Finance Act 1974

45 Charge to tax: first letting or occupation of building after material development. U.K.

(1) Subject to the provisions of this section and Schedule 9 to this Act, where after 17th December 1973 a chargeable building is first let or occupied to a material extent after the commencement of the relevant development, any person who on the material date has an interest in the relevant land shall be deemed for the purposes of[F1 the Capital Gains Tax Act 1979 F1 ] and Chapter I of this Part of this Act to have on that date disposed of and immediately reacquired that interest for a consideration equal to its market valueF2 F3 .

(2) For the purposes of this Chapter a chargeable building is first let or occupied to a material extent after the commencement of the relevant development on the first occasion thereafter on which either—

(a) the floor area of the part or parts let under one or more leases granted after the commencement of that development; or

(b) the floor area of the part or parts occupied as of right otherwise than under any lease so granted (whether or not the occupation began before the commencement of that development); or

(c) the aggregate of the floor area of the part or parts let as aforesaid and the floor area of the part or parts occupied as aforesaid,

is more than 25 per cent. of what was or is the floor area of the whole chargeable building on the date on which the relevant development was or is substantially completed.

(3) Subsection (1) above shall not apply in the case of a chargeable building which was wholly or partly let or occupied before 18th December 1973 if at any time before that date either—

(a) the floor area of the part or parts let under one or more leases granted after the commencement of the relevant development; or

(b) the floor area of the part or parts occupied as of right otherwise than under any lease so granted; or

(c) the aggregate of the floor area of the part or parts let as aforesaid and the floor area of the part or parts occupied as aforesaid,

was more than 25 per cent. of what was or is the floor area of the whole chargeable building on the date on which the relevant development was or is substantially completed.

For the purposes of this subsection a building or part of a building shall not be treated as let at a particular time unless it was then let under a lease granted by an instrument executed before that time.

(4) Schedule 9 to this Act shall have effect for supplementing this section.

Textual Amendments

F1 Capital Gains Tax Act 1979 (c. 14, SIF 63:1), s. 157(2)and Sch. 7 para.8for 1979-80et seq.

F2 See 1972 Sch.16 para.14A—legal restrictions on distributions not to affect amount of close company's income apportionable to participators so far as attributable to development gains on disposal deemed to have been made by virtue of s. 45(1).

F3 See also Development Land Tax Act 1976 (c. 24), s. 38—Development Land Tax—termination of liability to first letting charge on developments begun on or after 18May 1976. Development Land Tax Act 1976 (c. 24),repealed by ss. 93, 98(6)and Sch.27 Part X.