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Land and Buildings Transaction Tax (Scotland) Act 2013

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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.

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Commencement Information

I1 Sch. 1 para. 1 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

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.

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Commencement Information

I2 Sch. 1 para. 2 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

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).

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Commencement Information

I3 Sch. 1 para. 3 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

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.

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Commencement Information

I4 Sch. 1 para. 4 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

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.

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Commencement Information

I5 Sch. 1 para. 5 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

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.

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Commencement Information

I6 Sch. 1 para. 6 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

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.

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Commencement Information

I7 Sch. 1 para. 7 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

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.

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Commencement Information

I8 Sch. 1 para. 8 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

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.

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Commencement Information

I9 Sch. 2 para. 1 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

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.

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Commencement Information

I10 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.

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Commencement Information

I11 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.

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Commencement Information

I12 Sch. 2 para. 4 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

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—

where—

MV is the market value of the subject-matter of the acquisition for which the chargeable consideration is being determined, and

TMV is the total market value of the subject-matter of all the relevant acquisitions.

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

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

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Commencement Information

I13 Sch. 2 para. 5 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

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.

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Commencement Information

I14 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.

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Commencement Information

I15 Sch. 2 para. 7 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

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.

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Commencement Information

I16 Sch. 2 para. 8 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

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.

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Commencement Information

I17 Sch. 2 para. 9 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

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).

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Commencement Information

I18 Sch. 2 para. 10 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

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).

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Commencement Information

I19 Sch. 2 para. 11 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

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).

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Commencement Information

I20 Sch. 2 para. 12 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

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.

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Commencement Information

I21 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.

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Commencement Information

I22 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.

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Commencement Information

I23 Sch. 2 para. 15 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

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 [F11992] (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)).

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Amendments (Textual)

F1Word 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

I24 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

[F2(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.

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Amendments (Textual)

Commencement Information

I25 Sch. 2 para. 17 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

[F3SCHEDULE 2ASADDITIONAL AMOUNT: TRANSACTIONS RELATING TO SECOND HOMES ETC.

(introduced by section 26A)

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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 [F44%] 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.

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Amendments (Textual)

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).

[F5Repayment of additional amount: spouses, civil partners and cohabitants replacing main residenceS

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Amendments (Textual)

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.

[F6Relief for spouses, civil partners and cohabitants replacing main residenceS

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Amendments (Textual)

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.

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Commencement Information

I26 Sch. 3 para. 1 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

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”).

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Commencement Information

I27 Sch. 3 para. 2 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

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.

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Commencement Information

I28 Sch. 3 para. 3 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

InterpretationS

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

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Commencement Information

I29 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.

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Commencement Information

I30 Sch. 4 para. 1 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

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.

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Commencement Information

I31 Sch. 4 para. 2 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

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.

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Commencement Information

I32 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.

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Commencement Information

I33 Sch. 4 para. 4 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

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.

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Commencement Information

I34 Sch. 4 para. 5 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

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.

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Commencement Information

I35 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.

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Commencement Information

I36 Sch. 4 para. 7 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

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.

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Commencement Information

I37 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.

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Commencement Information

I38 Sch. 4 para. 9 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

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.

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Commencement Information

I39 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.

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Commencement Information

I40 Sch. 4 para. 11 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

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.

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Commencement Information

I41 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.

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Commencement Information

I42 Sch. 4 para. 13 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

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.

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Commencement Information

I43 Sch. 4 para. 14 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

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.

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Commencement Information

I44 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.

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Commencement Information

I45 Sch. 4 para. 16 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

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.

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Commencement Information

I46 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.

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Commencement Information

I47 Sch. 4 para. 18 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

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.

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Commencement Information

I48 Sch. 4 para. 19 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

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.

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Commencement Information

I49 Sch. 4 para. 20 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

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.

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Commencement Information

I50 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.

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Commencement Information

I51 Sch. 4 para. 22 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

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.

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Commencement Information

I52 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.

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Commencement Information

I53 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.

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Commencement Information

I54 Sch. 4 para. 25 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

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.

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Commencement Information

I55 Sch. 4 para. 26 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

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

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Amendments (Textual)

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.

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Commencement Information

I56 Sch. 4 para. 27 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

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
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Commencement Information

I57 Sch. 4 para. 28 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

[F8SCHEDULE 4ASFirst-time buyer relief

(introduced by section 27)

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Amendments (Textual)

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.

