Finance Act 2013

Reliefs U.K.

132 Effect of reliefs under sections 133 to 150 U.K.

(1) Subsection (2) applies where tax is charged, in respect of a single-dwelling interest, for a chargeable period that includes one or more days that are relievable as a result of any of the provisions listed in subsection (3) (or for more than one such period).

(2) For any such period, the adjusted chargeable amount is to be calculated on the basis that the chargeable person is not within the charge with respect to the interest on any relievable day.

(3) The provisions are—

• section 133 (property rental businesses);

• section 134 (rental property: preparation for sale etc);

• section 137 (dwellings opened to the public);

• section 138 (property developers);

• section 139 (property developers: exchange of dwellings);

• section 141 (property traders);

• section 143 (financial institutions acquiring dwellings in the course of lending);

• [F1 section 144A (regulated home reversion plans);]

• section 145 (occupation by [F2 employees or partners of a qualifying trade or property rental business] );

• [F3 section 147A (caretaker flat owned by management company);]

• section 148 (farmhouses);

• section 150 (providers of social housing).

(4) See also section 106 (adjustment of amount chargeable and claim for relief).

Textual Amendments

F1 Words in s. 132(3) inserted (15.9.2016) (with effect in accordance with s. 134(7) of the amending Act) by Finance Act 2016 (c. 24), s. 134(5)

F2 Words in s. 132(3) substituted (15.9.2016) (with effect in accordance with s. 135(12) of the amending Act) by Finance Act 2016 (c. 24), s. 135(10)(a)

F3 Words in s. 132(3) inserted (15.9.2016) (with effect in accordance with s. 135(12) of the amending Act) by Finance Act 2016 (c. 24), s. 135(10)(b)

133 Property rental businesses U.K.

(1) A day in a chargeable period is relievable in relation to a single-dwelling interest if on that day the interest—

(a) is being exploited as a source of rents or other receipts (other than excluded rents) in the course of a qualifying property rental business carried on by a person entitled to the interest, or

(b) steps are being taken to secure that the interest will, without undue delay, be so exploited in the course of a qualifying property rental business that is being carried on, or is to be carried on, by a person entitled to the interest.

(2) A day is not relievable by virtue of subsection (1) or section 134 in the case of a single-dwelling interest if on that day a non-qualifying individual is permitted to occupy the dwelling.

(3) In this Part “qualifying property rental business” means a property rental business that is run on a commercial basis and with a view to profit.

(4) A business is a “property rental business” for the purposes of subsection (3) if it is a property business as defined in Chapter 2 of Part 4 of CTA 2009, but—

(a) the question whether or not a business is a property rental business for the purposes of subsection (3) is determined without reference to whether or not any profits of the business are chargeable to corporation tax (and section 204(2) of CTA 2009 is therefore disregarded), and

(b) for the purposes of this subsection the “rents or other receipts” referred to in section 207(1) of CTA 2009 are taken not to include excluded rents

(5) In subsection (1)(b) “without undue delay” means without delay except so far as delay is justified by commercial considerations or cannot be avoided.

(6) In this Part “excluded rents” means rents within any of classes 2 to 6 in the table in section 605(2) of CTA 2010.

134 Rental property: preparation for sale, demolition etc U.K.

(1) A day (“day X”) on which a person (“P”) is entitled to a single-dwelling interest is relievable in relation to that interest if—

(a) on day X the dwelling is unoccupied and any of the first to fourth conditions is met (see below),

(b) day X is preceded by one or more days (“qualifying days”) that are relievable under section 133 in relation to the interest and on which P, or a relevant partner, was entitled to the interest, and

(c) the days (if any) between day X and the last of the qualifying days to precede day X are all relievable under this section.

• First condition The first condition is that steps are being taken to secure that the interest will be sold without undue delay.

• Second condition The second condition is that—

  (a)

  steps are being taken to secure that the dwelling will be demolished without undue delay, and

  (b)

  if it is intended that a new dwelling will be constructed on the site of the existing dwelling, the intention is that it will be used in a relievable way.

• Third condition The third condition is that—

  (a)

  steps are being taken to secure that the dwelling will be converted into a different dwelling without undue delay, and

  (b)

  it is intended that the new dwelling will be used in a relievable way.

• Fourth condition The fourth condition is that steps are being taken to secure that the dwelling will be converted into a building other than a dwelling without undue delay.

(2) A dwelling is “used in a relievable way” for the purposes of subsection (1) if the single-dwelling interest in question is exploited in such a way, or held in such a way and for such purposes, (or, as the case requires, the dwelling itself is exploited or used in such a way) that a day of such exploitation, ownership or use would be relievable under any of sections 133, 137, 145 and 148.

