Paragraph 3 F1

United Kingdom

(1)

This paragraph applies where—

(a)

a land transaction is not exempt from charge under paragraph 1 because the first condition in that paragraph is not met, but

(b)

the purchaser (“C”) intends to hold the greater part of the subject-matter of the transaction for qualifying charitable purposes.

(2)

In such a case—

(a)

the transaction is exempt from charge, but

(b)

for the purposes of paragraph 2 (withdrawal of charities relief) “disqualifying event” includes—

(i)

any transfer by C of a major interest in the whole or any part of the subject-matter of the transaction, or

(ii)

any grant by C at a premium of a low-rental lease of the whole or any part of that subject-matter,

that is not made in furtherance of the charitable purposes of C.

(3)

For the purposes of sub-paragraph (2)(b)(ii)—

(a)

a lease is granted “at a premium” if there is consideration other than rent, and

(b)

a lease is a “low-rental”lease if the annual rent (if any) F2is less than £1,000 a year.

(4)

In relation to a transaction that, by virtue of this paragraph, is a disqualifying event for the purposes of paragraph 2—

(a)

the date of the event for those purposes is the effective date of the transaction;

(b)

paragraph 2 has effect as if—

(i)

in sub-paragraph (1)(b), for “at the time of” there were substituted “ immediately before ”,

(ii)

in sub-paragraph (4)(a), for “at the time of” there were substituted “ immediately before and immediately after ”, and

(iii)

sub-paragraph (4)(b) were omitted.

(5)

In this paragraph—

“qualifying charitable purposes” has the same meaning as in paragraph 1;
“rent” has the same meaning as in Schedule 5 (amount of tax chargeable: rent) and “annual rent” has the same meaning as in paragraph F39A of that Schedule.

Annotations

F1: Sch. 8 para. 3 and cross-heading inserted (with effect in accordance with s. 302(7) of the amending Act) by Finance Act 2004 (c. 12), s. 302(1)
F2: Words in Sch. 8 para. 3(3)(b) substituted (with effect in accordance with s. 95(13) of the amending Act) by Finance Act 2008 (c. 9), s. 95(7)(a)
F3: Word in Sch. 8 para. 3(5) substituted (with effect in accordance with s. 95(13) of the amending Act) by Finance Act 2008 (c. 9), s. 95(7)(b)