|
|
Amendment of section 4 (special provisions in relation to the supply of immovable goods) of Principal Act.
|
98.—Section 4 of the Principal Act is hereby amended—
|
|
| |
(a) in subsection (1):
|
|
| |
(i) by the substitution of the following paragraph for paragraph (b):
|
|
| |
“(b) In this section ‘interest’, in relation to immovable goods, means an estate or interest therein which, when it was created was for a period of at least ten years or, if it was for a period of less than ten years, its terms contained an option for the person in whose favour the interest was created to extend it to a period of at least ten years, but does not include a mortgage, and a reference to the disposal of an interest includes a reference to the creation of an interest, and an interval of the type referred to in subsection (2A) shall be deemed to be an interest for the purposes of this section.”,
|
|
| |
and
|
|
| |
(ii) by the insertion of the following paragraph after paragraph (b):
|
|
| |
“(c) Where an interest is created and, at the date of its creation, its terms contain one or more options for the person in whose favour the interest was so created to extend that interest, then that interest shall be deemed to be for the period from the date of creation of that interest to the date that that interest would expire if those options were so exercised.”,
|
|
| |
(b) in subsection (2) by the insertion after “disposes” of “(including by way of surrender or by way of assignment)”,
|
|
| |
(c) by the insertion of the following subsections after subsection (2):
|
|
| |
“(2A) Where the surrender of an interest in immovable goods is chargeable to tax, and those goods have not been developed since the date of creation of that interest (hereafter referred to in this subsection as a ‘surrendered interest’), and the person to whom the surrendered interest was surrendered subsequently disposes, as regards the whole or any part of those goods, of an interest or of an interest which derives therefrom on a date before the date on which the surrendered interest would, but for its surrender, have expired, then that disposal shall be deemed to be a supply of immovable goods, for the purposes of this Act, and where the interest (hereafter referred to in this section as a ‘subsequent interest’) disposed of is for a period which extends beyond the date on which the surrendered interest would, but for its surrender, have expired, the disposal of that subsequent interest shall be treated, for the purposes of this Act, as if it were the disposal of an interest for the period equal to the interval between the date of the disposal of the subsequent interest and the date on which the surrendered interest would, but for its surrender, have expired (a period hereafter referred to in this section as an ‘interval’), and where such interval is for a period of less than ten years, that disposal shall be treated as a supply of immovable goods to which subsection (6) applies:
|
|
| |
Provided that the person, who disposes of a subsequent interest in which the interval is for a period of less than ten years, may opt, subject to and in accordance with regulations, if any, to have that disposal treated as a supply of immovable goods to which subsection (6) does not apply.
|
|
| |
(2B) Where a person disposes of a subsequent interest in such circumstances that such person retains the reversion on the interest disposed of, then—
|
|
| |
(a) if the subsequent interest expires on or after the date on which the surrendered interest which enabled that person to dispose of a subsequent interest (hereafter referred to in this subsection as ‘the surrendered interest’) would, but for its surrender, have expired, the provisions of subsection (4) shall not apply to that reversion;
|
|
| |
(b) if the subsequent interest expires prior to the date on which the surrendered interest would, but for its surrender, have expired, the provisions of subsection (4) shall apply to that reversion and that reversion shall be deemed for the purposes of subsection (4) to be for the period between the date of expiry of the subsequent interest and the date on which the surrendered interest would, but for its surrender, have expired.
|
|
| |
(2C) Where the surrender of an interest in immovable goods is chargeable to tax, and those goods have not been developed since that interest was created and the person to whom the interest that was surrendered surrenders possession of those goods or any part thereof, on a date before the date on which the interest that was surrendered would, but for its surrender, have expired, in such circumstances that that surrender of possession does not constitute a supply of goods, that surrender of possession shall be deemed for the purposes of section 3(1)(f), to be an appropriation of the goods or of the part thereof, as the case may be, for a purpose other than the purpose of that person's business except where such surrender of possession is made—
|
|
| |
(a) in accordance with an agreement for the leasing or letting of those goods where the person surrendering possession is chargeable to tax in respect of the rent or other payment under the agreement, or
|
|
| |
(b) in connection with a transfer which, in accordance with section 3 (5), is deemed, for the purposes of this Act, not to be a supply.”,
|
|
| |
and
|
|
| |
(d) by the insertion of the following subsection after subsection (7):
|
|
| |
“(8) Where tax is chargeable in relation to a supply of immovable goods which is a surrender of an interest in immovable goods or an assignment of an interest in immovable goods to—
|
|
| |
(a) a taxable person,
|
|
| |
(b) a Department of State or a local authority, or
|
|
| |
(c) a person supplying goods of a kind referred to in paragraph (a) of the definition of ‘exempted activity’ in section 1 or services of a kind referred to in paragraphs (i), (iv), (ix), (xi), (xia), (xiii) and (xiv) of the First Schedule, in the course or furtherance of business,
|
|
| |
then, for the purposes of this Act, the person to whom the goods are supplied shall be deemed to supply those goods in the course or furtherance of business and shall be liable to pay the said tax and in that case the person who makes that surrender or assignment shall be deemed not to supply the goods:
|
|
| |
Provided that where a Department of State or a local authority is deemed to make a supply under this subsection, an order under subsection (2A) (a) of section 8 shall be deemed to have been made in respect of that supply.”.
|
