Finance Act 2013

Acquisitions and disposals

120 Acquisitions and disposals of chargeable interests

(1) References in this Part to the acquisition of a chargeable interest include any acquisition however effected (including an acquisition effected by the act of parties to a transaction, by order of a court or other authority, by or under any statutory provision or by operation of law).

(2) The surrender or release of a chargeable interest is—

(a) an acquisition of that interest by any person whose interest or right is benefited or enlarged by the transaction, and

(b) a disposal by the person ceasing to be entitled to that interest.

(3) The variation of a chargeable interest is—

(a) an acquisition of a chargeable interest by the person benefiting from the variation, and

(b) a disposal of a chargeable interest by the person whose interest is subject to or limited by the variation.

121 Date of acquisition or disposal

(1) A person who acquires a chargeable interest in or over land that consists of or includes a dwelling is treated for the purposes of this Part as acquiring the interest on the effective date of the acquisition (and therefore as entitled to the interest with effect from that date: see section 171).

(2) A person who disposes of a chargeable interest in or over land that consists of or includes a dwelling is treated for the purposes of this Part as ceasing to be entitled to the interest on the effective date of the disposal (and therefore as not being entitled to the interest on that day: see section 171).

(3) If a person’s acquisition and disposal of a chargeable interest are completed on the same day, then for the purposes of this Part—

(a) the person’s acquisition of the interest is ignored if it precedes the disposal;

(b) the person’s disposal of the interest is ignored if it precedes the acquisition.

(4) The effective date of an acquisition of a chargeable interest is—

(a) the date on which the acquisition is completed, or

(b) any alternative date the Commissioners for Her Majesty’s Revenue and Customs may prescribe by regulations.

(5) The effective date of a disposal of a chargeable interest is—

(a) the date on which the disposal is completed, or

(b) any alternative date the Commissioners for Her Majesty’s Revenue and Customs may specify by regulations.

122 Contract and conveyance: the purchaser

(1) This section applies where a person (“P”) enters into a contract under which—

(a) P is to acquire a relevant chargeable interest, and

(b) the acquisition is to be completed by a conveyance.

(2) P is not regarded as acquiring any chargeable interest by reason of entering into the contract.

(3) If the contract is substantially performed without having been completed, this Part has effect as if the substantial performance of the contract were the completion of the acquisition provided for by the contract.

(4) Accordingly, where subsection (3) applies and the contract is subsequently completed by a conveyance, that completion is not treated for the purposes of section 102 (taxable value) as effecting the acquisition of a chargeable interest.

(5) Where subsection (3) applies and—

(a) the contract is afterwards rescinded or annulled, or

(b) performance of the contract is for any other reason terminated before the contract has been carried fully into effect,

this Part has effect as if P had at the relevant time disposed of the chargeable interest referred to in subsection (1)(a).

(6) In subsection (5) “the relevant time” means—

(a) the time when the rescission or annulment takes effect, or

(b) (as the case requires) the time when performance of the contract ceases.

(7) Where subsection (3) applies and the contract is afterwards varied (or partially rescinded) so that the chargeable interest to be acquired under the contract is not the same as the chargeable interest to which the contract originally related, this Part (including subsection (3)) has effect as if the variation of the contract effected—

(a) the disposal by P of the chargeable interest referred to in subsection (1)(a), and

(b) the substantial performance of the contract, as varied.

(8) If the parties to the contract proceed as if they had varied the contract in the way mentioned in subsection (7) (without actually doing so), subsection (7) applies as if they had actually made the corresponding variation in the terms of the contract.

(9) In this section—

(a) references to completion are to the completion of the acquisition proposed, whether or not between the original parties;

(b) “contract” includes any agreement;

(c) “conveyance” includes any instrument;

(d) “relevant chargeable interest” means a chargeable interest in or over land that consists of or includes a dwelling;

(e) “substantially performed” has the same meaning as in section 44 of FA 2003.

123 Contract and conveyance: the vendor

(1) This section applies where a person (“V”) enters into a contract under which—

(a) V is to dispose of a relevant chargeable interest, and

(b) the disposal is to be completed by a conveyance.

(2) V is not regarded as disposing of a chargeable interest by reason of entering into the contract.

(3) If the contract is substantially performed without having been completed, this Part has effect as if the substantial performance of the contract were the completion of the disposal provided for by the contract.

(4) Accordingly, where subsection (3) applies and the contract is subsequently completed by a conveyance, that completion is not treated for the purposes of section 102 as effecting the disposal of a chargeable interest.

(5) Where subsection (3) applies and—

(a) the contract is afterwards rescinded or annulled, or

(b) performance of the contract is for any other reason terminated before the contract has been carried fully into effect,

this Part has effect as if V had at the relevant time re-acquired the chargeable interest referred to in subsection (1)(a).

(6) In subsection (5) “the relevant time” means—

(a) the time when the rescission or annulment takes effect, or

(b) (as the case requires) the time when performance of the contract ceases.

(7) Where subsection (3) applies and the contract is afterwards varied (or partially rescinded) so that the chargeable interest to be disposed of under the contract is not the same as the chargeable interest to which the contract originally related, this Part (including subsection (3)) has effect as if the variation of the contract effected—

(a) the re-acquisition by V of the chargeable interest referred to in subsection (1)(a), and

(b) the substantial performance of the contract, as varied.

(8) If the parties to the contract proceed as if they had varied the contract in the way mentioned in subsection (7) (without actually doing so), subsection (7) applies as if they had actually made the corresponding variation in the terms of the contract.

(9) In this section—

(a) references to completion are to the completion of the disposal proposed, between the same parties, in substantial conformity with the contract;

(b) “contract” includes any agreement;

(c) “conveyance” includes any instrument;

(d) “relevant chargeable interest” means a chargeable interest in or over land that consists of or includes a dwelling;

(e) “substantially performed” has the same meaning as in section 44 of FA 2003.