Part V

Stamp Duty

Lease or tack: associated bodies.
151
1
Stamp duty under Part II of Schedule 13 to the Finance Act 1999 (lease) shall not be chargeable on an instrument which is—
a
a lease,
b
an agreement for a lease, or
c
an agreement with respect to a letting,
as respects which the condition in subsection (2) below is satisfied. This subsection is subject to subsection (4A) below.
2
The condition is that it is shown to the satisfaction of the Commissioners of Inland Revenue that—
a
the lessor is a body corporate and the lessee is another body corporate,
b
those bodies are associated at the time the instrument is executed,
c
in the case of an agreement, the agreement is for the lease or letting to be granted to the lessee or to a body corporate which is associated with the lessee at the time the instrument is executed, and
d
the instrument is not executed in pursuance of or in connection with an arrangement falling within subsection (3) below.
3
An arrangement falls within this subsection if it is one under which—
a
the consideration, or any part of the consideration, for the lease or agreement was to be provided or received (directly or indirectly) by a person other than a body corporate which at the relevant time was associated with either the lessor or the lessee, or
b
the lessor and the lessee were to cease to be associated by reason of the lessor or a third body corporate ceasing to be the lessee’s parent;
and the relevant time is the time of the execution of the instrument.
4
Without prejudice to the generality of paragraph (a) of subsection (3) above, an arrangement shall be treated as within that paragraph if it is one under which the lessor or the lessee or a body corporate associated with either at the relevant time was to be enabled to provide any of the consideration, or was to part with any of it, by or in consequence of the carrying out of a transaction which involved (or transactions any of which involved) a payment or other disposition by a person other than a body corporate associated with the lessor or the lessee at the relevant time.
4A
An instrument shall not be exempt from stamp duty by virtue of subsection (1) above if at the time the instrument is executed arrangements are in existence by virtue of which at that or some later time any person has or could obtain, or any persons together have or could obtain, control of the lessee but not of the lessor.
5
An instrument mentioned in subsection (1) above shall not be treated as duly stamped unless—
a
it is duly stamped in accordance with the law that would apply but for that subsection, or
b
it has, in accordance with section 12 of the Stamp Act 1891, been stamped with a particular stamp denoting either that it is not chargeable with any duty or that it is duly stamped.
6
In this section—
a
references to the lessor are to the person granting the lease or (in the case of an agreement) agreeing to grant the lease or letting;
b
references to the lessee are to the person being granted the lease or (in the case of an agreement) agreeing for the lease or letting to be granted to him or another.
7
For the purposes of this section bodies corporate are associated at a particular time if at that time one is the parent of the other or another body corporate is the parent of each.
8
For the purposes of this section one body corporate is the parent of another at a particular time if at that time the first body.
a
is beneficial owner of not less than 75 per cent. of the ordinary share capital of the second body.
b
is beneficially entitled to not less than 75 per cent of any profits available for distribution to equity holders of the second body; and
c
would be beneficially entitled to not less than 75 per cent of any assets of the second body available for distribution to its equity holders on a winding-up.
9
In subsection (8) above “ordinary share capital”, in relation to a body corporate, means all the issued share capital (by whatever name called) of the body corporate, other than capital the holders of which have a right to a dividend at a fixed rate but have no other right to share in the profits of the body corporate.
10
The ownership referred to in paragraph (a) of subsection (8) above is ownership either directly or through another body corporate or other bodies corporate, or partly directly and partly through another body corporate or other bodies corporate; and Part I of Schedule 4 to the Finance Act 1938 (determination of amount of capital held through other bodies corporate) shall apply for the purposes of that paragraph.
10A
Chapter 6 of Part 5 of the Corporation Tax Act 2010
shall apply for the purposes of paragraphs (b) and (c) of subsection (8) as it applies for the purposes of
section 151(4)(a) and (b)
of that Act; but this is subject to subsection (10B).
10B
In determining for the purposes of this section whether a body corporate is the parent of the lessor,
sections 171(1)(b) and (3), 173, 174 and 176 to 178 of the Corporation Tax Act 2010
shall not apply for the purposes of paragraph (b) or (c) of subsection (8) above.
10C
In this section, “
control
” shall be construed in accordance with
section 1124 of the Corporation Tax Act 2010
.
11
This section shall apply in relation to instruments executed on or after the day on which this Act is passed.
S. 151 restricted (retrospective to 24.4.2002) by Finance Act 2002 (c. 23), s. 111(4)(b)(10), Sch. 34
Words in s. 151(1) substituted (27.7.1999 with effect as mentioned s. 112(6) of the amending Act) by 1999 c. 16, s. 112(4)(6), Sch. 14 para. 33(a) (with s. 122(1)-(3))
Words in s. 151(1)(a)(b) substituted (27.7.1999 with effect as mentioned s. 112(6) of the amending Act) by 1999 c. 16, s. 112(4)(6), Sch. 14 para. 33(b) (with s. 122(1)-(3))
Words in s. 151(1) inserted (28.7.2000 with effect as mentioned in s. 125(7) of the amending Act) by 2000 c. 17, s. 125(2)(7)
Words in s. 151(2)(c)(3)(a) substituted (27.7.1999 with effect as mentioned s. 112(6) of the amending Act) by 1999 c. 16, s. 112(4)(6), Sch. 14 para. 33(b) (with s. 122(1)-(3))
S. 151(4A) inserted (28.7.2000 with effect as mentioned in s. 125(7) of the amending Act) by 2000 c. 17, s. 125(3)(7)
1891 c. 39.
Words in s. 151(6)(a)(b) substituted (27.7.1999 with effect as mentioned s. 112(6) of the amending Act) by 1999 c. 16, s. 112(4)(6), Sch. 14 para. 33(b) (with s. 122(1)-(3))
S. 151(8)(b)(c) and “(a)” in s. 151(8) inserted (28.7.2000 with effect as mentioned in s. 125(7) of the amending Act) by 2000 c. 17, s. 125(4)(7)
Words in s. 151(10) inserted (28.7.2000 with effect as mentioned in s. 125(7) of the amending Act) by 2000 c. 17, s. 125(5)(a)(7)
1938 c. 46.
Words in s. 151(10) substituted (28.7.2000 with effect as mentioned in s. 125(7) of the amending Act) by 2000 c. 17, s. 125(5)(b)(7)
S. 151(10A)-(10C) inserted (28.7.2000 with effect as mentioned in s. 125(7) of the amending Act) by 2000 c. 17, s. 125(6)(7)
Words in s. 151(10A) substituted (with effect in accordance with s. 1184(1) of the amending Act) by Corporation Tax Act 2010 (c. 4), s. 1184(1), Sch. 1 para. 287(2)(a) (with Sch. 2)
Words in s. 151(10A) substituted (with effect in accordance with s. 1184(1) of the amending Act) by Corporation Tax Act 2010 (c. 4), s. 1184(1), Sch. 1 para. 287(2)(b) (with Sch. 2)
Words in s. 151(10B) substituted (with effect in accordance with s. 1184(1) of the amending Act) by Corporation Tax Act 2010 (c. 4), s. 1184(1), Sch. 1 para. 287(3) (with Sch. 2)
Words in s. 151(10C) substituted (with effect in accordance with s. 1184(1) of the amending Act) by Corporation Tax Act 2010 (c. 4), s. 1184(1), Sch. 1 para. 287(4) (with Sch. 2)