(3) In this section—

• “relevant partner”, where P is (on day X) entitled to the interest as a member of a partnership, means a person who was at the time in question carrying on the qualifying rental property business concerned as a member of that partnership;

• “without undue delay” means without delay, except so far as delay is justified by commercial considerations or cannot be avoided.

135 Non-qualifying occupation: look-forward and look-back U.K.

(1) Subsection (2) applies if on a day in a chargeable period (“the day of non-qualifying occupation”)—

(a) a single-dwelling interest to which a person (“the landlord”) is entitled is being exploited as mentioned in section 133(1)(a), or steps are being taken to secure that the interest will be so exploited, as mentioned in section 133(1)(b), and

(b) a non-qualifying individual is permitted to occupy the dwelling.

(2) No subsequent day in that chargeable period, or in any of the subsequent 3 chargeable periods, that meets the continuity of ownership condition and would (in the absence of this subsection) be relievable by virtue of section 133(1)(b) is treated as relievable by virtue of that provision unless a day of qualifying use falls between that day and the day of non-qualifying occupation.

(3) A day meets the continuity of ownership condition if on that day—

(a) the landlord is entitled to the single-dwelling interest, or

(b) if the landlord carried on or (as the case requires) intended to carry on the property rental business in partnership, another member of the partnership is entitled to the interest.

(4) Subsection (5) applies if a person who is a non-qualifying individual in relation to a single-dwelling interest occupies the dwelling on a day in a chargeable period (“the day of non-qualifying occupation”).

(5) An earlier day in that or the preceding chargeable period (“the earlier day”) is not relievable by virtue of section 133(1)(b) or 134 if a relevant person is entitled to the single-dwelling interest on that day.

(6) In subsection (5) “relevant person” means—

(a) a person who is entitled to the single-dwelling interest on the day of non-qualifying occupation, or

(b) if a person falling within paragraph (a) is or has been a member of a partnership whose members have at any time exploited the single-dwelling interest as a source of rents and receipts in a property rental business, any other member of that partnership.

(7) Subsection (5) does not apply in relation to the earlier day if a day that is relievable by virtue of section 133(1)(a) falls between that earlier day and the day of non-qualifying occupation.

(8) For the purposes of this section—

(a) “day of qualifying use”, in relation to a single-dwelling interest, means a day that is relievable in the case of the interest by virtue of section 133(1)(a);

(b) occupation of any part of a dwelling is regarded as occupation of the dwelling.

136 Meaning of “non-qualifying individual” U.K.

(1) In sections 133 and 135 “non-qualifying individual”, in relation to a single-dwelling interest, means any of the following—

(a) an individual who is entitled to the interest (otherwise than as a member of a partnership),

(b) an individual (“a connected person”) who is connected with a person entitled to the interest,

(c) if a person is entitled to the interest as a member of a partnership, an individual who is, or is connected with, a qualifying member of that partnership,

(d) an individual (“a relevant settlor”) who is the settlor in relation to a settlement of which a trustee is (in the capacity of trustee) connected with a person who is entitled to the interest,

(e) the spouse or civil partner of a connected person or of a relevant settlor,

(f) a relative of a connected person or of a relevant settlor, or the spouse or civil partner of a relative of a connected person or of a relevant settlor,

(g) a relative of the spouse or civil partner of a connected person or of a relevant settlor,

(h) the spouse or civil partner of a person falling within paragraph (g), or

(i) an individual who is a major participant in a relevant collective investment scheme or is connected with a major participant in a relevant collective investment scheme.

(2) In subsection (1)(c) “qualifying member”, in relation to a partnership, means a member of the partnership who is entitled to a 50% or greater share—

(a) in the income profits of the partnership, or

(b) in the partnership's assets.

(3) In subsection (1)(i) “relevant collective investment scheme”, in relation to a single-dwelling interest, means a collective investment scheme that meets the ownership condition with respect to the interest.

(4) A person who participates in a collective investment scheme is a “major participant” in the scheme if the person—

(a) is entitled to a share of at least 50% either of all the profits or income arising from the scheme or of any profits or income arising from the scheme that may be distributed to participants, or

(b) would in the event of the winding up of the scheme be entitled to 50% or more of the assets of the scheme that would then be available for distribution among the participants.

(5) The reference in subsection (4)(a) to profits or income arising from the scheme is to profits or income arising from the acquisition, holding, management or disposal of the property subject to the scheme.

(6) For the purposes of subsection (1), section 1122 of CTA 2010 (as applied by section 172) has effect as if subsections (7) and (8) of that section (application of rules about connected persons to partnerships) were omitted.

(7) In this section—

• “relative” means brother, sister, ancestor or lineal descendant;

• “settlement” and “settlor” have the same meaning as in Chapter 5 of Part 5 of ITTOIA 2005 (see section 620 of that Act).

