notice to a person within paragraph 42B requiring that person within 30 days of receipt of the notice to pay the amount that remains unpaid.

42FAny such notice must be given before the end of the period of 3 years beginning with the date of the final determination mentioned in paragraph 42A(b).

42GThe notice must state the amount required to be paid by the person to whom the notice is given.

42HThe notice has effect—

(a)for the purposes of the recovery from that person of the amount required to be paid and of interest on that amount, and

(b)for the purpose of appeals,

as if it were a notice of a Revenue Scotland assessment and that amount were an amount of tax due from that person.

42IA person who has paid an amount in pursuance of a notice under paragraph 42E may recover that amount from the buyer.

42JA payment in pursuance of a notice under paragraph 42E is not allowed as a deduction in computing any income, profits or losses for any tax purpose.

42K In paragraph 42H, “ Revenue Scotland assessment ” has the same meaning as in section 100 of the Revenue Scotland and Tax Powers Act 2014 (asp 16). ]

PART 4SInterpretation

When are companies members of the same group?S

43Companies are members of the same group if one is the 75% subsidiary of the other or both are 75% subsidiaries of a third company.

When is a company a subsidiary of another company?S

44A company (A) is the 75% subsidiary of another company (B) if B—

(a)is beneficial owner of not less than 75% of the ordinary share capital of A,

(b)is beneficially entitled to not less than 75% of any profits available for distribution to equity holders of A, and

(c)would be beneficially entitled to not less than 75% of any assets of A available for distribution to its equity holders on a winding-up.

45For the purposes of paragraph 44(a)—

(a)the ownership referred to is ownership either directly or through another company or companies,

(b)the amount of ordinary share capital of A owned by B through another company or companies is to be determined in accordance with sections 1155 to 1157 of the Corporation Tax Act 2010 (c.4).

46Ordinary share capital”, in relation to a company, means all the issued share capital (by whatever name called) of the company, other than capital the holders of which have a right to a dividend at a fixed rate but have no other right to share in the profits of the company.

Annotations:

Commencement Information

I259 Sch. 10 para. 46 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

47Chapter 6 of Part 5 of the Corporation Tax Act 2010 (c.4) (group relief: equity holders and profits or assets available for distribution) applies for the purposes of paragraph 44(b) and (c) as it applies for the purposes of section 151(4)(a) and (b) of that Act.

Annotations:

Commencement Information

I260 Sch. 10 para. 47 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

48But sections 171(1)(b) and (3), 173, 174 and 176 to 178 of that Chapter are to be treated as omitted for the purposes of paragraph 44(b) and (c).

Annotations:

Commencement Information

I261 Sch. 10 para. 48 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

Other definitionsS

49In this schedule—

  • arrangements” includes any scheme, agreement or understanding, whether or not legally enforceable,

  • company” means a body corporate.

Annotations:

Commencement Information

I262 Sch. 10 para. 49 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

[F60SCHEDULE 10ASSub-sale development relief

( introduced by section 27 )

PART 1SIntroductory

Overview of reliefS

1.(1)This schedule provides for relief in the case of land transactions involving certain sub-sales.S

(2)It is arranged as follows—

  • Part 2 provides for the relief and defines key terms and expressions,

  • Part 3 provides for withdrawal of the relief,

  • Part 4 makes provision for supplementary matters.

PART 2SThe relief

GeneralS

2.(1)Relief under this schedule may be claimed by the buyer (the “first buyer”) in a contract (the “first contract”) for the acquisition by that buyer of a chargeable interest under which the acquisition is to be completed by a conveyance if—S

(a)there is a qualifying sub-sale, and

(b)the qualifying conditions are met.

(2)The reference in sub-paragraph (1) to a contract does not include a contract that is a sub-sale or an assignation of rights in relation to another contract.

Qualifying sub-saleS

3.A sub-sale is a qualifying sub-sale if—

(a)it is a sub-sale under which—

(i)the first buyer contracts to sell the whole or part of the subject-matter of the first contract to another person (the “second buyer”), and

(ii)the second buyer becomes entitled to call for a conveyance to that person of the whole or part of the subject-matter of the first contract, and

(b)immediately before the first buyer entered into the sub-sale, the first buyer was entitled under the first contract to call for a conveyance of the whole or part of that subject-matter.