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Commencement Information

I58 Sch. 5 para. 1 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

PART 2STransactions to which this schedule applies

The ruleS

2This schedule applies to relevant transactions.

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Commencement Information

I59 Sch. 5 para. 2 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

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.

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Commencement Information

I60 Sch. 5 para. 3 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

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.

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Commencement Information

I61 Sch. 5 para. 4 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

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.

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Commencement Information

I62 Sch. 5 para. 5 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

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.

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Commencement Information

I63 Sch. 5 para. 6 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

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.

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Commencement Information

I64 Sch. 5 para. 7 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

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.

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Commencement Information

I65 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.

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Commencement Information

I66 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 [F9other than one to which schedule 2A applies] is—

where—

DT is the tax due in relation to a dwelling,

ND is the number of dwellings that are, or are part of, the main subject-matter of the transaction, and

RT is the tax due in relation to remaining property.

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Amendments (Textual)

Commencement Information

I67 Sch. 5 para. 10 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

[F1010AThe 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.]

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Amendments (Textual)

[F11 11 .But where DT x ND [F12or, 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—

where—

  • MPA is the minimum prescribed amount, and

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

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Amendments (Textual)

F11Sch. 5 paras. 11, 12 substituted (1.4.2015) by S.S.I. 2015/123, arts. 1, 8

Commencement Information

I68Sch. 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—

where—

  • TT is the amount of tax that would be due in respect of the transaction but for this schedule, and

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

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Amendments (Textual)

F11Sch. 5 paras. 11, 12 substituted (1.4.2015) by S.S.I. 2015/123, arts. 1, 8

Commencement Information

I69Sch. 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.

  • [F13Step 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. ]

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Amendments (Textual)

Commencement Information

I70 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.

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Commencement Information

I71 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.

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Commencement Information

I72 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.

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Commencement Information

I73 Sch. 5 para. 16 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

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.

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Commencement Information

I74 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 [F14effective] 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.

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Amendments (Textual)

F14 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

I75 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.

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Commencement Information

I76 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.

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Commencement Information

I77 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.

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Commencement Information

I78 Sch. 5 para. 21 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

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.

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Commencement Information

I79 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.

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Commencement Information

I80 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.

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Commencement Information

I81 Sch. 5 para. 24 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

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.

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Commencement Information

I82 Sch. 5 para. 25 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

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.

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Commencement Information

I83 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.

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Commencement Information

I84 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.

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Commencement Information

I85 Sch. 5 para. 28 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

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

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Commencement Information

I86 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.

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Commencement Information

I87 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 [F15one or more of] the qualifying conditions are met.

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Amendments (Textual)

Commencement Information

I88 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, [F16or]

(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).

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Amendments (Textual)

Commencement Information

I89 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.

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Commencement Information

I90 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
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Commencement Information

I91 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.

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Commencement Information

I92 Sch. 7 para. 1 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

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.

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Commencement Information

I93 Sch. 7 para. 2 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

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.

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Commencement Information

I94 Sch. 7 para. 3 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

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).

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Commencement Information

I95 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.

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Commencement Information

I96 Sch. 7 para. 5 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

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).

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Commencement Information

I97 Sch. 7 para. 6 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

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.

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Commencement Information

I98 Sch. 7 para. 7 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

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.

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Commencement Information

I99 Sch. 7 para. 8 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

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).

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Commencement Information

I100 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).

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Commencement Information

I101 Sch. 7 para. 10 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

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).

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Commencement Information

I102 Sch. 7 para. 11 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

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.

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Commencement Information

I103 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.

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Commencement Information

I104 Sch. 7 para. 13 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

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.

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Commencement Information

I105 Sch. 7 para. 14 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

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).

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Commencement Information

I106 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.

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Commencement Information

I107 Sch. 7 para. 16 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

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.

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Commencement Information

I108 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).

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Commencement Information

I109 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.

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Commencement Information

I110 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.

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Commencement Information

I111 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.

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Commencement Information

I112 Sch. 7 para. 21 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

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.

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Commencement Information

I113 Sch. 7 para. 22 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

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).

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Commencement Information

I114 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.

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Commencement Information

I115 Sch. 7 para. 24 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

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.

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Commencement Information

I116 Sch. 7 para. 25 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

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.

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Commencement Information

I117 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.

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Commencement Information

I118 Sch. 8 para. 1 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

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.

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Commencement Information

I119 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.

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Commencement Information

I120 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.

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Commencement Information

I121 Sch. 8 para. 4 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

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.

