HC Deb 23 April 2002 vol 384 cc291-5

Resolved,

That the following provisions shall have effect for the period beginning with 24th April 2002 and ending 31 days after the earliest of the dates mentioned in section 50(2) of the Finance Act 1973—

(1) Paragraph (2) of this Resolution shall apply where—

  1. (a) an instrument ("the relevant instrument") transferring land in the United Kingdom from one company to another company ("the acquiring company") has been stamped on the basis that relief under section 76 of the Finance Act 1986 ("section 76 relief") applies,
  2. (b) before the end of the period of two years beginning with the date on which the instrument was executed control of the acquiring company changes, and
  3. (c) at the time control of that company changes the acquiring company holds an estate or interest in land—
    1. (i) that was transferred to it by the relevant instrument, or
    2. (ii) that is derived from an estate or interest so transferred,
and that was not subsequently transferred to it by a duly stamped instrument on which ad valorem duty was paid and in relation to which section 76 relief was not claimed.

(2) In those circumstances—

  1. (a) section 76 relief in relation to the relevant instrument, or an appropriate proportion of it, is withdrawn, and
  2. (b) the additional stamp duty that would have been payable on stamping the relevant instrument but for section 76 relief if the estate or interest in land transferred by that instrument had been transferred at market value, or an 292 appropriate proportion of that additional duty, is payable by the acquiring company within 30 days after control of that company changes.
(3) In paragraph (2) of this Resolution "an appropriate proportion" means an appropriate proportion having regard to what was transferred by the relevant instrument and what the acquiring company holds at the time control of it changes.

(4) In this Resolution—

  1. (a) references to the transfer of land include the grant or surrender of an estate or interest in or over land;
  2. (b) "control" shall be construed in accordance with section 416 of the Income and Corporation Taxes Act 1988; and
  3. (c) references to control of a company changing are to the company becoming controlled—
    1. (i) by a different person,
    2. (ii) by a different number of persons, or
    3. (iii) by two or more persons at least one of whom is not the person, or one of the persons, by whom the company was previously controlled.
(5) Where the relevant instrument transfers land in the United Kingdom together with other property, the provisions of this Resolution apply as if there were two separate instruments, one relating to land in the United Kingdom and the other relating to other property.

(6) Paragraph (2) of this Resolution does not apply by reason of control of the acquiring company changing as a result of any of the transactions listed in the Schedule to the Stamp Duty (Exempt Instruments) Regulations 1987.

(7) Paragraph (2) of this Resolution does not apply by reason of control of the acquiring company changing as a result of a transfer of shares ("the intra-group transfer") in relation to which group relief applies.

(8) For this purpose—

  1. (a) "group relief" means relief under section 42 of the Finance Act 1930 or section 11 of the Finance Act (Northern Ireland) 1954; and
  2. (b) references to a transfer in relation to which group relief applies are to a transfer such that an instrument effecting the transfer is exempt from stamp duty by virtue of either of the group relief provisions.
(9) But if before the end of the period of two years beginning with the date on which the relevant instrument was executed—
  1. (a) a company ("company B") holding shares in the acquiring company to which the intra-group share transfer related, or that are derived from shares to which that instrument related, ceases to be a member of the same group as the company referred to in section 76 as the target company ("company C"), and
  2. (b) the acquiring company, at that time, holds an estate or interest in land—
    1. (i) that was transferred to it by the relevant instrument, or
    2. (ii) that is derived from an estate or interest so transferred,
and that was not subsequently transferred to it by a duly stamped instrument on which ad valorem duty was paid and in relation to which section 76 relief was not claimed,

the following provisions apply.

(10) In those circumstances—

  1. (a) section 76 relief in relation to the relevant instrument (or an appropriate proportion of that relief) is withdrawn, and
  2. (b) the additional stamp duty that would have been paid on stamping the relevant instrument but for that relief if the land in question had been transferred by that instrument at market value, or an appropriate proportion of that 293 amount, is payable by the acquiring company within 30 days after company B ceases to be a member of the same group as company C.
(11) In paragraphs (7) to (10) of this Resolution—
  1. (a) "company" includes any body corporate; and
  2. (b) references to a company being in the same group as another company are to the companies being associated bodies corporate within the meaning of the relevant group relief provision.
(12) Paragraph (2) of this Resolution does not apply by reason of control of the acquiring company changing as a result of a transfer of shares ("the exempt transfer") to another company ("the parent company") in relation to which share acquisition relief applies.

(13) For this purpose—

  1. (a) "share acquisition relief" means relief under section 77 of the Finance Act 1986; and
  2. (b) references to a transfer in relation to which such relief applies are to a transfer such that an instrument effecting the transfer is exempt from stamp duty by virtue of that provision.
(14) But if before the end of the period of two years beginning with the date on which the relevant instrument was executed—
  1. (a) control of the parent company changes at a time when that company holds any shares transferred to it by the exempt transfer, or any shares derived from shares so transferred, and
  2. (b) the acquiring company, at that time, holds an estate or interest in land—
    1. (i) that was transferred to it by the relevant instrument, or
    2. (ii) that is derived from an estate or interest so transferred,
and that was not subsequently transferred to it by a duly stamped instrument on which ad valorem duty was paid and in relation to which section 76 relief was not claimed,

the following provisions apply.

