Finance Act 1967

Section 34.

SCHEDULE 15 Provisions Consequential on Betterment Levy

Allowance for levy under Cases VUL and VI of Schedule D

1 (1) For the purposes of section 22(1) of the [1963 c. 25.] Finance Act 1963 (taxation of premium on grant of lease) the amount of any premium payable to the landlord shall be reduced by the amount of any betterment levy charged on the premium, and that reduction shall be made before the reduction under the said section 22(1) depending on the length of the lease.

(2) In applying subsection (6) of the said section 22 (premiums payable by instalments: claim for treatment as rent) to a premium which falls to be reduced under sub-paragraph (1) above (looking at the fraction by which it is reduced before any reduction depending on the length of the lease) a reduction by that fraction shall be made in the amount of each instalment.

(3) Where a reduction is made under sub-paragraph (2) above, the provisions of section 29(6)(b) of the Finance Act 1963 (which prevent instalments taxed under the said section 22(6) from being treated as trading receipts) shall apply only to the part of each of the instalments which is so taxed.

(4) For the purposes of sub-paragraph (1) above the amount of betterment levy charged on a premium is the principal amount of the betterment levy under Case B charged in respect of the grant of the lease reduced by applying the fraction (if less than unity) where—

• " A " is the capital value of the premium payable to the landlord as brought into account under paragraph 7 of Schedule 4 to the [1967 c. 1.] Land Commission Act 1967, and

• " B " is the aggregate amount of consideration as computed for the purposes of charging betterment levy.

(5) Sub-paragraphs (1) and (4) above shall also apply as respects any amounts brought into subsection (1) of section 22 of the Finance Act 1963 as a premium by subsection (2) of that section (landlord's benefit from tenant's obligation to carry out work on premises) so far as that benefit is brought into account under the said paragraph 7 of Schedule 4 to the Land Commission Act 1967 ; and references to premiums in this paragraph shall be construed accordingly.

(6) For the purposes of sub-paragraph (1) above the amount of betterment levy charged on any sum brought into subsection (1) of the said section 22 as a premium by subsection (4) of that section (consideration for the variation or waiver of the terms of a lease) is the principal amount of the betterment levy under Case E or Case F charged in respect of the disposition for which that sum is consideration, but subject to a proportionate reduction as under sub-paragraph (4) above where the sum forms part only of the consideration brought into account in assessing the betterment levy in respect of the disposition and, where the levy is under Case F, subject to such adjustments of the consideration so brought into account as may be appropriate; and references to a premium in this paragraph shall be construed accordingly.

(7) Any taxable amount under section 23 or section 24 of the [1963 c. 25.] Finance Act 1963 (assignment of lease at undervalue and sale with right to reconveyance) shall be reduced by so much of the principal amount of any betterment levy under Case A charged on the assignment or sale on which the charge to tax arises as is attributable to the said taxable amount, and that reduction shall be made before any reduction under the said section 23 depending on the length of the lease, or any reduction under the said section 24 depending on the time between the sale and a subsequent reconveyance.

(8) Any reduction to be effected under any of the preceding provisions of this paragraph shall be disregarded in arriving at—

(a) " the amount chargeable on the superior interest " in paragraphs 8, 9 and 10 of Schedule 4 to the Finance Act 1963 (allowance to person paying premium in respect of amount chargeable on the premium), and

(b) " the amount chargeable " in Schedule 9 to that Act (allowance of trading deduction where premium paid).

(9) Where for the purposes of Part III of the [1967 c. 1.] Land Commission Act 1967 a notice of assessment of betterment levy results in an operative assessment of levy it shall become final and conclusive for the purposes of this paragraph, but subject to any adjustment under section 54 or section 55 of that Act (mistake of fact and further notice of assessment of levy), or under any other provision of that Act.

(10) Where betterment levy is chargeable in respect of land part only of which is the relevant land for the purposes of the charge to tax under Case VIII or Case VI of Schedule D, or where part of the consideration for a disposition is payable to a person other than the grantor in the circumstances mentioned in section 36(3) of the Land Commission Act 1967, the levy shall be apportioned in such manner as may be appropriate in the circumstances.

