3Cases where first condition not fully met

1

This paragraph applies where—

a

a land transaction is not exempt from charge under paragraph 1 because the first condition in that paragraph is not met, but

b

the purchaser (“C”) intends to hold the greater part of the subject-matter of the transaction for qualifying charitable purposes.

2

In such a case—

a

the transaction is exempt from charge, but

b

for the purposes of paragraph 2 (withdrawal of charities relief) “disqualifying event” includes—

i

any transfer by C of a major interest in the whole or any part of the subject-matter of the transaction, or

ii

any grant by C at a premium of a low-rental lease of the whole or any part of that subject-matter,

that is not made in furtherance of the charitable purposes of C.

3

For the purposes of sub-paragraph (2)(b)(ii)—

a

a lease is granted “at a premium” if there is consideration other than rent, and

b

a lease is a “low-rental”lease if the annual rent (if any) does not exceed £600 a year.

4

In relation to a transaction that, by virtue of this paragraph, is a disqualifying event for the purposes of paragraph 2—

a

the date of the event for those purposes is the effective date of the transaction;

b

paragraph 2 has effect as if—

i

in sub-paragraph (1)(b), for “at the time of” there were substituted “ immediately before ”,

ii

in sub-paragraph (4)(a), for “at the time of” there were substituted “ immediately before and immediately after ”, and

iii

sub-paragraph (4)(b) were omitted.

5

In this paragraph—

• “qualifying charitable purposes” has the same meaning as in paragraph 1;

• “rent” has the same meaning as in Schedule 5 (amount of tax chargeable: rent) and “annual rent” has the same meaning as in paragraph 9(2) of that Schedule.

4Charitable trusts

1

This Schedule applies in relation to a charitable trust as it applies in relation to a charity.

2

In this paragraph “charitable trust” means—

a

a trust of which all the beneficiaries are charities, or

b

a unit trust scheme in which all the unit holders are charities,

and “charity” has the same meaning as in paragraph 1.

3

In this Schedule as it applies by virtue of this paragraph—

a

references to the purchaser in paragraphs (a) and (b) of paragraph 1(2) are to the beneficiaries or unit holders, or any of them;

b

the reference to the purchaser in paragraph 2(3)(a) is to any of the beneficiaries or unit holders;

c

the reference in paragraph 3(2)(b) to the charitable purposes of C is to those of the beneficiaries or unit holders, or any of them.