Finance Act 2003

74 [F1 Exercise of collective rights by tenants of flats] U.K.

[F2 (1) This section applies where a chargeable transaction is entered into by a person or persons nominated or appointed by qualifying tenants of flats contained in premises in exercise of—

(a) a right under Part 1 of the Landlord and Tenant Act 1987 (right of first refusal), or

(b) a right under Chapter 1 of Part 1 of the Leasehold Reform, Housing and Urban Development Act 1993 (right to collective enfranchisement).]

[F3 (1A) The rate of tax is determined as follows.

• Step 1 Determine the fraction of the relevant consideration produced by dividing the total amount of that consideration by the number of qualifying flats contained in the premises.

• Step 2 If the amount produced by step 1 is [F4 £500,000] or less, determine the rate of tax and the tax chargeable in accordance with subsections (2) and (3).

• Step 3 If the amount produced by step 1 is more than [F4 £500,000] and the condition in paragraph 3(3) of Schedule 4A is not met with respect to the transaction, determine the rate of tax and the tax chargeable in accordance with subsections (2) and (3).

• Step 4 If the amount produced by step 1 is more than [F4 £500,000] and the condition in paragraph 3(3) of Schedule 4A is met with respect to the transaction, subsections (2) and (3) do not apply, and the amount of tax chargeable in respect of the transaction is 15% of the chargeable consideration for the transaction.]

[F5 (2) The rate of tax is determined under section 55 by reference to the fraction of the relevant consideration calculated under step 1 of subsection (1A).]

(3) The tax chargeable is then determined by applying that rate to the chargeable consideration for the transaction.

[F6 (4) In this section—

• “flat” and “qualifying tenant” have the same meaning as in the Chapter or Part of the Act conferring the right being exercised;

• “qualifying flat” means a flat that is held by a qualifying tenant who is participating in the exercise of the right.]

(5) References in this section to the relevant consideration have the same meaning as in section 55.

Textual Amendments

F1 S. 74 heading substituted (with effect in accordance with s. 80(7) of the amending Act) by Finance Act 2009 (c. 10), s. 80(5)

F2 S. 74(1) substituted (with effect in accordance with s. 80(7) of the amending Act) by Finance Act 2009 (c. 10), s. 80(2)

F3 S. 74(1A) inserted (with effect in accordance with Sch. 35 para. 10 of the amending Act) by Finance Act 2012 (c. 14), Sch. 35 para. 5(2)

F4 Word in s. 74(1A) substituted (with effect in accordance with s. 112(2)-(4) of the amending Act) by Finance Act 2014 (c. 26), s. 112(1)

F5 S. 74(2) substituted (with effect in accordance with Sch. 35 para. 10 of the amending Act) by Finance Act 2012 (c. 14), Sch. 35 para. 5(3)

F6 S. 74(4) substituted (with effect in accordance with s. 80(7) of the amending Act) by Finance Act 2009 (c. 10), s. 80(4)

Modifications etc. (not altering text)

C1 S. 55(2) modified (temp.) (21.7.2009) by Finance Act 2009 (c. 10), s. 10(1)

Commencement Information

I1 Pt. 4 wholly in force at Royal Assent subject to Sch. 19, see s. 124, Sch. 19 para. 1(1)