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Commencement Information

I122 Sch. 8 para. 5 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

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.

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Commencement Information

I123 Sch. 8 para. 6 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

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.

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Commencement Information

I124 Sch. 8 para. 7 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

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.

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Commencement Information

I125 Sch. 8 para. 8 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

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.

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Commencement Information

I126 Sch. 8 para. 9 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

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).

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Commencement Information

I127 Sch. 8 para. 10 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

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.

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Commencement Information

I128 Sch. 8 para. 11 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

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.

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Commencement Information

I129 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.

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Commencement Information

I130 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.

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Commencement Information

I131 Sch. 8 para. 14 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

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.

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Commencement Information

I132 Sch. 8 para. 15 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

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.

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Commencement Information

I133 Sch. 8 para. 16 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

Amount of tax chargeable where relief withdrawnS

17Where relief is withdrawn, the amount of tax chargeable is determined in accordance with paragraph 18.

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Commencement Information

I134 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.

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Commencement Information

I135 Sch. 8 para. 18 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

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.

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Commencement Information

I136 Sch. 8 para. 19 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

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.

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Commencement Information

I137 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.

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Commencement Information

I138 Sch. 8 para. 21 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

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.

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Commencement Information

I139 Sch. 8 para. 22 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

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.

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Commencement Information

I140 Sch. 8 para. 23 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

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.

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Commencement Information

I141 Sch. 8 para. 24 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

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.

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Commencement Information

I142 Sch. 8 para. 25 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

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.

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Commencement Information

I143 Sch. 8 para. 26 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

SCHEDULE 9SCrofting community right to buy relief

(introduced by section 27)

The reliefS

The relief S

[F171.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.]

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Amendments (Textual)

Commencement Information

I144Sch. 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).

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Annotations are used to give authority for changes and other effects on the legislation you are viewing and to convey editorial information. They appear at the foot of the relevant provision or under the associated heading. Annotations are categorised by annotation type, such as F-notes for textual amendments and I-notes for commencement information (a full list can be found in the Editorial Practice Guide). Each annotation is identified by a sequential reference number. For F-notes, M-notes and X-notes, the number also appears in bold superscript at the relevant location in the text. All annotations contain links to the affecting legislation.

Commencement Information

I145 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—

  • Part 2 provides for when relief is available,

  • Part 3 provides for when the relief is withdrawn,

  • [F18Part 3A provides for recovery of tax where relief is withdrawn,]

  • Part 4 defines expressions used in this schedule.

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Amendments (Textual)

Commencement Information

I146 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.

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Commencement Information

I147 Sch. 10 para. 2 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

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.

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Commencement Information

I148 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 [F199, 10 or 10A] applies.

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Amendments (Textual)

Commencement Information

I149 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.

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Commencement Information

I150 Sch. 10 para. 5 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

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.

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Commencement Information

I151 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.

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Commencement Information

I152 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.

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Commencement Information

I153 Sch. 10 para. 8 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

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.

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Commencement Information

I154 Sch. 10 para. 9 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

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.

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Commencement Information

I155 Sch. 10 para. 10 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

[F2010A.(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.]

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Annotations are used to give authority for changes and other effects on the legislation you are viewing and to convey editorial information. They appear at the foot of the relevant provision or under the associated heading. Annotations are categorised by annotation type, such as F-notes for textual amendments and I-notes for commencement information (a full list can be found in the Editorial Practice Guide). Each annotation is identified by a sequential reference number. For F-notes, M-notes and X-notes, the number also appears in bold superscript at the relevant location in the text. All annotations contain links to the affecting legislation.

Amendments (Textual)

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.

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Commencement Information

I156 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.

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Commencement Information

I157 Sch. 10 para. 12 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

Withdrawal of reliefS

13Relief under this schedule is withdrawn or partially withdrawn where—

[F21(a)paragraphs 14 and 15 apply, or

(b)paragraph 15A applies.]

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Amendments (Textual)

F21Sch. 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

I158 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.

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Commencement Information

I159 Sch. 10 para. 14 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

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.

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Commencement Information

I160 Sch. 10 para. 15 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

[F2215A.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.]

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Amendments (Textual)

Amount of tax chargeable where relief withdrawnS

16Where relief is withdrawn, the amount of tax chargeable is determined in accordance with paragraph 17.

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Commencement Information

I161 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.

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Commencement Information

I162 Sch. 10 para. 17 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

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.

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Commencement Information

I163 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.

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Commencement Information

I164 Sch. 10 para. 19 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

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.

