DEVELOPMENT FOR OWNER'S USE

HC Deb 15 July 1981 vol 8 cc1350-2

Amendment made: No. 178, in page 107, line 7, leave out '1983', and insert '1984'.—[Mr. Peter Rees.]

Sir Graham Page

I beg to move amendment No. 179, in page 107, line 13, after 'person', insert 'a dependent relative or an adult member of his family as defined by section 15(3) of the Development Land Tax Act 1976'. This is an amendment to the clause dealing with the development land tax. In the Development Land Tax Act 1976 there were transitional provisions which gave exemption from the tax to the owner who developed property for his own purpose. But in 1976 it was not only for himself; we included then the case where he developed it for a dependent relative or an adult member of his family who did not happen to be a dependant.

In the present Bill there is, as it were, an extension of that exemption, although in this case it is merely a deferral of tax. But there is a distinction. In this case we have left out the members of the family of the dependant. It is only if he develops the property for his own personal use that he will get the concession of deferral of tax.

The amendment seeks to add the sort of exemption and concession that was given in 1976 for those owning land at that time, and I can see no distinction in principle between the 1976 provisions and those in the Bill.

Mr. Brittan

This point was raised by my right hon. Friend during the "clause stand part" debate in Committee. The reason why I would not advise the House to accept my right hon. Friend's amendment is related to the underlying purpose of the clause, which is to extend to commercial concerns the benefit which at the moment exists for industrial concerns. In principle, the rules for the two reliefs should be kept in line. The industrial relief does not apply to property to be used by a member of the owner's family, and it is for that reason that we think it reasonable that the relief in respect of commercial concerns should be similarly confined.

I hope that my right hon. Friend will feel able to withdraw the amendment.

Amendment negatived.

Mr. Paul Dean (Somerset, North)

I beg to move amendment No. 180, in page 107, line 24, at end insert— '(2) For the purposes of this section a person carrying on a trade who is a lessor of tied premises shall be treated as occupying those premises. This subsection shall be construed in accordance with section 140(2) of the Taxes Act (income tax and corporation tax on tied premises.'.

Mr. Deputy Speaker (Mr. Bernard Weatherill)

With this it will be convenient to take Government amendment No. 249.

Mr. Dean

I declare an interest in this subject and I am grateful to the Brewers Society for drawing my attention to an anomaly which will arise unless an amendment on these lines is accepted.

I am pleased to see Government amendment No. 249, which appears to deal with the same point. If my right hon. and learned Friend can give me an assurance to that effect, I shall be pleased in due course to withdraw my amendment. At this very late hour I shall describe the amendment and the purpose behind it extremely briefly.

Section 19 of the Development Land Tax Act provides that, where a trader carries out a project of material development for the industrial purposes of that trade, liability for development land tax shall be deferred until the interest in the land being developed is disposed of. In his Budget Statement my right hon. and learned Friend the Chancellor of the Exchequer proposed that the deferment of development land tax currently allowed to traders in respect of development for their own industrial use should be extended to commercial and other types of development, but the proposal included a condition that would exclude premises that a brewer had in mind for occupation by a tied tenant.

In the case of brewery-owned licensed premises, this condition would seem to include premises intended to be operated by the company's own employees but to exclude premises that the brewer had in mind for occupation by a tied tenant. The situation would be anomalous and troublesome, in that a firm decision might not be made at the commencement of the project as to which of those two options should be adopted, or unforeseen events might cause a change of plan at any stage.

I am confident that the Government did not intend to draw an artificial distinction of that kind. The purpose of the amendment is to deal with it.

Mr. Brittan

I am happy to assure my hon. Friend that Government amendment No. 249 is designed to deal with the point that he has raised. The only reason why amendment No. 180 was not regarded as acceptable is that it is technically not satisfactory. I hope, therefore, that my hon. Friend will seek to withdraw his amendment and will support the Government amendment.

Mr. Dean

I am grateful to my right hon. and learned Friend for completely meeting the point that I put to him, and I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Amendment made: No. 249, in page 107, line 34, at end insert— '(2A) Where on the grant of a lease of any premises the premises become tied premises—

1. (a) if the grant of the lease would not otherwise be a disposal falling within subsection (2) above, it shall be deemed to be so;
2. (b) whether or not any other person is actually in occupation of the premises, the lessor shall be treated for the purposes of this section as if he himself occupies the premises during any period during which the premises are tied premises; and
3. (c) if at any time during the lease the premises cease to be tied premises and are not from that time occupied by the lessor, the relevant interest, or if subsection (1)(b) above applies to part only of the building or other land so much of the relevant interest as subsists in that part, shall be treated for the purposes only of subsection (1) above and section 27 below as having been disposed of at that time;

and for the purposes of this section premises subject to a lease are tied premises if they are tied premises within the meaning of section 140(2) of the Taxes Act in relation to the lessor and to a trade carried on by him.'.—[Mr. Brittan.]