The Stamp Duty Land Tax (Variation Of The Finance Act 2003) Regulations 2006
Interim guidance on section 75a Finance Act 2003
This note gives guidance on new section 75A Finance Act 2003, inserted by
paragraph 1 of the Schedule to the stamp duty land tax (Variation of the Finance
Act 2003) Regulations 2006 (2006 SI No 3237). It supplements the Technical
Note issued by HM Revenue & Customs on 6 December 2006.
The guidance in this note has been produced in response to enquiries and representations,
as an interim measure to assist taxpayers and their advisers. It should not
be taken as representing HM Revenue & Customs’ settled view, nor
as being of general application. The guidance has effect only for transactions
to which the Regulations apply and not for transactions to which any provisions
of Finance Act 2007 will apply. Revised guidance will be published for transactions
to which any similar provisions of Finance Act 2007 might apply.
HM Revenue & Customs will accept that the 2006 Regulations may be applied
subject to the following guidance:
- A construction contract is not a scheme transaction in relation to a land transaction where the circumstances are such that, by virtue of the decision in Prudential Assurance Co Ltd v IRC [1992] STC 863 (see SDLTM04015), the consideration properly attributable to the construction contract is not part of the chargeable consideration for the land transaction
- The carrying out of works of construction, improvement or repair of a building or other works to enhance the value of land is not a scheme transaction in relation to the purchase of the land provided that the works are not carried out by the vendor or a person connected with the vendor
- The purchase of assets other than land is not a scheme transaction in relation to a land transaction where the provisions of paragraph 4 of Schedule 4 Finance Act 2003 apply to the apportionment of consideration between the purchase of assets and the land transaction.
- A transfer of shares in a company or units in a unit trust which is not preceded by any land transaction in relation to which it might be a scheme transaction is not a scheme transaction in relation to any subsequent land transaction.
- A loan from a person who is not a party to, or connected with a party to, any other scheme transaction to fund the purchase of property is not a scheme transaction in relation to the purchase of the property.
- Where a land transaction qualifies for reconstruction relief or acquisition relief the issue of shares under paragraph 7(2) or 8(2) of Schedule 7 Finance Act 2003 is not a scheme transaction in relation to that land transaction.
- Where the only transactions are the transfer of a number of properties into a partnership by partners none of the transfers is a scheme transaction in relation to any of the other transfers.
- Where the only transactions are the purchase of land and a lease (or leases) of all or part of the land to a person not connected with the purchaser of the land the purchase is not a scheme transaction in relation to the lease(s) and vice versa.
- Land transactions involving separate parcels of land are not scheme transactions in relation to each other