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Commencement Information

I165 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.

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Commencement Information

I166 Sch. 10 para. 21 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

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.

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Commencement Information

I167 Sch. 10 para. 22 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

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.

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Commencement Information

I168 Sch. 10 para. 23 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

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.

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Commencement Information

I169 Sch. 10 para. 24 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

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.

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Commencement Information

I170 Sch. 10 para. 25 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

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.

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Commencement Information

I171 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.

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Commencement Information

I172 Sch. 10 para. 27 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

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.

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Commencement Information

I173 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.

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Commencement Information

I174 Sch. 10 para. 29 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

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.

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Commencement Information

I175 Sch. 10 para. 30 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

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.

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Commencement Information

I176 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.

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Commencement Information

I177 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.

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Commencement Information

I178 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.

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Commencement Information

I179 Sch. 10 para. 34 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

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.

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Commencement Information

I180 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.

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Commencement Information

I181 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).

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Commencement Information

I182 Sch. 10 para. 37 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

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.

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Commencement Information

I183 Sch. 10 para. 38 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

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.

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Commencement Information

I184 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.

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Commencement Information

I185 Sch. 10 para. 40 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

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.

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Commencement Information

I186 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.

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Commencement Information

I187 Sch. 10 para. 42 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

[F23PART 3ASRecovery of relief

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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.

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Commencement Information

I188 Sch. 10 para. 43 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

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.

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Commencement Information

I189 Sch. 10 para. 44 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

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).

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Commencement Information

I190 Sch. 10 para. 45 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

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.

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Commencement Information

I191 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.

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Commencement Information

I192 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).

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Commencement Information

I193 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.

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Commencement Information

I194 Sch. 10 para. 49 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

[F24SCHEDULE 10ASSub-sale development relief

( introduced by section 27 )

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Amendments (Textual)

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—

  • Part 2 provides for when reconstruction relief is available,

  • Part 3 provides for when acquisition relief is available,

  • Part 4 provides for when the relief is withdrawn,

  • [F25Part 4A provides for recovery of tax where relief is withdrawn,]

  • Part 5 defines expressions used in this schedule.

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Amendments (Textual)

Commencement Information

I195 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.

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Commencement Information

I196 Sch. 11 para. 2 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

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.

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Commencement Information

I197 Sch. 11 para. 3 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

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.

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Commencement Information

I198 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 [F26(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).

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Amendments (Textual)

Commencement Information

I199 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.

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Commencement Information

I200 Sch. 11 para. 6 in force at 7.11.2014 for specified purposes by S.S.I. 2014/279 , art. 2 , Sch.

I201 Sch. 11 para. 6 in force at 1.4.2015 in so far as not already in force by S.S.I. 2015/108 , art. 2

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.

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Commencement Information

I202 Sch. 11 para. 7 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

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.

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Commencement Information

I203 Sch. 11 para. 8 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

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 [F27persons],

(b)control” is to be construed in accordance with section 1124 of the Corporation Tax Act 2010 (c.4).

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Amendments (Textual)

Commencement Information

I204 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.

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Commencement Information

I205 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.

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Commencement Information

I206 Sch. 11 para. 11 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

Withdrawal of reliefS

12Relief under Part 2 or Part 3 of this schedule is withdrawn or partially withdrawn where paragraphs 13 and 14 apply.

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Commencement Information

I207 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.

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Commencement Information

I208 Sch. 11 para. 13 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

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.

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Commencement Information

I209 Sch. 11 para. 14 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

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.).

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Commencement Information

I210 Sch. 11 para. 15 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

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.).

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Commencement Information

I211 Sch. 11 para. 16 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

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.

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Commencement Information

I212 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.

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Commencement Information

I213 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.

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Commencement Information

I214 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.

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Commencement Information

I215 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.

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Commencement Information

I216 Sch. 11 para. 21 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

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.

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Commencement Information

I217 Sch. 11 para. 22 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

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.

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Commencement Information

I218 Sch. 11 para. 23 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

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.

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Commencement Information

I219 Sch. 11 para. 24 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

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.

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Commencement Information

I220 Sch. 11 para. 25 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

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.

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Commencement Information

I221 Sch. 11 para. 26 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

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.

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Commencement Information

I222 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.

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Commencement Information

I223 Sch. 11 para. 28 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

Amount of tax chargeable where relief withdrawnS

29Where relief is withdrawn, the amount of tax chargeable is determined in accordance with paragraph 30.