(8) In subsection (1)(d) “trustee” is to be read in accordance with section 1123(3) of CTA 2010 (“connected persons”: supplementary).

137 Dwellings opened to the public U.K.

(1) A day in a chargeable period is relievable in relation to a single-dwelling interest if the first or second condition is met on that day.

(2) The first condition is that the dwelling is being exploited as a source of income in the course of a qualifying trade in the normal course of which the public are offered the opportunity to make use of, stay in or otherwise enjoy the dwelling as customers of the trade on least 28 days in any year.

(3) The second condition is that steps are being taken to secure—

(a) that the dwelling will (in that or a future chargeable period) be exploited as a source of income in the course of a qualifying trade such as is mentioned in subsection (2), and

(b) that it will be so exploited without delay, except so far as delay is justified by commercial considerations or cannot otherwise be avoided.

(4) In this section “qualifying trade” means a trade carried on on a commercial basis and with a view to profit.

(5) For the purposes of this section persons are not taken to have an opportunity to make use of, stay in or otherwise enjoy a dwelling unless the areas that they are permitted to make use of, stay in or otherwise enjoy include a significant part of the interior of the dwelling.

(6) The size (relative to the size of the whole dwelling), nature, and function of the area or areas concerned are to be taken into account in determining whether they form a significant part of the interior of the dwelling.

138 Property developers U.K.

(1) A day in a chargeable period is relievable in relation to a single-dwelling interest if on that day—

(a) a person carrying on a property development trade (“the property developer”) is entitled to the interest, and

(b) the interest is held exclusively for the purpose of developing and reselling the land in the course of the trade.

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

(3) A day is not relievable by virtue of subsection (1) if on the day a non-qualifying individual is permitted to occupy the dwelling.

(4) In this Part “property development trade” means a trade that—

(a) consists of or includes buying and developing for resale residential or non-residential property, and

(b) is run on a commercial basis and with a view to profit.

(5) In this section references to development include redevelopment.

139 Property developers: exchange of dwellings U.K.

(1) A day in a chargeable period is relievable in relation to a single-dwelling interest if—

(a) a person (“the property developer”) is on that day entitled to a single-dwelling interest (“the returned interest”) that was acquired (by the relevant person) in the course of a property development trade, and

(b) that acquisition (“the reverse acquisition”) was part of a qualifying exchange.

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

(3) In this section “the relevant person” means—

(a) if the property developer is entitled to the returned interest as a member of a partnership, the persons who acquired the interest as members of the partnership, or

(b) otherwise, the property developer (and any person who acquired the returned interest jointly with the property developer).

(4) The reverse acquisition is “part of a qualifying exchange” only if—

(a) it was made by way of transfer,

(b) the person from whom the acquisition was made itself acquired (by way of grant or transfer) a chargeable interest in or over a new dwelling from the relevant person, and

(c) each of those acquisitions was entered into in consideration of the other.

(5) A building or part of a building is a “new dwelling” if—

(a) it has been constructed for use as a single dwelling and has not previously been occupied, or

(b) it has been adapted for use as a single dwelling and has not been occupied since its adaptation.

140 Property developers: supplementary U.K.

(1) Subsection (2) applies if on a day in a chargeable period—

(a) a person carrying on a property development trade (“the property developer”) is entitled to a single-dwelling interest that has been acquired in the course of that trade (whether or not the acquisition was part of a qualifying exchange for the purposes of section 139), and

(b) a non-qualifying individual is permitted to occupy the dwelling.

(2) No subsequent day is relievable in the case of the single-dwelling interest by virtue of section 138(1) or 139(1) if—

(a) the day falls within that chargeable period, or any of the subsequent 3 chargeable periods, and

(b) there is continuity of ownership on that day.

(3) There is “continuity of ownership” on any day on which—

(a) the property developer is entitled to the single-dwelling interest, or

(b) if the property developer carried on the property development trade in partnership, another member of the partnership is entitled to the interest.

(4) Subsection (5) applies if—

(a) on a day in a chargeable period (“the day of non-qualifying occupation”) a person who is a non-qualifying individual in relation to a single-dwelling interest is occupying the dwelling in question, and

(b) on an earlier day in that, or the preceding, chargeable period (“the earlier day”) the conditions in section 138(1)(a) and (b) are met in relation to the same single-dwelling interest.

(5) The earlier day is not relievable by virtue of section 138(1) in the case of the single-dwelling interest if—

(a) a person who is entitled to the interest on the earlier day is also entitled to it on the day of non-qualifying occupation, or

(b) if the trade mentioned in section 138(1) is carried on in partnership, a person who has at any time carried that business on in partnership is entitled to the interest on the day of non-qualifying occupation.

