Introduction Free-standing transfers: application of rules about consideration and substantial performance
36.Schedule 2A Paragraph 9 deals with the treatment of the transferee in cases where the pre-completion transaction is a free-standing transfer (as defined in paragraph 2(2)).
37.Sub-paragraph (2) provides that the consideration for any transaction effecting the acquisition of the subject-matter of the free-standing transfer shall include any consideration given for that free-standing transfer.
38.Sub-paragraph (3) provides that any acquisition under sub-paragraph (2) includes any acquisition deemed to take place as a result of substantial performance of a contract without completion (under section 44 (4) FA 2003).
39.Sub-paragraph (4) provides that where the transferee (or its assignee) takes any action that falls within section 44(5) FA 2003 (substantial performance) that is deemed to effect the substantial performance of the original contract.
40.Sub-paragraph (5) sets out the position where there are successive free-standing transfers under paragraph 9. In this case, each successive free-standing transfer is treated as a separate contract to which section 44 FA 2003 applies and sub-paragraph (4) applies with regard to substantial performance for each such contract.
41.Sub-paragraph (6) provides that references to the transferee (or its assignee) in relation to any action taken by that person in accordance with sub-paragraph (4) include anyone connected with that person.
42.Sub-paragraph (7) provides that references) to the transferee’s assignee in this paragraph will be read as a person who is entitled to exercise rights under the free-standing transfer as a result of a transaction that is an assignment of rights, for example, in a mixture or series of pre-completion transactions that includes both assignments of rights and free-standing transfers.