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Commencement Information

I224 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.

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Commencement Information

I225 Sch. 11 para. 30 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

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.

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Commencement Information

I226 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.

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Commencement Information

I227 Sch. 11 para. 32 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

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.

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Commencement Information

I228 Sch. 11 para. 33 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

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.

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Commencement Information

I229 Sch. 11 para. 34 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

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.

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Commencement Information

I230 Sch. 11 para. 35 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

[F28PART 4ASRecovery of relief

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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)).

Recovery of relief: supplementaryS

35EThe Tax Authority may give notice to a person within paragraph 35B requiring that person within 30 days of receipt of the notice to pay the amount that remains unpaid.

35FAny 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 35A(b).

35GThe notice must state the amount required to be paid by the person to whom the notice is given.

35HThe 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.

35IA person who has paid an amount in pursuance of a notice under paragraph 35E may recover that amount from the acquiring company.

35JA payment in pursuance of a notice under paragraph 35E is not allowed as a deduction in computing any income, profits or losses for any tax purpose.

35K In paragraph 35H, “ Revenue Scotland assessment ” has the same meaning as in section 100 of the Revenue Scotland and Tax Powers Act 2014 (asp 16). ]

PART 5SInterpretation

When are companies members of the same group?S

36Companies are members of the same group if one is the 75% subsidiary of the other or both are 75% subsidiaries of a third company.

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Commencement Information

I231 Sch. 11 para. 36 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

When is a company a subsidiary of another company?S

37A 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.

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Commencement Information

I232 Sch. 11 para. 37 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

38For the purposes of paragraph 37—

(a)the ownership referred to in that paragraph is ownership either directly or through another company or companies, and

(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).

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Commencement Information

I233 Sch. 11 para. 38 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

39Ordinary 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.

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Commencement Information

I234 Sch. 11 para. 39 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

40Chapter 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 37(b) and (c) as it applies for the purposes of section 151(4)(a) and (b) of that Act.

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Commencement Information

I235 Sch. 11 para. 40 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

41But 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 37(b) and (c).

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Commencement Information

I236 Sch. 11 para. 41 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

Other definitionsS

42In this schedule—

  • “arrangements” include any scheme, agreement or understanding, whether or not legally enforceable,

  • non-redeemable shares” means shares that are not redeemable shares.

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Commencement Information

I237 Sch. 11 para. 42 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

SCHEDULE 12SRelief for incorporation of limited liability partnership

(introduced by section 27)

The reliefS

1A land transaction by which a chargeable interest is transferred by a person (“the transferor”) to a limited liability partnership in connection with its incorporation is exempt from charge if the qualifying conditions are met.

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Commencement Information

I238 Sch. 12 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 effective date of the transaction is not more than 1 year after the date of incorporation of the limited liability partnership,

(b)that at the relevant time the transferor—

(i)is a partner in a partnership, or

(ii)holds the interest transferred as nominee or bare trustee for one or more partners in a partnership,

(c)that at the relevant time the partnership mentioned in paragraph (b) is comprised of all the persons who are or are to be members of the limited liability partnership (and no-one else), and

(d)that either—

(i)the proportions of the interest transferred to which the persons mentioned in paragraph (c) are entitled immediately after the transfer are the same as those to which they were entitled at the relevant time, or

(ii)none of the differences in those proportions has arisen as part of a scheme or arrangement of which the main purpose, or one of the main purposes, is avoidance of liability to the tax.

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Commencement Information

I239 Sch. 12 para. 2 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

InterpretationS

3In this schedule—

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

  • the relevant time” means—

    (a)

    where the transferor acquired the interest after the incorporation of the limited liability partnership, immediately after the transferor acquired it, and

    (b)

    in any other case, immediately before the incorporation of the limited liability partnership.

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Commencement Information

I240 Sch. 12 para. 3 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

SCHEDULE 13SCharities relief

(introduced by section 27)

The reliefS

1A land transaction is exempt from charge if the buyer is a charity and the qualifying conditions are met.

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Commencement Information

I241 Sch. 13 para. 1 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

Qualifying conditionsS

2The qualifying conditions are—

(a)that the buyer intends to hold—

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

(ii)the greater part of that subject-matter,

for qualifying charitable purposes, and

(b)that the transaction has not been entered into for the purpose of avoiding the tax (whether by the buyer or any other person).