(6) Subsection (7) applies if—

(a) on a day in a chargeable period (“the day of non-qualifying occupation”) a person who is a non-qualifying individual in relation to a single-dwelling interest is occupying the dwelling in question, and

(b) on an earlier day in that, or the preceding, chargeable period (“the earlier day”) the conditions in section 139(1)(a) and (b) are met in relation to the same single-dwelling interest.

(7) The earlier day is not relievable by virtue of section 139(1) in the case of the single-dwelling interest if—

(a) a person who is entitled to the interest on the earlier day is also entitled to it on the day of non-qualifying occupation, or

(b) where the trade mentioned in section 139(1) is carried on in partnership, a person who has at any time carried that trade on in partnership is entitled to the interest on the day of non-qualifying occupation.

(8) If a day that is relievable by virtue of section 133(1)(a) falls between the earlier day mentioned in subsection (5) or (as the case may be) (7) and the day of non-qualifying occupation, that subsection does not apply in relation to that earlier day.

(9) For the purposes of sections 138 and 139 and this section—

(a) “non-qualifying individual” has the meaning given by section 136(1);

(b) occupation of any part of a dwelling is regarded as occupation of the dwelling.

141 Property traders U.K.

(1) A day in a chargeable period is relievable in relation to a single-dwelling interest if on that day—

(a) a person carrying on a property trading business is entitled to the interest, and

(b) the interest is held as stock of the business and for the sole purpose of resale in the course of the business.

(2) A single-dwelling interest in a dwelling is taken not to be held for the sole purpose of resale in the course of a property trading business at any time when a non-qualifying individual is permitted to occupy the dwelling.

(3) In this Part “property trading business” means a business that—

(a) consists of or includes activities in the nature of a trade of buying and selling dwellings, and

(b) is carried on on a commercial basis and with a view to profit.

142 Property traders: supplementary U.K.

(1) Subsection (2) applies if on a day in a chargeable period (“the day of non-qualifying occupation”)—

(a) a person carrying on a property trading business (“the property trader”) is entitled to a single-dwelling interest that is held as mentioned in section 141(1)(b), and

(b) a non-qualifying individual is permitted to occupy the dwelling.

(2) No subsequent day is relievable in the case of the single-dwelling interest by virtue of section 141(1) if—

(a) the day falls within that chargeable period, or any of the subsequent 3 chargeable periods, and

(b) the property trader or a relevant partner is entitled to the interest on that day.

(3) If on the day of non-qualifying occupation mentioned in subsection (1) the property trader carries on the property trading business in partnership, “relevant partner” means any other person who is, at any time, a member of that partnership.

(4) Subsection (5) applies if—

(a) on a day in a chargeable period (“the day of non-qualifying occupation”) a person who is a non-qualifying individual in relation to a single-dwelling interest is occupying the dwelling in question, and

(b) on an earlier day in that, or the preceding, chargeable period (“the earlier day”) the conditions in section 141(1)(a) and (b) are met in relation to the same single-dwelling interest.

(5) The earlier day is not relievable by virtue of section 141(1) in the case of the single-dwelling interest if—

(a) a person who is entitled to the interest on the earlier day is also entitled to it on the day of non-qualifying occupation, or

(b) if the business mentioned in section 141(1) is carried on in partnership, a person who has at any time carried that business on in partnership is entitled to the interest on the day of non-qualifying occupation.

(6) Subsection (5) does not apply in relation to the earlier day if a day that is relievable by virtue of section 133(1)(a) falls between the earlier day and the day of non-qualifying occupation.

(7) For the purposes of this section and section 141—

(a) “non-qualifying individual” has the meaning given by section 136(1);

(b) occupation of any part of a dwelling is regarded as occupation of the dwelling.

143 Financial institutions acquiring dwellings in the course of lending U.K.

(1) A day in a chargeable period is relievable in relation to a single-dwelling interest if matters stand as follows on that day—

(a) a financial institution carrying on a business that involves the lending of money is entitled to the interest,

(b) the financial institution has acquired the interest in the course of that business and in connection with those lending activities, and

(c) the interest is held with the intention that it will be sold in the course of that business without delay (except so far as delay is justified by commercial considerations or cannot be avoided).

(2) A single-dwelling interest in a dwelling is taken not to be held with the intention mentioned in subsection (1)(c) at any time when a non-qualifying individual is permitted to occupy the dwelling.

(3) In this Part (except where otherwise stated) “financial institution” has the meaning given by section 564B of ITA 2007; but for this purpose section 564B(1) is to be read as if paragraph (d) of that subsection were omitted.

144 Section 143: supplementary U.K.

(1) Subsection (2) applies if on a day in a chargeable period—

(a) a financial institution that carries on a business involving the lending of money is entitled to a single-dwelling interest that has been acquired by it as mentioned in section 143(1)(b), and

(b) a non-qualifying individual is permitted to occupy the dwelling.

