SCHEDULEAmendment of Part 4 of the Finance Act 2003
Stamp Duty Land Tax: partnerships2
1
Schedule 15 to the Finance Act 2003 (stamp duty land tax: partnerships) is amended as follows.
2
In Step Two of paragraph 12(1) (transfer to partnership: how to calculate the “sum of the lower proportions”)3—
a
in paragraph (b) for “or is connected with the relevant owner” substitute “or is an individual connected with the relevant owner”, and
b
at the end add—
(If there is no relevant owner with a corresponding partner, the sum of the lower proportions is nil.)
3
Omit paragraph 13 (transfer of partnership where all partners are companies).
4
In paragraph 14 (transfer of interest in property-investment partnership)—
a
for sub-paragraph (1)(b) substitute—
b
either—
i
the transferee is a person, other than an individual, connected with the transferor, or
ii
consideration is given for the transfer,
b
at the end add—
9
An interest in respect of the transfer to which this paragraph applies shall be treated as a chargeable interest for the purposes of paragraph 3(1) of Schedule 7 to the extent that the relevant partnership property consists of a chargeable interest.
c
in the italic cross-heading omit “for consideration”.
5
In Step Two of paragraph 20(1) (transfer from partnership: how to calculate the “sum of the lower proportions”)—
a
in paragraph (b) for “or was connected with the relevant owner” substitute “or was an individual connected with the relevant owner”, and
b
at the end add—
(If there is no relevant owner with a corresponding partner, the sum of the lower proportions is nil.)
6
After paragraph 27 (application of group relief) insert—
27A
1
This paragraph applies where in calculating the sum of the lower proportions in relation to a transaction (in accordance with paragraph 12)—
a
a company (“the connected company”) would have been a corresponding partner of a relevant owner (“the original owner”) but for the fact that paragraph (b) of Step Two includes connected persons only if they are individuals, and
b
the connected company and the original owner are members of the same group.
2
The charge in respect of the transaction shall be reduced to the amount that would have been payable had the connected company been a corresponding partner of the original owner for the purposes of calculating the sum of the lower proportions.
3
The provisions of Part 1 of Schedule 7 apply to group relief under sub-paragraph (2) above as to group relief under paragraph 1(1) of Schedule 7 but—
a
with the omission of paragraph 2(2)(a),
b
with the substitution for “the purchaser” in paragraph 3(1)(a) of “a partner who was, at the effective date of the transaction, a partner and a member of the same group as the transferor (“the relevant partner”); and
c
with the other modifications specified in paragraph 27(3) to (6) above.
7
This paragraph has effect in relation to any land transaction of which the effective date is, or is after, 6th December 2006 (but see sub-paragraph (8)).
8
This paragraph does not have effect in relation to—
a
any land transaction which is effected in pursuance of a contract entered into and substantially performed before the relevant time, or
b
any other land transaction which is effected in pursuance of a contract entered into before the relevant time and which is not an excluded transaction.
9
For this purpose, a land transaction effected in pursuance of a contract is an excluded transaction if—
a
at or after the relevant time the contract is varied in a way that significantly affects the land transaction (see sub-paragraph (10)),
b
the subject-matter of the land transaction is not identified in the contract in a way that would have enabled its acquisition before the relevant time,
c
rights under the contract are assigned at or after the relevant time,
d
the land transaction is effected in consequence of the exercise, at or after the relevant time, of any option, right of pre-emption or similar right, or
e
at or after the relevant time there is an assignment, sub-sale or other transaction (relating to the whole or part of the contract’s subject-matter) as a result of which a person other than the purchaser under the contract becomes entitled to call for a conveyance to him.
10
For the purposes of sub-section (9)(a) the contract is varied in a way that significantly affects the land transaction if (and only if)—
a
it is varied so as to substitute a different purchaser in relation to the land transaction,
b
it is varied so as to alter the subject-matter of the land transaction, or
c
it is varied so as to alter the consideration for the land transaction.