(15) In those circumstances—

  1. (a) section 76 relief in relation to the relevant instrument (or an appropriate proportion of that relief) is withdrawn, and
  2. (b) the additional stamp duty that would have been paid on stamping the relevant instrument but for that relief if the land in question had been transferred by that instrument at market value, or an appropriate proportion of that additional duty, is payable by the acquiring company within 30 days after control of the parent company changed.
(16) Where an amount of duty is payable under this Resolution, interest on that amount is payable as from the end of the period of 30 days from the day on which the relevant instrument was executed.

(17) The provisions of section 15A(3) to (5) of the Stamp Act 1891 apply in relation to interest under paragraph (16) of this Resolution.

(18) The acquiring company shall, within the period of 30 days within which payment is to be made, notify the Commissioners of—

  1. (a) the date on which the event occurred by reason of which it is liable to make a payment of duty under this Resolution,
  2. (b) the relevant land held by it at that time,
  3. (c) the nature of the relevant instrument, the date on which it was executed, the parties to the instrument and the date on which the instrument was stamped,
  4. (d) the market value of the land transferred to it by the relevant instrument at the date on which that instrument was executed, and
    5. 294
  5. (e) the amount of duty and interest payable by it.
(19) In paragraph (18)(b) of this Resolution the "relevant land" held by the acquiring company means every estate or interest in relation to which paragraph (1)(c) of this Resolution applies.

(20) Section 98 of the Taxes Management Act 1970 shall have effect as if a reference to paragraph (18) of this Resolution were inserted in the second column of the Table in subsection (5) of that section.

(21) The provisions of regulations under section 98 of the Finance Act 1986, and the provisions of the Taxes Management Act 1970 applied by those regulations, have effect with the necessary modifications in relation to—

  1. (a) the determination by the Commissioners of the duty payable under this Resolution or the interest payable thereon,
  2. (b) appeals against any such determination, and
  3. (c) the collection and recovery of any such duty or interest, as if it were an amount of stamp duty reserve tax.
(22) This paragraph applies where—
  1. (a) an amount is payable under this Resolution by the acquiring company,
  2. (b) a notice of determination of the amount payable has been issued by the Inland Revenue, and
  3. (c) the whole or part of that amount is unpaid six months after the date on which it became payable.
(23) The following persons may, by notice under paragraph (26) of this Resolution, be required to pay the unpaid amount—
  1. (a) any company that at any relevant time was a member of the same group as the acquiring company, and
  2. (b) any person who at any relevant time was a controlling director of the acquiring company or of a company having control of the acquiring company.
(24) For this purpose a "relevant time" means any time between the execution of the relevant instrument and the change of control by virtue of which the liability to pay the amount arises.

(25) In paragraph (23) of this Resolution—

  1. (a) references to companies being in the same group are to one company having control of the other or both companies being under the control of the same person or persons;
  2. (b) "director", in relation to a company, has the meaning given by section 168(8) of the Income and Corporation Taxes Act 1988 (read with subsection (9) of that section) and includes any person falling within section 417(5) of that Act (read with subsection (6) of that section); and
  3. (c) "controlling director", in relation to a company, means a director of the company who has control of it.
(26) The Commissioners may serve a notice on a person within paragraph (23) of this Resolution requiring him, within 30 days of the service of the notice, to pay the amount that remains unpaid.

(27) Any such notice must be served before the end of the period of three years beginning with the date on which the notice of determination mentioned in paragraph (22)(b) is issued.

(28) The notice must state the amount required to be paid by the person on whom the notice is served.

(29) The notice has effect—

  1. (a) for the purposes of the recovery from that person of the amount required to be paid and of interest on that amount, and
  2. (b) for the purposes of appeals,
as if it were a notice of determination and that amount were an amount of stamp duty reserve tax due from that person.

(30) A person who has paid an amount in pursuance of a notice under paragraph (26) of this Resolution may recover that amount from the acquiring company.

(31) A payment in pursuance of such a notice is not allowed as a deduction in computing any income, profits or losses for any tax purposes.

(32) The Commissioners may by notice require any person to furnish them within such time, not being less than 30 days, as may be specified in the notice with such information (including documents or records) as the Commissioners may reasonably require for the purposes of this Resolution.

(33) A barrister or solicitor shall not be obliged in pursuance of a notice under paragraph (32) of this Resolution to disclose, without his client's consent, any information with respect to which a claim to professional privilege could be maintained.

(34) Section 98 of the Taxes Management Act 1970 shall have effect as if a reference to paragraph (32) of this Resolution were inserted in the first column of the Table in subsection (5) of that section.

(35) This Resolution shall be construed as one with the Stamp Act 1891.

(36) This Resolution shall apply where the relevant instrument is executed after 23rd April 2002.

(37) But this Resolution does not apply to an instrument giving effect to a contract made on or before 17th April 2002, unless—

  1. (a) the instrument is made in consequence of the exercise after that date of any option, right of pre-emption or similar right, or
  2. (b) the instrument transfers the property in question to, or vests it in, a person other than the purchaser under the contract because of an assignment (or, in Scotland, assignation) or further contract made after that date.
(38) This Resolution shall come into force on 24th April 2002.

And it is hereby declared that it is expedient in the public interest that this Resolution should have statutory effect under the provisions of section 50 of the Finance Act 1973.