SCHEDULE 18CHARITIES RELIEF

Charity not a qualifying charity

5

(1)

This paragraph applies where—

(a)

a land transaction is not relieved from tax under paragraph 3 because the buyer is not a qualifying charity, but

(b)

the buyer is a charity (““C””) which intends to hold the greater part of the subject-matter of the transaction for qualifying charitable purposes.

(2)

In such a case—

(a)

paragraphs 3 and 4 have effect as if C were a qualifying charity, but

(b)

for the purposes of paragraph 4, “"disqualifying event”” includes the following if they are made otherwise than in furtherance of C's charitable purpose—

(i)

any transfer by C of a major interest in the whole or any part of the subject-matter of the relieved transaction;

(ii)

any grant by C at a premium of a low-rental lease of the whole or any part of that subject-matter.

(3)

In relation to a transfer or grant that, by virtue of sub-paragraph (2)(b), is a disqualifying event for the purposes of paragraph 4—

(a)

the date of the disqualifying event for those purposes is the effective date of the relieved transaction, and

(b)

paragraph 4 has effect with the modifications in sub-paragraph (4).

(4)

The modifications to paragraph 4 are—

(a)

sub-paragraph (4) is to have effect as if for ““At the time of”” there were substituted “ Immediately before ”;

(b)

sub-paragraph (6)(a) is to have effect as if for ““at the time of”” there were substituted “ immediately before and immediately after ”;

(c)

sub-paragraph (6) is to have effect as if paragraph (b) were omitted.

(5)

For the purposes of this paragraph—

(a)

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

(b)

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

(6)

In this paragraph—

(a)

“"annual rent”” has the meaning given by paragraph 36(2) of Schedule 6, and

(b)

“"rent”” has the same meaning as in that Schedule.