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Section 74 Exercise of collective rights by tenants of flatsC1I1

United Kingdom

(1)

F1This section applies where a chargeable transaction is entered into by a person or persons nominated or appointed by qualifying tenants of flats contained in premises in exercise of—

(a)

a right under Part 1 of the Landlord and Tenant Act 1987 (right of first refusal), or

(b)

a right under Chapter 1 of Part 1 of the Leasehold Reform, Housing and Urban Development Act 1993 (right to collective enfranchisement).

(1A)

F2The F3amount of tax is determined as follows.

  • Step 1 Determine the fraction of the relevant consideration produced by dividing the total amount of that consideration by the number of qualifying flats contained in the premises.

  • Step 2 If the amount produced by step 1 is F4£500,000 or less, determine the F5amount of tax chargeable in accordance with F6subsection (1B).

  • Step 3 If the amount produced by step 1 is more than £500,000 and the condition in paragraph 3(3) of Schedule 4A is not met with respect to the transaction, determine the F7amount of tax chargeable in accordance with F8subsection (1B).

  • Step 4 If the amount produced by step 1 is more than £500,000 and the condition in paragraph 3(3) of Schedule 4A is met with respect to the transaction, F9subsection (1B) does not apply, and the amount of tax chargeable in respect of the transaction is F1017% of the chargeable consideration for the transaction.

(1B)

F11Where step 2 or 3 of subsection (1A) requires the amount of tax chargeable to be determined in accordance with this subsection, it is determined as follows.

  • Step 1 Determine the amount of tax chargeable under section 55 as if the relevant consideration for the chargeable transaction were the fraction of the relevant consideration calculated under step 1 of subsection (1A).

  • Step 2 Multiply the amount determined at step 1 by the number of qualifying flats contained in the premises.

(4)

F12In this section—

  • “flat” and “qualifying tenant” have the same meaning as in the Chapter or Part of the Act conferring the right being exercised;

  • “qualifying flat” means a flat that is held by a qualifying tenant who is participating in the exercise of the right.

(5)

References in this section to the relevant consideration have the same meaning as in section 55.

Annotations

Textual amendments

F1

S. 74(1) substituted (with effect in accordance with s. 80(7) of the amending Act) by Finance Act 2009 (c. 10), s. 80(2)

F2

S. 74(1A) inserted (with effect in accordance with Sch. 35 para. 10 of the amending Act) by Finance Act 2012 (c. 14), Sch. 35 para. 5(2)

F3

Word in s. 74(1A) substituted (with effect in accordance with s. 2(2) of the amending Act) by Stamp Duty Land Tax Act 2015 (c. 1), Sch. para. 2(2)(a) (with s. 2(3)-(6))

F4

Word in s. 74(1A) substituted (with effect in accordance with s. 112(2)-(4) of the amending Act) by Finance Act 2014 (c. 26), s. 112(1)

F5

Words in s. 74(1A) substituted (with effect in accordance with s. 2(2) of the amending Act) by Stamp Duty Land Tax Act 2015 (c. 1), Sch. para. 2(2)(b)(i) (with s. 2(3)-(6))

F6

Words in s. 74(1A) substituted (with effect in accordance with s. 2(2) of the amending Act) by Stamp Duty Land Tax Act 2015 (c. 1), Sch. para. 2(2)(b)(ii) (with s. 2(3)-(6))

F7

Words in s. 74(1A) substituted (with effect in accordance with s. 2(2) of the amending Act) by Stamp Duty Land Tax Act 2015 (c. 1), Sch. para. 2(2)(c)(i) (with s. 2(3)-(6))

F8

Words in s. 74(1A) substituted (with effect in accordance with s. 2(2) of the amending Act) by Stamp Duty Land Tax Act 2015 (c. 1), Sch. para. 2(2)(c)(ii) (with s. 2(3)-(6))

F9

Words in s. 74(1A) substituted (with effect in accordance with s. 2(2) of the amending Act) by Stamp Duty Land Tax Act 2015 (c. 1), Sch. para. 2(2)(d) (with s. 2(3)-(6))

F10

Word in s. 74(1A) substituted (with effect in accordance with s. 53(2) of the amending Act) by Finance Act 2025 (c. 8), s. 53(1)(b)(2) (with s. 53(3)(4))

F11

S. 74(1B) substituted for s. 74(2)(3) (with effect in accordance with s. 2(2) of the amending Act) by Stamp Duty Land Tax Act 2015 (c. 1), Sch. para. 2(3) (with s. 2(3)-(6))

F12

S. 74(4) substituted (with effect in accordance with s. 80(7) of the amending Act) by Finance Act 2009 (c. 10), s. 80(4)

F13

S. 74 heading substituted (with effect in accordance with s. 80(7) of the amending Act) by Finance Act 2009 (c. 10), s. 80(5)

Modifications

C1

S. 55(2) modified (temp.) (21.7.2009) by Finance Act 2009 (c. 10), s. 10(1)

Commencement

I1

Pt. 4 wholly in force at Royal Assent subject to Sch. 19, see s. 124, Sch. 19 para. 1(1)