Finance (No. 2) Act 2023

Annual tax on enveloped dwellings

2 (1) Part 3 of FA 2013 (annual tax on enveloped dwellings) is modified as follows.

(2) That Part has effect as if after section 133 there were inserted—

“133A Deemed property rental business: Homes for Ukraine Sponsorship Scheme

(1) A day in a chargeable period (“day X”) is to be treated as relievable in relation to a single-dwelling interest by virtue of section 133(1) (property rental business) if (ignoring this section) day X is not relievable by virtue of any of the provisions listed in section 132(3) and—

(a) in a case where the day immediately before day X was relievable in relation to a single-dwelling interest by virtue of section 133(1) (including by virtue of this section), Condition A or B is met in relation the dwelling on day X, or

(b) in a case where the day immediately before day X was not relievable in relation to a single-dwelling interest by virtue of section 133(1), Condition A is met in relation to the dwelling on day X.

(2) For the purposes of subsection (1)—

(a) Condition A is that the dwelling is exclusively occupied by an individual (or individuals) granted entry clearance, or permission to stay, under the Homes for Ukraine Sponsorship Scheme;

(b) Condition B is that reasonable steps are being taken to secure that the dwelling will, without undue delay, be so occupied.

(3) A day is not relievable by virtue of this section in the case of a single-dwelling interest if on that day a non-qualifying individual is permitted to occupy the dwelling.

(4) In subsection (2)(b), “without undue delay” means without delay except so far as delay is justified by commercial considerations or cannot be avoided.”

(3) Section 138 (property developers) has effect as if for subsection (2) there were substituted—

“(2) If the property developer holds an interest for the purpose mentioned in subsection (1)(b), any additional purpose the property developer may have of—

(a) exploiting the interest as a source of rents or other receipts in the course of a qualifying property rental business (after developing the land and before reselling it), or

(b) permitting an individual granted entry clearance, or permission to stay, under the Homes for Ukraine Sponsorship Scheme to occupy the dwelling,

is treated as not being a separate purpose in applying the test in subsection (1)(b).”

(4) Section 141 (property traders) has effect as if, after subsection (2), there were inserted—

“(2A) If the person holds an interest for the purpose mentioned in subsection (1)(b), any additional purpose the person may have of permitting an individual, other than a non-qualifying individual, who is granted entry clearance, or permission to stay, under the Homes for Ukraine Sponsorship Scheme to occupy the dwelling is treated as not being a separate purpose in applying the test in subsection (1)(b).”

(5) Section 174 (general interpretation) has effect as if, in subsection (1), at the appropriate place, there were inserted—

• ““the Homes for Ukraine Sponsorship Scheme” means the scheme contained in paragraphs UKR 11.1 to UKR 20.2 of Appendix Ukraine Scheme to the immigration rules (within the meaning of the Immigration Act 1971);”.

(6) The modifications made by this paragraph have effect in relation to days falling in the period—

(a) beginning with 1 April 2022, and

(b) ending with such date as may be specified in regulations made by the Treasury by statutory instrument.