(2) No subsequent day is relievable in the case of the single-dwelling interest by virtue of section 143(1) if—

(a) the day falls within that chargeable period, or any of the subsequent 3 chargeable periods, and

(b) there is continuity of ownership on that day.

(3) There is continuity of ownership on a day on which—

(a) the financial institution is entitled to the single-dwelling interest, or

(b) if the financial institution carried on the business mentioned in subsection (1)(a) in partnership, another member of the partnership is entitled to the interest.

(4) Subsection (5) applies if—

(a) on a day in a chargeable period (“the day of non-qualifying occupation”) a person who is a non-qualifying individual in relation to a single-dwelling interest is occupying the dwelling in question, and

(b) on an earlier day in that, or the preceding, chargeable period (“the earlier day”) the conditions in section 143(1)(a) to (c) are met in relation to the same single-dwelling interest.

(5) The earlier day is not relievable by virtue of section 143(1) in the case of the single-dwelling interest if—

(a) a person who is entitled to the interest on the earlier day is also entitled to it on the day of non-qualifying occupation, or

(b) if the business mentioned in section 143(1) is carried on in partnership, a person who has at any time carried that business on in partnership is entitled to the interest on the day of non-qualifying ownership.

(6) Subsection (5) does not apply in relation to the earlier day if a day that is relievable by virtue of section 133(1)(a) falls between the earlier day and the day of non-qualifying occupation.

(7) For the purposes of this section and section 143—

(a) “non-qualifying individual” has the meaning given by section 136(1);

(b) occupation of any part of a dwelling is regarded as occupation of the dwelling.

[F4 144A Regulated home reversion plans U.K.

(1) A day in a chargeable period is relievable in relation to a single dwelling interest held by a person (“P”) who is an authorised plan provider if—

(a) P has, as plan provider, entered into a regulated home reversion plan relating to the single dwelling interest, and

(b) the occupation condition is met on that day.

(2) If no qualifying termination event has occurred, the “occupation condition” is that a person who was originally entitled to occupy the dwelling (or any part of it) under the regulated home reversion plan is still entitled to do so.

(3) If a qualifying termination event has occurred, the “occupation condition” is that—

(a) the single dwelling interest is being held with the intention that it will be sold without delay (except so far as delay is justified by commercial considerations or cannot be avoided), and

(b) no non-qualifying individual is permitted to occupy the dwelling (or any part of it).

(4) In this section—

• “authorised plan provider” means a person authorised under the Financial Services and Markets Act 2000 to carry on in the United Kingdom the regulated activity specified in article 63B(1) of the Regulated Activities Order (entering into regulated home reversion plan as plan provider);

• “qualifying termination event” is to be interpreted in accordance with article 63B of the Regulated Activities Order;

• “the Regulated Activities Order” means the Financial Services and Markets (Regulated Activities) Order 2001 (S.I. 2001/544);

• “regulated home reversion plan” means an arrangement which is a regulated home reversion plan for the purposes of Chapter 15A of Part 2 of the Regulated Activities Order (but see also subsection (6)).

(5) In this section references to entering into a regulated home reversion plan “as plan provider” are to be interpreted as if the references were in the Regulated Activities Order (but see also subsection (6)).

(6) For the purposes of this section—

(a) an arrangement which P entered into before 6 April 2007 is treated for the purposes of this section as a regulated home reversion plan entered into by P as plan provider if that arrangement would have been so treated for the purposes of article 63B(1) of the Regulated Activities Order had P entered into that arrangement on the day mentioned in subsection (1);

(b) an arrangement in relation to which P acquired rights or obligations before 6 April 2007 is treated for the purposes of this section as a regulated home reversion plan entered into by P as plan provider if that arrangement would have been so treated for the purposes of article 63B(1) of the Regulated Activities Order had P acquired those rights or obligations on the day mentioned in subsection (1).

(7) Section 136 (meaning of “non-qualifying individual”) applies in relation to this section as in relation to sections 133 and 135.]

Textual Amendments

F4 S. 144A inserted (15.9.2016) (with effect in accordance with s. 134(7) of the amending Act) by Finance Act 2016 (c. 24), s. 134(2)

145 [F5 Occupation by employees or partners of a qualifying trade or property rental business] U.K.

(1) A day in a chargeable period is a relievable if matters stand as follows on that day—

(a) a person (“P”) is entitled to a single-dwelling interest,

(b) P, or a relevant group member, carries on a qualifying trade [F6 or qualifying property rental business] ,

(c) the interest is held for the purpose of making the dwelling available to one or more qualifying employees or qualifying partners for use as living accommodation, and

(d) the dwelling is, or is to be, made available as mentioned in paragraph (c) for purposes that are solely or mainly purposes of the [F7 qualifying trade or qualifying property rental business] .

(2) “Qualifying trade” means a trade that is carried on on a commercial basis and with a view to profit.