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Commencement Information

I242 Sch. 13 para. 2 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

Qualifying charitable purposesS

3A buyer holds the subject-matter of a transaction for qualifying charitable purposes if the buyer holds it—

(a)for use in the furtherance of the charitable purposes of the buyer or of another charity, or

(b)as an investment from which the profits are applied to the charitable purposes of the buyer.

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Commencement Information

I243 Sch. 13 para. 3 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

Withdrawal of reliefS

4Relief under this schedule is withdrawn, or partially withdrawn, if—

(a)a disqualifying event occurs—

(i)before the end of the period of 3 years beginning with the effective date of the transaction which was exempt from charge under this schedule (“the relevant transaction”), or

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

(b)at the time of the disqualifying event the buyer holds a chargeable interest—

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

(ii)that is derived from an interest so acquired.

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Commencement Information

I244 Sch. 13 para. 4 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

5A “disqualifying event” means—

(a)the buyer ceasing to be established for charitable purposes only, or

(b)the subject-matter of the relevant transaction, or any interest or right derived from it, being held or used by the buyer otherwise than for qualifying charitable purposes.

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Commencement Information

I245 Sch. 13 para. 5 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

6Where the relevant transaction is exempt from charge by virtue of qualifying condition (a)(ii), the following are also disqualifying events—

(a)any transfer by the buyer of a major interest in the whole or any part of the subject-matter of the relevant transaction, or

(b)any grant by the buyer at a premium of a low-rental lease of the whole or any part of that subject-matter,

that is not made for the charitable purposes of the buyer.

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Commencement Information

I246 Sch. 13 para. 6 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

7A lease—

(a)is granted “at a premium” if there is consideration other than rent, and

(b)is a “low-rental” lease if the annual rent (if any) is less than £1,000 a year.

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Commencement Information

I247 Sch. 13 para. 7 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

8Where relief is withdrawn, the amount of tax chargeable is the amount that would have been chargeable in respect of the relevant transaction but for the relief.

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Commencement Information

I248 Sch. 13 para. 8 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

9Where relief is partially withdrawn, the amount of tax chargeable is an appropriate proportion of the tax that would have been chargeable but for the relief.

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Commencement Information

I249 Sch. 13 para. 9 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

10An “appropriate proportion” means an appropriate proportion having regard to—

(a)what was acquired by the buyer under the relevant transaction and what is held by the buyer at the time of the disqualifying event, and

(b)the extent to which what is held by the buyer at that time becomes used or held for purposes other than qualifying charitable purposes.

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Commencement Information

I250 Sch. 13 para. 10 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

11In relation to a transfer or grant that is, by virtue of paragraph 6, a disqualifying event—

(a)the date of the event for the purposes of paragraph 4 is the effective date of the transfer or grant,

(b)paragraph 4(b) has effect as if, for “at the time” there were substituted “ immediately before ”,

(c)paragraph 10 has effect as if—

(i)in paragraph (a), for “at the time of” there were substituted “ immediately before and immediately after ”,

(ii)paragraph (b) were omitted.

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Commencement Information

I251 Sch. 13 para. 11 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

Charitable trustsS

12This schedule applies in relation to a charitable trust as it applies to a charity.

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Annotations are used to give authority for changes and other effects on the legislation you are viewing and to convey editorial information. They appear at the foot of the relevant provision or under the associated heading. Annotations are categorised by annotation type, such as F-notes for textual amendments and I-notes for commencement information (a full list can be found in the Editorial Practice Guide). Each annotation is identified by a sequential reference number. For F-notes, M-notes and X-notes, the number also appears in bold superscript at the relevant location in the text. All annotations contain links to the affecting legislation.

Commencement Information

I252 Sch. 13 para. 12 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

13Charitable trust” means—

(a)a trust of which all the beneficiaries are charities, or

(b)a unit trust scheme in which all the unit holders are charities.

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Annotations are used to give authority for changes and other effects on the legislation you are viewing and to convey editorial information. They appear at the foot of the relevant provision or under the associated heading. Annotations are categorised by annotation type, such as F-notes for textual amendments and I-notes for commencement information (a full list can be found in the Editorial Practice Guide). Each annotation is identified by a sequential reference number. For F-notes, M-notes and X-notes, the number also appears in bold superscript at the relevant location in the text. All annotations contain links to the affecting legislation.

Commencement Information

I253 Sch. 13 para. 13 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

14In this schedule as it applies in relation to a charitable trust—

(a)references to the buyer in paragraph 3(a) and (b) are to the beneficiaries or unit holders, or any of them,

(b)the reference to the buyer in paragraph 5(a) is to any of the beneficiaries or unit holders,

(c)the reference in paragraph 6 to the charitable purposes of the buyer is to those of the beneficiaries or unit holders, or any of them.

