Finance Act 2013 (FA 2013) introduced a number of provisions which will be of relevance to those in and / or interacting with the commercial property sector. The following is an overview of the new measures and changes. Stamp duty FA 2013 introduced a number of anti-avoidance provisions with respect to stamp duty. In the past, it was possible to avoid or defer stamp duty on land purchases by either leaving the transaction 'resting on contract', by obtaining a building licence from the landowner or by entering into an agreement for a 'long lease' with the landowner. While provisions aimed at targeting these practices had previously been on the statute books, they were subject to a commencement order and were never in fact made effective. The provisions now enacted are similar to those sections originally proposed in 2007. The provisions are as follows: Resting on contract: Where a person contracts to purchase land and does not stamp a conveyance or transfer within 30 days of paying 25% or more of the consideration payable under the contract, then that contract will be stampable with the same duty as if it were a conveyance or transfer of the land. Where stamp duty is paid on the contract, any subsequent conveyance or transfer of the land will not be stampable. In addition, where the contract is rescinded or annulled, a refund of the stamp duty paid on the contract will be available. The position insub-sale situations will need to be considered carefully, in each case. Licence agreements: Where a landowner grants a licence to another person to enter onto and develop a piece of land and the licensee pays licence fees amounting to 25% or more of the market value of the land, the licence agreement must be stamped as if it were a conveyance or transfer of an interest in the land within 30 days of that 25% limit being breached. The licence agreement will be stampable based on the market value of the land in question. Where the licence agreement is rescinded or annulled, a refund of the stamp duty paid on the licence will be available. Agreements for more than 35 years charged as leases: Where a person enters into an agreement for lease for a term exceeding 35 years and pays 25% or more of the consideration payable under that agreement, the agreement will become stampable as if it were an actual lease for the term and consideration stated in the agreement. Any lease granted subsequently will be liable to a nominal duty of12.50. Where the agreement is rescinded or annulled, a refund of the stamp duty paid on the agreement will be available. Provisions which charged stamp...
Finance Act 2013 - Update For Commercial Property Industry
|Author:||Mr Patrick Sweetman, Cara O'Hagan, Ronan McLoughlin, Brian Doran, Aidan Fahy, Shane Hogan, John Kelly and Greg Lockhart|
To continue readingREQUEST YOUR TRIAL