(3) In this section references to making a dwelling available to a qualifying employee or qualifying partner include making it available to persons who are to share the accommodation with such an individual as their family.

(4) Where P is a company, “a relevant group member” means a company which is a member of the same group as P for the purposes mentioned in paragraph 1(2) of Schedule 7 to FA 2003 (stamp duty land tax: group relief).

[F8 (5) For the meaning of “qualifying property rental business” see section 133(3).]

Textual Amendments

F5 S. 145 heading substituted (15.9.2016) (with effect in accordance with s. 135(12) of the amending Act) by Finance Act 2016 (c. 24), s. 135(5)

F6 Words in s. 145(1)(b) inserted (15.9.2016) (with effect in accordance with s. 135(12) of the amending Act) by Finance Act 2016 (c. 24), s. 135(3)(a)

F7 Words in s. 145(1)(d) substituted (15.9.2016) (with effect in accordance with s. 135(12) of the amending Act) by Finance Act 2016 (c. 24), s. 135(3)(b)

F8 S. 145(5) inserted (15.9.2016) (with effect in accordance with s. 135(12) of the amending Act) by Finance Act 2016 (c. 24), s. 135(4)

146 Meaning of “qualifying employee” and “qualifying partner” in section 145 U.K.

(1) In a case where the person carrying on the trade [F9 or property rental business] mentioned in section 145(1)(b) carries it on in partnership with one or more other persons, “qualifying partner” means any individual who is a member of the partnership, except one who is entitled to a 10% or greater share—

(a) in the income profits of the partnership, or

(b) in any company that is entitled to the single-dwelling interest mentioned in section 145(1)(a), or

(c) in the partnership's assets.

(2) “Qualifying employee” means any individual employed for the purposes of the qualifying trade [F10 or qualifying property rental business] , except one who—

(a) is entitled to a 10% or greater share—

(i) in the income profits of the trade [F11 or (as the case may be) property rental business] , or

(ii) in any company that is entitled to the single-dwelling interest mentioned in section 145(1)(a), or

(iii) in that single-dwelling interest, or

(b) provides excluded domestic services.

(3) The reference in subsection (2)(b) to an individual who provides excluded domestic services is to an individual the duties of whose employment include the provision of services in connection with the (actual or intended) occupation, by a non-qualifying individual, of the dwelling mentioned in section 145(1)(c) (“the relevant dwelling”), or a linked dwelling.

(4) In subsection (3) “non-qualifying individual” means an individual connected with a person who is entitled to the single-dwelling interest.

(5) The following are “linked” dwellings for the purposes of subsection (3)—

(a) if the conditions in section 116(2) are met in relation to the relevant dwelling and another dwelling, that other dwelling;

(b) a dwelling that is linked to the relevant dwelling, as described in section 117(1).

(6) In this section references to employment include the holding of an office.

(7) For the purposes of subsections (1)(c) and (2)(a)(iii) persons who are entitled to a chargeable interest as beneficial joint tenants (or, in Scotland, as joint owners) are taken to be entitled to the chargeable interest as beneficial tenants in common (or, in Scotland, as owners in common) in equal shares.

Textual Amendments

F9 Words in s. 146(1) inserted (15.9.2016) (with effect in accordance with s. 135(12) of the amending Act) by Finance Act 2016 (c. 24), s. 135(6)(a)

F10 Words in s. 146(2) inserted (15.9.2016) (with effect in accordance with s. 135(12) of the amending Act) by Finance Act 2016 (c. 24), s. 135(6)(b)(i)

F11 Words in s. 146(2)(a)(i) inserted (15.9.2016) (with effect in accordance with s. 135(12) of the amending Act) by Finance Act 2016 (c. 24), s. 135(6)(b)(ii)

147 Meaning of “10% or greater share in a company” U.K.

(1) This section applies for the purposes of section 146.

(2) An individual (“P”) is taken to be entitled to a 10% or greater share in a company (“C”) if P possesses (directly or indirectly) or is entitled to acquire—

(a) 10% or more of the share capital of C,

(b) 10% or more of the issued share capital of C,

(c) 10% or more of the voting power in C,

(d) so much of the issued share capital of C as would, on the assumption that the whole of the income of C were distributed among the participators, entitle P to receive 10% or more of the amount so distributed, or

(e) such rights as would entitle P, in the event of the winding up of C or in any other circumstances, to receive 10% or more of the assets of C which would then be available for distribution among the participators.

(3) Any rights that P or any other person has as a loan creditor are to be disregarded for the purposes of the assumption in subsection (2)(d).

(4) For the purposes of subsection (2) a person is treated as entitled to acquire anything which the person—

(a) is entitled to acquire at a future date, or

(b) will at a future date be entitled to acquire.

