Finance Act 1988

Part II Dwelling-Houses to Which Section 50 Does Not Apply

Expensive dwelling-houses

13 (1) Section 50 of this Act does not apply to a dwelling-house the market value of which exceeds—

(a) in the case of a dwelling-house in Greater London, £125,000;

(b) in any other case, £85,000.

(2) The market value of a dwelling-house at any date (“the valuation date”) shall be taken to be the price which, at the relevant date, it might reasonably have been expected to fetch on a sale in the open market—

(a) on the assumptions as to state mentioned in sub-paragraph (3) below; and

(b) on the assumptions as to title mentioned in sub-paragraph (4) below;

and in this paragraph “the relevant date” means the date of the issue of the shares or, if later, the date when the company or any of its subsidiaries first acquired an interest in the dwelling-house (or the land which comprises the dwelling-house).

(3) The assumptions as to state are that, at the relevant date—

(a) the dwelling-house was in the same state as at the valuation date; and

(b) that the locality in which the dwelling-house is situated was in the same state, so far as concerns the other premises situated in that locality and the occupation and use of those premises, the transport services and other facilities available in the locality, and other matters affecting the amenities of the locality, as at that date.

(4) The assumptions as to title are—

(a) where the dwelling-house is in England and Wales or Northern Ireland and is a house, that the vendor was selling for an estate in fee simple with vacant possession and that the dwelling-house was to be conveyed with the same rights and subject to the same burdens as it would be if conveyed in pursuance of the right to buy legislation;

(b) where the dwelling-house is in England and Wales or Northern Ireland and is a flat, that the vendor was granting a lease with vacant possession for a term of 125 years at a rent of £10 per annum and that the grant was to be made with the same rights and subject to the same burdens as it would be if made in pursuance of that legislation; and

(c) where the dwelling-house is in Scotland, that it was available with vacant possession and with no heritable security constituted over any interest in it.

(5) In sub-paragraph (4) above “the right to buy legislation” means—

(a) in relation to a dwelling-house in England and Wales, Part V of the [1985 c. 68.] Housing Act 1985;

(b) in relation to a dwelling-house in Northern Ireland, Chapter I of Part II of the [S.I. 1983/1118 (N.I. 15).] Housing (Northern Ireland) Order 1983;

and “flat” and “house” have the same meanings as in that legislation.

(6) The Treasury may by order amend sub-paragraph (1) above by substituting a different amount for any amount for the time being specified there.

Unfit and sub-standard dwelling-houses

14 Section 50 of this Act does not apply to—

(a) a dwelling-house in England and Wales which is unfit for human habitation within the meaning of section 604 of the [1985 c. 68.] Housing Act 1985 or does not have all the standard amenities within the meaning of section 508 of that Act;

(b) a dwelling-house in Scotland which does not meet the tolerable standard described, for the purposes of the [1987 c. 26.] Housing (Scotland) Act 1987, by section 86 of that Act or does not have all the standard amenities described in the first column of Part I of Schedule 18 to that Act; or

(c) a dwelling-house in Northern Ireland which is unfit for human habitation within the meaning of Article 46 of the [S.I. 1981/156 (N.I. 3).] Housing (Northern Ireland) Order 1981 or does not have all the standard amenities within the meaning of Article 59 of the [S.I. 1983/1118 (N.I. 15).] Housing (Northern Ireland) Order 1983.

Dwelling-houses already let etc.

15 (1) Section 50 of this Act does not apply to a dwelling-house if—

(a) before the relevant date, the company or any of its subsidiaries had entered into arrangements for letting the whole or any part of the dwelling-house;

(b) at that date, the whole or any part of the dwelling-house was let; or

(c) after that date, the whole or any part of the dwelling-house has been let otherwise than on a qualifying tenancy.

(2) In this paragraph—

• “let” includes let under a licence and “letting” shall be construed accordingly;

• “the relevant date” means the date when the company or any of its subsidiaries first acquired an interest in the dwelling-house (or the land which comprises the dwelling-house).

Dwelling-houses already qualifying for relief

16 (1) Section 50 of this Act does not apply to a dwelling-house if—

(a) a certificate has been issued under section 306(2) of the Taxes Act 1988 (as modified by paragraph 10 above) by some other company (“the other company”); and

(b) at any time after the issue of the shares to which that certificate related, the conditions mentioned in sub-paragraph (2) below were satisfied in relation to the dwelling-house (or a dwelling-house the whole or any part of which has been converted into or consists of the whole or any part of the dwelling-house).

(2) The conditions referred to in sub-paragraph (1) above are satisfied in relation to a dwelling-house at any time if, at that time—

(a) the dwelling-house is a dwelling-house to which section 50 of this Act applies in relation to the other company or any of its subsidiaries; and

(b) an interest in the dwelling-house is owned by that company or any such subsidiary.

Dwelling-houses qualifying for capital allowances

17 Section 50 of this Act does not apply to a dwelling-house in respect of which the company is entitled to capital allowances under paragraph 2 of Schedule 12 to the [1982 c. 39.] Finance Act 1982.

Interpretation of certain expressions: Scotland

18 In the application of the above provisions of this Part to Scotland, references to acquiring an interest shall be construed, if there is a contract to acquire the interest, as references to entering into that contract and for the purposes of paragraph 16(2)(b) above, a company or subsidiary shall be regarded as owning an interest during the period between its entering into such a contract as regards that interest and its acquiring the interest.