Introduction Stamp duty land tax: first transaction
25.Paragraph 6(1) sets out the requirements for relief from SDLT on the first transaction. These are that the interest acquired is of land in the UK and that each of the conditions A to C are met within 30 days of the date of the transfer of interest in land from P to Q.
26.Paragraph 6(2) provides that where the requirements in this paragraph are satisfied the first transfer from P to Q is exempt from SDLT.
27.Paragraph 6(3) provides that the relief is subject to conditions relating to asset substitution at paragraph 18.
28.Paragraph 6(4) provides that relief on the first transaction is also subject to the provisions of paragraph 20 which provides that relief on the first transaction is not available where a bond-holder, or group of connected bond-holders, acquires control of the underlying asset.
29.Paragraph 7 details the circumstances where the relief on the first transaction will be withdrawn.
30.Paragraph 7(1)(a) provides for the first circumstance, where the asset is returned to P but the requirement to issue bonds to the value of 60 per cent of the asset is not satisfied and the asset is not held as a bond asset until the termination of the bond.
31.Paragraph 7(1)(b) provides that the relief is also withdrawn where a period of ten years has elapsed since the first transaction without conditions E and F having been satisfied.
32.Paragraph 7(1)(c) provides that relief is also withdrawn if at any time it becomes evident that any of conditions E to G cannot or will not be fulfilled.
33.Paragraph 7(2) provides that relief is also withdrawn where Q fails to provide prescribed evidence to HMRC that they have registered a charge within 120 days of the transaction (see above).
34.Paragraph 7(3) provides that if any of the circumstances set out in paragraphs 7(1) and (2) apply then the first transaction is no longer exempt from SDLT.
35.Paragraph 7(4) provides that the amount of SDLT chargeable is the tax that would have been charged on the market value of the interest transferred and paragraph 7(5) provides the time from which interest is due in respect of that amount.
36.Paragraph 7(6) provides that Q is also required to deliver a further land transaction return within 30 days of the date on which the relief is withdrawn.
37.Paragraph 7(7) provides that the return must include a self–assessment of the amount chargeable to tax in respect of the first transaction.
38.Paragraph 7(9) provides that the requirements of Schedule 10 to FA 2003 and section 76 of that Act are modified for the purposes of this Schedule with the transaction being the event which triggered withdrawal of the relief and the effective date of transaction being the date of the withdrawal of the relief.