(5) If a person—

(a) possesses any rights or powers on behalf of another person (“A”), or

(b) may be required to exercise any rights or powers on A's direction or behalf,

those rights or powers are to be attributed to A.

(6) The following are also to be attributed to a person—

(a) the rights and powers of any company of which the person has, or the person and associates of the person have, control;

(b) the rights and powers of any two or more companies within paragraph (a);

(c) the rights and powers of any associate of the person (or of any two or more associates of the person).

(7) The rights and powers which are to be attributed under subsection (6)—

(a) include those attributed to a company or associate under subsection (5), but

(b) do not include those attributed to an associate under subsection (6).

(8) A person who does not meet the conditions in subsection (2) is nevertheless treated as having a 10% or greater share in a company if the person exercises, is able to exercise or is entitled to acquire, direct or indirect control over the company's affairs.

(9) In this section—

• “associate” has the same meaning as in Part 10 of CTA 2010 (see section 448 of that Act); but for this purpose section 448 is to be read as if the words “or partner” were omitted in subsection (1)(a);

• “control” has the same meaning as in that Part (see section 450 of that Act);

• “loan creditor” has the same meaning as in that Part (see section 453 of that Act);

• “participator” has the same meaning as in that Part (see section 454 of that Act).

Modifications etc. (not altering text)

C1 S. 147 applied by 2003 c. 14, Sch. 4A para. 5E(9) (as inserted (with effect in accordance with Sch. 40 para. 8 of the amending Act) by Finance Act 2013 (c. 29), Sch. 40 para. 2(4))

[F12 147A Caretaker flat owned by management company U.K.

(1) A day in a chargeable period is relievable in relation to a single-dwelling interest if the dwelling in question is a flat in relation to which the conditions in subsection (2) are met.

(2) The conditions are that on that day—

(a) a company (“the management company”) holds the single-dwelling interest for the purpose of making the flat available as caretaker accommodation,

(b) the flat is contained in premises which also contain two or more other flats,

(c) the tenants of at least two of the other flats in the premises are members of the management company,

(d) the management company owns the freehold of the premises, and

(e) the management company is not carrying on a trade or property rental business.

(3) For the purposes of subsection (2), the management company makes a flat available “as caretaker accommodation” if it makes it available to an individual for use as living accommodation in connection with the individual's employment as caretaker of the premises.

(4) In this section “premises” means premises constituting the whole or part of a building.]

Textual Amendments

F12 S. 147A inserted (15.9.2016) (with effect in accordance with s. 135(12) of the amending Act) by Finance Act 2016 (c. 24), s. 135(7)

148 Farmhouses U.K.

(1) This section applies where on a day in a chargeable period—

(a) a dwelling (“the farmhouse”) forms part of land occupied for the purposes of a qualifying trade of farming, and

(b) a person carrying on the trade is entitled to, or connected with a person who is entitled to, a single-dwelling interest in the farmhouse.

(2) That day is relievable in relation to the single-dwelling interest if on that day the farmhouse is occupied—

(a) by a farm worker who occupies it for the purposes of the trade, or

(b) by a former long-serving farm worker, or the surviving spouse or civil partner of a former farm worker.

(3) A trade of farming is a “qualifying trade of farming” only if it is carried on—

(a) on a commercial basis, and

(b) with a view to profit.

(4) In this section—

• “farming” has the same meaning as in the Corporation Tax Acts (see section 1125 of CTA 2010), except that in this section “farming” includes market gardening;

• “market gardening” has the same meaning as in the Corporation Tax Acts (see section 1125(5) of CTA 2010).

149 “Farm worker” and “former long-serving farm worker” U.K.

(1) An individual is a “farm worker” in relation to the qualifying trade of farming mentioned in section 148(1) at any time when the individual has a substantial involvement in—

(a) the day-to-day work of the trade, or

(b) the direction and control of the conduct of the trade.

(2) Where section 148 applies, an individual occupying the farmhouse on the day mentioned in section 148(1) is a “former long-serving farm worker” if the individual had, before that day, been a farm worker in relation to the qualifying trade of farming for—

(a) a qualifying period of 3 or more years, or

(b) qualifying periods together amounting to 3 or more years within a 5 year period.

(3) In subsection (2) “qualifying period” means a period throughout which—

(a) the individual occupied the farmhouse for the purposes of the trade,

(b) the land of which the farmhouse forms part was occupied for the purposes of the trade,

(c) the trade was carried on by—

(i) a person who is entitled to the single-dwelling interest in the farmhouse on the day mentioned in section 148(1), or

(ii) a person connected with such a person, and

(d) a person who is entitled to the single-dwelling interest in the farmhouse on the day mentioned in section 148(1) was entitled to that interest.

(4) A person occupying part of a dwelling is regarded as occupying the dwelling for the purposes of this section and section 148.

