Finance Act 2003

Transfer of chargeable interest from a partnership: chargeable consideration including rent U.K.

[F1 19 (1) This paragraph applies in relation to a transaction to which paragraph 18 applies where the whole or part of the chargeable consideration for the transaction is rent.

(2) Schedule 5 provides for the calculation of the tax chargeable in respect of the transaction, subject to the following provisions of this paragraph.

(3) Paragraph 2 of Schedule 5 (calculation of tax chargeable in respect of rent) has effect as if—

(a) for “the net present value of the rent payable over the term of the lease” there were substituted “ the relevant chargeable proportion of the net present value of the rent payable over the term of the lease ”, and

(b) for “the net present values of the rent payable over the terms of all the leases” there were substituted “ the relevant chargeable proportions of the net present values of the rent payable over the terms of all the leases ”.

(4) If there is chargeable consideration other than rent, that chargeable consideration shall be taken to be equal to—

where—

RCP is the relevant chargeable proportion,

MV is the market value of the interest transferred, and

AC is the actual chargeable consideration other than rent.

(5) If there is no chargeable consideration other than rent—

(a) there shall (despite that) be taken to be chargeable consideration other than rent (in particular for the purposes of paragraph 9 of Schedule 5), and

(b) that chargeable consideration shall be taken to be equal to—

where—

RCP is the relevant chargeable proportion, and

MV is the market value of the interest transferred.

(6) The relevant chargeable proportion in relation to—

(a) the net present value of the rent payable over the term of a lease, or

(b) the market value of the interest transferred,

is—

where SLP is the sum of the lower proportions.

(7) The relevant chargeable proportion in relation to the actual consideration other than rent is—

where SLP is the sum of the lower proportions.

(8) Paragraph 20 provides for determining the sum of the lower proportions.

(9) This paragraph is subject to paragraph 24.]

Textual Amendments

F1 Sch. 15 Pt. 3 substituted (with effect in accordance with Sch. 41 para. 3 of the amending Act) by Finance Act 2004 (c. 12), Sch. 41 para. 1