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Annotations are used to give authority for changes and other effects on the legislation you are viewing and to convey editorial information. They appear at the foot of the relevant provision or under the associated heading. Annotations are categorised by annotation type, such as F-notes for textual amendments and I-notes for commencement information (a full list can be found in the Editorial Practice Guide). Each annotation is identified by a sequential reference number. For F-notes, M-notes and X-notes, the number also appears in bold superscript at the relevant location in the text. All annotations contain links to the affecting legislation.

Commencement Information

I254 Sch. 13 para. 14 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

InterpretationS

15(1)In this schedule, “charity” means—S

(a)a body registered in the Scottish Charity Register, or

(b)a body which is—

(i)established under the law of a relevant territory,

(ii)managed or controlled wholly or mainly outwith Scotland, and

(iii)meets at least one of the conditions in sub-paragraph (2).

(2)The conditions are—

(a)the body is registered in a register corresponding to the Scottish Charity Register,

(b)the body's purposes consist only of one or more of the charitable purposes.

(3)A relevant territory is—

(a)England and Wales,

(b)Northern Ireland,

(c)a member State of the European Union other than the United Kingdom, or

(d)a territory specified in regulations made by the Scottish Ministers.

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Annotations are used to give authority for changes and other effects on the legislation you are viewing and to convey editorial information. They appear at the foot of the relevant provision or under the associated heading. Annotations are categorised by annotation type, such as F-notes for textual amendments and I-notes for commencement information (a full list can be found in the Editorial Practice Guide). Each annotation is identified by a sequential reference number. For F-notes, M-notes and X-notes, the number also appears in bold superscript at the relevant location in the text. All annotations contain links to the affecting legislation.

Commencement Information

I255 Sch. 13 para. 15 in force at 7.11.2014 for specified purposes by S.S.I. 2014/279 , art. 2 , Sch.

I256 Sch. 13 para. 15 in force at 1.4.2015 in so far as not already in force by S.S.I. 2015/108 , art. 2

16In this schedule, "charitable purposes" has the meaning given by section 106 of the Charities and Trustee Investments (Scotland) Act 2005 (asp 10).

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Annotations are used to give authority for changes and other effects on the legislation you are viewing and to convey editorial information. They appear at the foot of the relevant provision or under the associated heading. Annotations are categorised by annotation type, such as F-notes for textual amendments and I-notes for commencement information (a full list can be found in the Editorial Practice Guide). Each annotation is identified by a sequential reference number. For F-notes, M-notes and X-notes, the number also appears in bold superscript at the relevant location in the text. All annotations contain links to the affecting legislation.

Commencement Information

I257 Sch. 13 para. 16 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

17In this schedule, “annual rent” means the average annual rent over the term of the lease or, if—

(a)different amounts of rent are payable for different parts of the term, and

(b)those amounts (or any of them) are ascertainable at the time of the disqualifying event,

the average annual rent over the period for which the highest ascertainable rent is payable.

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Annotations are used to give authority for changes and other effects on the legislation you are viewing and to convey editorial information. They appear at the foot of the relevant provision or under the associated heading. Annotations are categorised by annotation type, such as F-notes for textual amendments and I-notes for commencement information (a full list can be found in the Editorial Practice Guide). Each annotation is identified by a sequential reference number. For F-notes, M-notes and X-notes, the number also appears in bold superscript at the relevant location in the text. All annotations contain links to the affecting legislation.

Commencement Information

I258 Sch. 13 para. 17 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

[F29SCHEDULE 13AS ( introduced by section 27 )

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Annotations are used to give authority for changes and other effects on the legislation you are viewing and to convey editorial information. They appear at the foot of the relevant provision or under the associated heading. Annotations are categorised by annotation type, such as F-notes for textual amendments and I-notes for commencement information (a full list can be found in the Editorial Practice Guide). Each annotation is identified by a sequential reference number. For F-notes, M-notes and X-notes, the number also appears in bold superscript at the relevant location in the text. All annotations contain links to the affecting legislation.