Qualifying conditionsS

4.(1)The qualifying conditions are that—S

(a)the substantial performance or completion of the first contract takes place at the same time as, and in connection with, the substantial performance or completion of the qualifying sub-sale, and

(b)significant development for commercial purposes of the subject-matter of the qualifying sub-sale will be completed within the relevant period.

(2)For the purposes of sub-paragraph (1)(a), an assignation, sub-sale or other transaction (relating to the whole or part of the subject-matter of the qualifying sub-sale), as a result of which a person other than the second buyer becomes entitled to call for a conveyance to that person, is not to be treated as substantial performance of the qualifying sub-sale.

(3)The “relevant period” is the period of 5 years from the date on which the first buyer entered into the qualifying sub-sale.

Subject-matterS

5.References in this schedule to the “subject-matter” of a qualifying sub-sale are to the chargeable interest the conveyance of which the second buyer is entitled to call for as a result of the qualifying sub-sale.

6.References in this schedule to “part of the subject-matter” of the first contract are to a chargeable interest that is the same as the chargeable interest referred to in paragraph 2(1) except that it relates to part only of the land concerned.

Significant developmentS

7.In this schedule—

  • “development”—

    (a)

    means the building, on the subject-matter of the qualifying sub-sale, of buildings including educational, sports and leisure, residential, retail, office or industrial buildings (but not agricultural buildings, mining or engineering works (other than wind farms) or plant and machinery), and

    (b)

    includes the redevelopment of such buildings, where the redevelopment works carried out are comparable in scale or cost to the construction of such buildings,

  • “significant development” means development that is significant having regard to, among other things, the nature and extent of the subject-matter of the qualifying sub-sale and to the market value of that subject-matter.

8.In paragraph 7—

  • “agricultural” is to be construed as meaning used for the purposes of the trade of agriculture, which includes horticulture, fruit growing, seed growing, dairy farming, livestock breeding and keeping, the use of land as grazing land, meadow land, osier land, market gardens and nursery grounds and the use of land for woodlands where that use is ancillary to the farming of land for other agricultural purposes,

  • “building” has the meaning given in section 55 of the Building (Scotland) Act 2003,

  • “industrial building” includes a building built to be used for the purposes of a trade carried on in a factory, mill or laboratory, for the purposes of a dock undertaking, for the purposes of the trade of hotel-keeping, or for the purposes of a trade which consists of the operation or management of an airport used solely or mainly by aircraft carrying passengers or cargo for hire or reward.

Full reliefS

9.(1)W9here the subject-matter of the qualifying sub-sale is the whole subject-matter of the first contract, the land transaction—S

(a)effected as mentioned in section 9(1) on completion of the first contract, or

(b)treated as effected under section 10(1) on that contract being substantially performed,

is exempt from charge.

(2)The land transaction effected or treated as effected as mentioned in sub-paragraph (1) is “the first land transaction”.

Partial reliefS

10.(1)Where the subject-matter of the qualifying sub-sale is part of the subject-matter of the first contract, the chargeable consideration for the first land transaction is taken to be the amount calculated by deducting from the amount that would otherwise be the chargeable consideration for that transaction were there no relief under this schedule, the amount of that consideration attributable to the part of the subject-matter of that transaction which is also the subject-matter of the qualifying sub-sale.S

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

Claiming the reliefS

11.Where the first buyer claims relief under this schedule, the return made in respect of the first land transaction must include such evidence as Revenue Scotland may specify as to the significant development for commercial purposes of the subject-matter of the qualifying sub-sale that will be completed within the relevant period.

12.Relief under this schedule may not be claimed if relief is claimed under schedule 7 (alternative property finance relief).

PART 3SWithdrawal of relief

Full withdrawal of reliefS

13.Relief under this schedule is withdrawn if no development of the subject-matter of the qualifying sub-sale takes place within the relevant period.

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

Partial withdrawal of reliefS

15.(1)Relief under this schedule is partially withdrawn if—S

(a)the significant development proposed when the relief was given has not been completed within the relevant period, but

(b)some development of the subject-matter of the qualifying sub-sale has taken place within that period.

(2)Where relief is partially withdrawn, the amount of tax chargeable in relation to the first land transaction is an appropriate proportion of the amount that would have been chargeable in respect of that transaction but for the relief.

(3)An “appropriate proportion” means an appropriate proportion that is just and reasonable having regard to, among other things, the extent to which the significant development proposed when the relief was given has taken place.

