F1SCHEDULE 17AFurther provisions relating to leases
Agreement for lease
12A
(1)
This paragraph applies where in England and Wales or Northern Ireland—
(a)
an agreement for a lease is entered into, and
(b)
the agreement is substantially performed without having been completed.
(2)
The agreement is treated as if it were the grant of a lease in accordance with the agreement (“the notional lease”), beginning with the date of substantial performance.
The effective date of the transaction is that date.
(3)
Where a lease is subsequently granted in pursuance of the agreement—
(a)
the notional lease is treated as if it were surrendered at that time, and
(b)
the lease itself is treated for the purposes of paragraph 9 (rent for overlap period in case of grant of further lease) as if it were granted in consideration of that surrender.
F2Paragraph 5 does not apply so as to treat the notional lease and the lease itself as a single lease.
(4)
Where sub-paragraph (1) applies and the agreement is (to any extent) afterwards rescinded or annulled, or is for any other reason not carried into effect, the tax paid by virtue of that sub-paragraph shall (to that extent) be repaid by the Inland Revenue.
Repayment must be claimed by amendment of the land transaction return made in respect of the agreement.
(5)
In this paragraph “substantially performed” and “completed” have the same meanings as in section 44 (contract and conveyance).