Background
103.The Government announced in Budget 2012 that it would consult on reforming section 45 FA 2003. A consultation document was published on 17 July and closed on 9 October 2012. A consultation response document was published on 11 December alongside the legislation in the draft Finance Act 2013. The second consultation on the draft legislation closed on 6 February 2013. Revised legislation was included in FB 2013, published on 28 March 2013.
104.The current law achieves two broad outcomes where a transfer of rights takes place. The transferee is charged SDLT on a single land transaction which is an amalgam of the transfer of rights and the ultimate acquisition of the land. Any acquisition by the transferor is disregarded if it is completed at the same time and in connection with the acquisition by the transferee.
105.The Schedule broadly produces the same outcome as the current rules, but is more robust against attempted avoidance.
106.The amendments give relief to assignments of rights and qualifying subsales. They set out what is meant by a “pre-completion transaction” and how assignments of rights and free-standing transfers (all other transactions that do not fall within the definition of an assignment of rights) are to be treated. In assignments of rights and qualifying subsales, the transferor will be regarded as making an acquisition of a chargeable interest for SDLT purposes and will need to make a land transaction return in order to be able to claim relief. The transferor will be able to make a claim for full relief in certain circumstances. The relief will be subject to an avoidance purpose test.
107.The position for the transferee will remain broadly the same with the exception of the introduction of an anti-avoidance minimum consideration rule for connected parties or non-arm’s length transactions.