PART 4SSupplementary

Disapplication of section 14S

16.Where relief under this schedule is given, section 14(1)(c) is to be disregarded in so far as it relates to the entry into the qualifying sub-sale by the first buyer.

Qualifying sub-sale: considerationS

17.Where relief under this schedule is given the chargeable consideration for the qualifying sub-sale is—

(a)so much of the consideration under the first land transaction as is referable to the subject-matter of the qualifying sub-sale and is to be given (directly or indirectly) by the second buyer or a person connected with the second buyer, and

(b)the consideration given for the qualifying sub-sale.]

SCHEDULE 11SReconstruction relief and acquisition relief

(introduced by section 27)

PART 1SIntroductory

OverviewS

1(1)This schedule provides for relief for certain transactions in connection with the reconstruction and acquisition of companies.S

(2)It is arranged as follows—

Annotations:

Amendments (Textual)

Commencement Information

I263 Sch. 11 para. 1 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

PART 2SReconstruction relief

The reliefS

2A land transaction is exempt from charge if—

(a)it is entered into for the purposes of or in connection with the transfer of an undertaking or part of an undertaking, and

(b)the qualifying conditions are met.

Qualifying conditionsS

3The qualifying conditions are—

(a)that a company (“the acquiring company”) acquires the whole or part of the undertaking of another company (“the target company”) in pursuance of a scheme for the reconstruction of the target company,

(b)that the consideration for the acquisition consists wholly or partly of the issue of non-redeemable shares in the acquiring company to all shareholders of the target company,

(c)that after the acquisition has been made—

(i)each shareholder of each of the companies is a shareholder of the other, and

(ii)the proportion of shares of one of the companies held by any shareholder is the same, or as nearly as may be the same, as the proportion of shares of the other company held by that shareholder,

(d)that the acquisition—

(i)is effected for bona fide commercial reasons, and

(ii)does not form part of arrangements the main purpose, or one of the main purposes, of which is the avoidance of liability to the tax.

4Where the consideration for the acquisition consists partly of the issue of non-redeemable shares as mentioned in the qualifying condition (b), that condition is met only if the rest of the consideration consists wholly of the assumption or discharge by the acquiring company of liabilities of the target company.

Annotations:

Commencement Information

I266 Sch. 11 para. 4 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

5If, immediately before the acquisition, the target company or the acquiring company holds any of its own shares, the shares are treated for the purposes of qualifying conditions [F62(b) and (c)] as having been cancelled before the acquisition (and, accordingly, the company is to be treated as if it were not a shareholder of itself).

Annotations:

Amendments (Textual)

Commencement Information

I267 Sch. 11 para. 5 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

PART 3SAcquisition relief

The reliefS

6(1)This paragraph applies where—S

(a)a land transaction is entered into for the purposes of or in connection with the transfer of an undertaking or part of an undertaking, and

(b)the qualifying conditions are met.

(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.

Qualifying conditionsS

7The qualifying conditions are—

(a)that a company (“the acquiring company”) acquires the whole or part of the undertaking of another company (“the target company”),

(b)that the consideration for the acquisition consists wholly or partly of the issue of non-redeemable shares in the acquiring company to—

(i)the target company, or

(ii)all or any of the target company's shareholders,

(c)that the acquiring company is not associated with another company that is a party to arrangements with the target company relating to shares of the acquiring company issued in connection with the transfer of the undertaking or part,

(d)that the undertaking or part acquired by the acquiring company has as its main activity the carrying on of a trade that does not consist wholly or mainly of dealing in chargeable interests,

(e)that the acquisition—

(i)is effected for bona fide commercial reasons, and

(ii)does not form part of arrangements the main purpose, or one of the main purposes, of which is the avoidance of liability to the tax.

8Where the consideration for the acquisition consists partly of the issue of non-redeemable shares as mentioned in qualifying condition (b), that condition is met only if the rest of the consideration consists wholly of—

(a)cash not exceeding 10% of the nominal value of the non-redeemable shares so issued,

(b)the assumption or discharge by the acquiring company of liabilities of the target company, or

(c)both of those things.

InterpretationS

9For the purposes of qualifying condition (c)—

(a)companies are associated if one has control of the other or both are controlled by the same person or [F63persons],

(b)control” is to be construed in accordance with section 1124 of the Corporation Tax Act 2010 (c.4).

Annotations:

Amendments (Textual)

Commencement Information

I272 Sch. 11 para. 9 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

10In this Part of this schedule, “trade” includes any venture in the nature of trade.