150 Providers of social housing [F13 etc] U.K.

(1) A day in a chargeable period is relievable in relation to a single-dwelling interest if on that day—

(a) a profit-making registered provider of social housing (P) is entitled to the interest, and

(b) P's acquisition of the interest (or of any part of the interest) was funded with the assistance of public subsidy.

(2) A day in a chargeable period is relievable in relation to a single-dwelling interest if on that day—

(a) a [F14 qualifying] housing provider F15 ... is entitled to the interest, and

(b) the condition in subsection (3) is met.

(3) The condition mentioned in subsection (2) is that—

(a) the [F16 qualifying] housing provider is controlled by its tenants,

(b) the person from whom the [F16 qualifying] housing provider acquired the interest (or any part of the interest) is a qualifying body, or

(c) the [F16 qualifying] housing provider's acquisition of the interest (or of any part of the interest) was funded with the assistance of a public subsidy.

[F17 (3A) A day in a chargeable period is relievable in relation to a single-dwelling interest if on that day a qualifying housing co-operative (as defined by section 150A) is entitled to the interest.]

(4) In this section—

[F18 (a) subsection (2) of section 71 of FA 2003 applies in relation to a reference to a qualifying housing provider controlled by its tenants as it applies to a reference in that section to a non-profit registered provider of social housing controlled by its tenants;

(b) “qualifying body” means—

(i) anything described as a qualifying body in subsection (3) of that section,

(ii) the Scottish Ministers,

(iii) a council constituted under section 2 of the Local Government etc. (Scotland) Act 1994, or

(iv) Scottish Homes;

(c) “public subsidy” means—

(i) anything that is a public subsidy for the purposes of section 71 of FA 2003, and for the purposes of this section the reference in subsection (5)(a) of that section to “the purchaser” is to be treated as a reference to P or the qualifying housing provider (as the case may be);

(ii) any grant or other financial assistance under section 18 of the Housing Act 1996 (c. 52) (social housing grants);

(iii) any grant or other financial assistance under section 2 of the Housing (Scotland) Act 1988 (c. 43) (general functions of the Scottish Ministers);

(d) “qualifying housing provider” means—

(i) a relevant housing provider (within the meaning of section 71 of FA 2003),

(ii) a body registered as a social landlord in a register maintained under section 1(1) of the Housing Act 1996 (Welsh registered social landlords), or

(iii) a body registered under section 20(1) of the Housing (Scotland) Act 2010 (asp 17) (Scottish registered social landlords).]

Textual Amendments

F13 Word in s. 150 heading inserted (with effect in accordance with s. 90(3)-(6) of the amending Act) by Finance Act 2021 (c. 26), s. 90(1)(b)

F14 Word in s. 150(2)(a) substituted (retrospective to 6.3.2024) by Finance (No. 2) Act 2024 (c. 12), s. 9(13)(a)(i)(14)

F15 Words in s. 150(2)(a) omitted (retrospective to 6.3.2024) by virtue of Finance (No. 2) Act 2024 (c. 12), s. 9(13)(a)(ii)(14)

F16 Word in s. 150(3) substituted (retrospective to 6.3.2024) by Finance (No. 2) Act 2024 (c. 12), s. 9(13)(b)(14)

F17 S. 150(3A) inserted (with effect in accordance with s. 90(3)-(6) of the amending Act) by Finance Act 2021 (c. 26), s. 90(1)(a)

F18 S. 150(4)(a)-(d) substituted for s. 150(4)(a)-(c) (retrospective to 6.3.2024) by Finance (No. 2) Act 2024 (c. 12), s. 9(13)(c)(14)

[F19 150A Meaning of “qualifying housing co-operative” U.K.

(1) A company is a “qualifying housing co-operative” for the purposes of section 150(3A) on any day if on that day—

(a) it is a housing association within the meaning of—

(i) the Housing Associations Act 1985, or

(ii) Part 2 of the Housing (Northern Ireland) Order 1992 (S.I. 1992/1725 (N.I. 15)),

(b) it is a registered society within the meaning of—

(i) the Co-operative and Community Benefit Societies Act 2014, or

(ii) the Co-operative and Community Benefit Societies Act (Northern Ireland) 1969, and

(c) the rules of the association comply with subsection (2).

(2) The rules of the association—

(a) must restrict membership to persons who are tenants, or prospective tenants, of the association,

(b) must preclude the granting or assignment of tenancies to persons other than members,

(c) must prevent members from transferring any of their shares,

(d) must prevent members from receiving any more than the nominal value of their shares on a return of share capital, and

(e) must confer on members equal voting rights.]

Textual Amendments

F19 S. 150A inserted (with effect in accordance with s. 90(3)-(6) of the amending Act) by Finance Act 2021 (c. 26), s. 90(2)