(11) Any question arising in any appeal against an assessment to tax as to the application of the preceding provisions of this paragraph shall be determined on a reference to the Lands Tribunal.

(12) The Land Commission shall afford to the inspector and to the Lands Tribunal such information as they may require for the purpose of this paragraph.

(13) In relation to land in Scotland for any reference in this paragraph to the Lands Tribunal there shall be substituted a reference to the Lands Tribunal for Scotland:

Provided that until sections 1 to 3 of the [1949 c. 42.] Lands Tribunal Act 1949 come into force as regards Scotland, this subsection shall have effect as if for the reference to the Lands Tribunal for Scotland there were substituted a reference to a person selected from the panel of referees appointed under Part I of the [1910 c. 8.] Finance (1909-1910) Act 1910.

(14) This paragraph shall apply in relation to any chargeable act or event before, as well as after, the passing of this Act.

Relief in respect of levy from estate duty on gifts inter vivos, etc.

2 (1) If property comprised in a gift inter vivos, and not settled by the gift, is deemed for the purposes of estate duty to pass on a death, and by reason of a chargeable act or event at a time before the death betterment levy is chargeable—

(a) on the donee or his personal representative in respect of a chargeable interest which is at that time comprised in the gift, and which has not been settled by the donee, or

(b) if the principal value of the property for the purpose of estate duty on the death is to be ascertained at a time before the death, on a successor to the donee in respect of a chargeable interest which at that time was comprised in the gift, and which was not settled by the donee,

the principal value of the property for the purposes of estate duty on the death shall be reduced by the principal amount of the betterment levy, and that reduction shall be made before any reduction of that value under section 64 of the [1960 c. 44.] Finance Act 1960 (graduation of charge by reference to period between gift and death).

(2) If any property ceasing to be settled property by virtue of subsection (8) proviso or subsection (12) proviso of section 38 of the [1957 c. 49.] Finance Act 1957 is to be treated as comprised in a gift inter vivos deemed for purposes of estate duty to pass on a death, or as the case may be as comprised in property in which an interest within section 43 of the [1940 c. 29.] Finance Act 1940 subsisted and, by reason of a chargeable act or event after it ceases to be settled property but before the death, betterment levy is chargeable on the person taking the settled property or his successor in respect of a chargeable interest which was comprised in that property when it ceased to be settled property, the principal value of the property for the purposes of estate duty on the death shall be reduced by the principal amount of the betterment levy, and that reduction shall be made before any reduction of that value under section 64 of the Finance Act 1960.

(3) Where for the purposes of Part III of the [1967 c. 1.] Land Commission Act 1967 a notice of assessment of betterment levy results in an operative assessment of levy it shall become final and conclusive for the purposes of this paragraph, but subject to any adjustment under section 54 or section 55 of that Act (mistake of fact and further notice of assessment of levy), or under any other provision of that Act.

(4) The Board may require the Land Commission to issue a certificate giving particulars of the relevant act or event and of the amount of the levy; and in any proceedings relating to relief under this paragraph the certificate shall be sufficient evidence of the facts which it states.

Where the Land Commission have been required to give a certificate under this sub-paragraph it shall be their duty to inform the Board of any adjustment of the levy falling to be made under the [1967 c. 1.] Land Commission Act 1967.

(5) Where betterment levy is chargeable in respect of land part only of which is the land comprised in the gift, or where two or more persons are jointly or severally liable to pay the levy, the levy shall be apportioned by the Board in such manner as may be appropriate in the circumstances and section 60(3) of the [1910 c. 8.] Finance (1909-10) Act 1910 (right of appeal) shall apply to any question of apportionment under this sub-paragraph as it applies to a question of the value of any land.

The Land Commission shall afford to the Board all such information as they may require for the purpose of arriving at an apportionment under this sub-paragraph.

(6) In this paragraph

• " chargeable interest " has the meaning given by paragraph 2(1) of Schedule 5 to the Land Commission Act 1967 ;

• " successor ", in relation to any person, means his successor in title, not being a person who derives title under a disposition for valuable consideration.

(7) This paragraph shall apply in relation to any chargeable act or event before, as well as after, the passing of this Act.

(8) This paragraph shall be construed as one with the [1894 c. 30.] Finance Act 1894.