Annotations:

Commencement Information

I273 Sch. 11 para. 10 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

PART 4SWithdrawal of relief

OverviewS

11This Part of this schedule is arranged as follows—

  • paragraphs 12 to 14 provide for circumstances in which relief under Part 2 or Part 3 of this schedule is withdrawn or partially withdrawn,

  • paragraphs 15 to 21 provide for circumstances in which, despite paragraphs 12 to 14, relief is not withdrawn,

  • paragraphs 22 to 28 provide for the withdrawal of relief, which would otherwise not be withdrawn by virtue of paragraph 17 or 19, on the occurrence of certain subsequent events,

  • paragraphs 29 to 32 provide for how the tax chargeable is determined where relief is withdrawn or partially withdrawn.

Withdrawal of reliefS

12Relief under Part 2 or Part 3 of this schedule is withdrawn or partially withdrawn where paragraphs 13 and 14 apply.

Annotations:

Commencement Information

I275 Sch. 11 para. 12 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

13This paragraph applies where control of the acquiring company changes—

(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 Part 2, or is subject to a reduced amount of tax by virtue of Part 3, of this schedule (“the relevant transaction”), or

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

14This paragraph applies where, at the time the control of the acquiring company changes (“the relevant time”), it or a relevant associated company holds a chargeable interest—

(a)that was acquired by the acquiring company 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 in relation to which relief under this schedule was available but was not claimed.

Case where relief not withdrawn: change of control of acquiring company as result of transaction connected to divorce etc.S

15Relief under Part 2 or Part 3 of this schedule is not withdrawn where control of the acquiring company changes as a result of a share transaction that is effected as mentioned in—

(a)any of paragraphs (a) to (d) of paragraph 4 of schedule 1 (transactions connected with divorce etc.), or

(b)any of paragraphs (a) to (d) of paragraph 5 of schedule 1 (transactions connected with dissolution of civil partnership etc.).

16Relief under Part 2 or Part 3 of this schedule is not withdrawn where control of the acquiring company changes as a result of a share transaction that—

(a)is effected as mentioned in paragraph 7(1) of schedule 1, and

(b)meets the conditions in paragraph 7(2) of that schedule (variation of testamentary dispositions etc.).

Case where relief not withdrawn: exempt intra-group transferS

17Relief under Part 2 or Part 3 of this schedule is not withdrawn where control of the acquiring company changes as a result of an exempt intra-group transfer.

Annotations:

Commencement Information

I280 Sch. 11 para. 17 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

18But see paragraphs 22 to 24 for the effect of a subsequent non-exempt transfer.

Annotations:

Commencement Information

I281 Sch. 11 para. 18 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

Case where relief not withdrawn: share acquisition reliefS

19Relief under Part 2 or Part 3 of this schedule is not withdrawn where control of the acquiring company changes as a result of a transfer of shares to another company in relation to which share acquisition relief applies.

Annotations:

Commencement Information

I282 Sch. 11 para. 19 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

20But see paragraphs 25 to 28 for the effect of a change in the control of that other company.

Annotations:

Commencement Information

I283 Sch. 11 para. 20 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

Case where relief not withdrawn: controlling loan creditorS

21Relief under Part 2 or Part 3 of this schedule is not withdrawn where—

(a)control of the acquiring company changes as a result of a loan creditor (within the meaning of section 453 of the Corporation Tax Act 2010 (c.4)) becoming, or ceasing to be, treated as having control of the company, and

(b)the other persons who were previously treated as controlling the company continue to be so treated.

Withdrawal of relief on subsequent non-exempt transferS

22Relief under Part 2 or Part 3 of this schedule is withdrawn or partially withdrawn if—

(a)control of the acquiring company changes as a result of an exempt intra-group transfer, and

(b)paragraphs 23 and 24 apply.

23This paragraph applies where a company holding shares in the acquiring company to which the exempt intra-group transfer related, or that are derived from shares to which that transfer related, ceases to be a member of the same group as the target 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 Part 2, or is subject to a reduced amount of tax by virtue of Part 3, of this schedule (“the relevant transaction”), or

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

24This paragraph applies where the acquiring company or a relevant associated company, at that time (“the relevant time”), holds a chargeable interest—

(a)that was transferred to the acquiring company by the relevant transaction, or

(b)that is derived from an interest so transferred,

and that has not subsequently been transferred at market value under a chargeable transaction in relation to which relief under Part 2 or Part 3 of this schedule was available but was not claimed.

