Schedule 19 – Leases Part 4 – Review of Tax Chargeable
274.Paragraph 10 makes provision for a system of reviews of the tax chargeable to ensure that the correct amount of tax is paid in relation to the lease, taking account of any variations in rent or other terms made during the course of the lease. In most cases, the tax chargeable will be reviewed on every third anniversary of the effective date of the lease.
275.Sub-paragraph (1) provides that paragraph 10 applies where a buyer (i.e. the tenant) has made a land transaction return (in terms of section 29(1)) or where a return has been made under section 31 (return where contingency ceases or consideration ascertained) or under various paragraphs of this schedule, namely: paragraph 20 (return where lease for fixed term continues after end of term), paragraph 22 (return in relation to lease for an indefinite term) or paragraph 30 (return where transaction becomes notifiable on variation of rent or term).
276.Sub-paragraph (2) requires the buyer to make a return to the Tax Authority on the review date, unless the lease has been assigned or terminated. (Wherever returns are required under schedule 19, any tax or additional tax payable must be paid at the same time the return is made – see section 40(2)(e)).
277.Sub-paragraphs (3) and (4) require the buyer to assess the amount of tax that is chargeable at the review date and submit a return within 30 days, beginning with the day after the review date. Sub-paragraph (5) clarifies that the tax rates and bands to be applied at the review of the tax chargeable are to be those that were in force at the effective date of the transaction.
278.Sub-paragraph (6) provides that where at a review date it is calculated that less tax is now due in relation to the lease, the overpaid tax is to be repaid by the Tax Authority. Sub-paragraph (7) defines what the “review date” is in the case of each of the returns referred to in sub-paragraph (1).
279.Separate from the provisions of paragraph 10, paragraph 11 makes provision for the buyer to submit a return where the lease is assigned or terminated. Sub-paragraphs (2), (3) and (4) provide that the buyer must calculate the tax chargeable and make a further return to the Tax Authority within 30 days, beginning with the day after the relevant day (which is the day the lease is assigned or terminated). Sub-paragraph (5) clarifies that the tax rates and bands to be applied at the review of the tax chargeable are to be those that were in force at the effective date of the transaction.
280.Sub-paragraph (6) provides that where a lease is assigned or terminated and it is calculated that less tax is now due in relation to the lease, the overpaid tax is to be repaid by the Tax Authority. If it is calculated that less tax payable is at the date of the assignation or termination because of changes that have been made to the lease since the last return was made, then a claim for overpayment of tax should be submitted to the Tax Authority. Such overpayments may arise, for example, because since the last return was submitted, the lease has been varied to reduce the spatial area of the premises subject to the lease and the rent has been reduced accordingly.