Amendments (Textual)

FRIENDLY SOCIETIES RELIEFS

The reliefS

1.A land transaction effected by or in consequence of any of the following is exempt from charge—

(a)an amalgamation of two or more registered societies under section 82 of the Friendly Societies Act 1974 (amalgamation and transfer of engagements),

(b)an amalgamation of two or more friendly societies under section 85 of the Friendly Societies Act 1992 (amalgamation of friendly societies),

(c)a transfer of engagements between registered societies under section 82 of the Friendly Societies Act 1974,

(d)a transfer of engagements between friendly societies under section 86 of the Friendly Societies Act 1992 (transfer of engagements by or to friendly society),

(e)a transfer of the engagements of a friendly society pursuant to a direction given by the appropriate authority under section 90 of the Friendly Societies Act 1992.

InterpretationS

2.In this schedule—

  • “the appropriate authority” has the meaning given by section 119(1) of the Friendly Societies Act 1992,

  • “friendly society” has the meaning given by section 116 of that Act,

  • “registered” in relation to a society, has the meaning given by section 111 of the Friendly Societies Act 1974.

SCHEDULE 13BS(introduced by section 27)

BUILDING SOCIETIES RELIEFS

The reliefS

1.A land transaction effected by or in consequence of any of the following is exempt from charge—

(a)an amalgamation of two or more building societies under section 93 of the Building Societies Act 1986 (amalgamations),

(b)a transfer of engagements between building societies under section 94 of that Act (transfer of engagements).

InterpretationS

2.In this schedule, “building society” has the meaning given by section 119(1) of the Building Societies Act 1986.]

SCHEDULE 14SRelief for certain compulsory purchases

(introduced by section 27)

The reliefS

1An acquisition of a chargeable interest by a local authority is exempt from charge if the qualifying condition is met.

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Annotations are used to give authority for changes and other effects on the legislation you are viewing and to convey editorial information. They appear at the foot of the relevant provision or under the associated heading. Annotations are categorised by annotation type, such as F-notes for textual amendments and I-notes for commencement information (a full list can be found in the Editorial Practice Guide). Each annotation is identified by a sequential reference number. For F-notes, M-notes and X-notes, the number also appears in bold superscript at the relevant location in the text. All annotations contain links to the affecting legislation.

Commencement Information

I259 Sch. 14 para. 1 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

Qualifying conditionS

2The qualifying condition is that the local authority has made a compulsory purchase order in respect of the chargeable interest for the purpose of facilitating the undertaking or achievement of an activity or purpose mentioned in section 189 of the Town and Country Planning (Scotland) Act 1997 (c.8) by another person.

Annotations: Help about Annotation
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Annotations are used to give authority for changes and other effects on the legislation you are viewing and to convey editorial information. They appear at the foot of the relevant provision or under the associated heading. Annotations are categorised by annotation type, such as F-notes for textual amendments and I-notes for commencement information (a full list can be found in the Editorial Practice Guide). Each annotation is identified by a sequential reference number. For F-notes, M-notes and X-notes, the number also appears in bold superscript at the relevant location in the text. All annotations contain links to the affecting legislation.

Commencement Information

I260 Sch. 14 para. 2 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

InterpretationS

3For the purposes of this schedule it does not matter how the acquisition is effected (so this provision applies where the acquisition is effected by agreement).

Annotations: Help about Annotation
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Annotations are used to give authority for changes and other effects on the legislation you are viewing and to convey editorial information. They appear at the foot of the relevant provision or under the associated heading. Annotations are categorised by annotation type, such as F-notes for textual amendments and I-notes for commencement information (a full list can be found in the Editorial Practice Guide). Each annotation is identified by a sequential reference number. For F-notes, M-notes and X-notes, the number also appears in bold superscript at the relevant location in the text. All annotations contain links to the affecting legislation.

Commencement Information

I261 Sch. 14 para. 3 in force at 1.4.2015 by S.S.I. 2015/108 , art. 2

SCHEDULE 15SRelief for compliance with planning obligations

(introduced by section 27)

The reliefS

1A land transaction that is entered into in order to comply with—

(a)a planning obligation, or

(b)a modification of a planning obligation,

is exempt from charge if the qualifying conditions are met.

Annotations: Help about Annotation
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Annotations are used to give authority for changes and other effects on the legislation you are viewing and to convey editorial information. They appear at the foot of the relevant provision or under the associated heading. Annotations are categorised by annotation type, such as F-notes for textual amendments and I-notes for commencement information (a full list can be found in the Editorial Practice Guide). Each annotation is identified by a sequential reference number. For F-notes, M-notes and X-notes, the number also appears in bold superscript at the relevant location in the text. All annotations contain links to the affecting legislation.

Commencement Information