Withdrawal of relief where share acquisition relief applied but control of company subsequently changesS

25Relief under Part 2 or Part 3 of this schedule is withdrawn or partially withdrawn if—

(a)control of the acquiring company changes as a result of a transfer of shares to another company in relation to which share acquisition relief applies, and

(b)paragraphs 26 to 28 apply.

26This paragraph applies where control of the other company mentioned in paragraph 25(a) changes—

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

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

27This paragraph applies where, at the time control of that other company changes, it holds shares transferred to it by the transfer mentioned in paragraph 25(a), or any shares derived from shares so transferred.

Annotations:

Commencement Information

I290 Sch. 11 para. 27 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

28This paragraph applies where the acquiring company or a relevant associated company, at that time (“the relevant time”), holds a chargeable interest—

(a)that was transferred to the acquiring company by the relevant transaction, or

(b)that is derived from an interest so transferred,

and that has not subsequently been transferred at market value under a chargeable transaction in relation to which relief under Part 2 or Part 3 of this schedule was available but was not claimed.

Amount of tax chargeable where relief withdrawnS

29Where relief is withdrawn, the amount of tax chargeable is determined in accordance with paragraph 30.

Annotations:

Commencement Information

I292 Sch. 11 para. 29 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

30The 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,

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

Amount of tax chargeable where relief partially withdrawnS

31Where relief is partially withdrawn, the tax chargeable is an appropriate proportion of the amount determined in accordance with paragraph 30.

Annotations:

Commencement Information

I294 Sch. 11 para. 31 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

32An “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 acquiring company or, as the case may be, by that company and any relevant associated companies.

InterpretationS

33In paragraphs 19 and 25—

(a)share acquisition relief” means relief under section 77 of the Finance Act 1986 (c.41), and

(b)a transfer is one in relation to which that relief applies if an instrument effecting the transfer is exempt from stamp duty by virtue of that provision.

34In this Part of this schedule, references to control of a company changing are to the company becoming controlled—

(a)by a different person,

(b)by a different number of persons, or

(c)by two or more persons at least one of whom is not the person, or one of the persons, by whom the company was previously controlled.

35In this Part of this schedule—

  • control” is to be construed in accordance with sections 450 and 451 of the Corporation Tax Act 2010 (c.4),

  • exempt intra-group transfer” means a transfer of shares effected by an instrument that is exempt from stamp duty by virtue of section 42 of the Finance Act 1930 (c.28) or section 11 of the Finance Act (Northern Ireland) 1954 (c.23 (NI)) (transfers between associated bodies corporate),

  • relevant associated company”, in relation to the acquiring company, means a company—

    (a)

    that is controlled by the acquiring company immediately before the control of that company changes, and

    (b)

    of which control changes in consequence of the change of control of that company.

Annotations:

Commencement Information

I298 Sch. 11 para. 35 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

[F64PART 4ASRecovery of relief

Annotations:

Amendments (Textual)

Recovery of reliefS

35AThis Part applies where—

(a)relief under Part 2 or Part 3 of this schedule is withdrawn or partially withdrawn,

(b)the amount of tax chargeable has been finally determined, and

(c)the whole or part of the amount so chargeable is unpaid 6 months after the date on which it became payable.

35BThe following persons may, by notice under paragraph 35E, be required to pay the unpaid tax—

(a)any company that at any relevant time was a member of the same group as the acquiring company and was above it in the group structure,

(b)any person who at any relevant time was a controlling director of the acquiring company or a company having control of the acquiring company.

35CFor the purposes of paragraph 35B—

(a)relevant time ” means any time between the effective date of the relevant transaction and the change of control by virtue of which tax is chargeable, and

(b)a company (“company A”) is “above” another company (“company B”) in a group structure if company B, or another company that is above company B in the group structure, is a 75% subsidiary of company A.

35DIn paragraph 35B(b)—

  • director ”, in relation to a company, has the meaning given by section 67(1) of the Income Tax (Earnings and Pensions) Act 2003 (c.1) (read with subsection (2) of that section) and includes a person falling within section 452(1) of the Corporation Tax Act 2010 (c.4),

  • controlling director ”, in relation to a company, means a director of the company who has control of it (construing control in accordance with sections 450 and 451 of the Corporation Tax Act 2010 (c.4)).