Finance Act 2009

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Exchange of houses.

24.— The Principal Act is amended by inserting the following after section 83B:

“Exchange of houses.

83C.— (1) In this section—

‘excess land’ means an area of land other than land referred to in the definition of ‘house’;

‘house’ means a building or part of a building, used or suitable for use as a dwelling, and includes an area of land for occupation and enjoyment with the dwelling as its gardens or grounds which, exclusive of the area of the land on which the dwelling is constructed, does not exceed 0.4047 hectare;

‘house builder’ means a person who has constructed a new house and includes a person who is connected, within the meaning of section 10 of the Taxes Consolidation Act 1997 , with the first-mentioned person as part of an arrangement in connection with the construction or disposal of the house;

‘new house’ means a house that immediately prior to a conveyance, transfer or lease of the house by the house builder has not previously been occupied or sold;

‘ old house ’ means a house that, immediately prior to a conveyance or transfer of the house by an individual, has been occupied by the individual or any other individual.

(2) This section applies to an instrument which operates as a conveyance or transfer of an old house by an individual (whether alone or with other individuals) to a house builder where—

(a) the instrument contains a certificate that this section applies,

(b) either or both the house builder and any other person conveys, transfers or leases a new house to the individual (whether alone or with other individuals), and

(c) the conveyance or transfer of the old house is entered into in consideration of the conveyance, transfer or lease of the new house (in this section referred to as an ‘ exchange of houses ’).

(3) Notwithstanding section 37, stamp duty shall not be chargeable on an instrument to which this section applies in so far as the instrument effects the conveyance or transfer of an old house by an individual (whether alone or with other individuals) to a house builder.

(4) Where subsection (3) applies and the old house and the new house are not of equal value, any consideration paid or agreed to be paid for equality shall consist only of a payment in cash.

(5) Where excess land is conveyed or transferred by an individual to a house builder by an instrument to which this section applies, the instrument, in so far as it conveys or transfers excess land, shall be chargeable to stamp duty, in respect of the excess land, as if it were a conveyance or transfer on sale of the excess land with the substitution of the value of the excess land thereby conveyed or transferred for the amount or value of the consideration for the sale.

(6) Subsection (3) shall not apply to an instrument unless it has, in accordance with section 20, been stamped with a particular stamp denoting that it is duly stamped or, as the case may be, that it is not chargeable with any duty.

(7) For the purposes of subsection (6), where any exchange of houses is effected by more than one instrument, the instruments shall, for the purposes of section 20, be presented to the Commissioners at the same time.

(8) (a) Where relief from stamp duty arises under this section, on the first occurrence of either of the events specified in paragraph (c), the house builder shall become liable to pay the Commissioners an amount (in this subsection referred to as a ‘ clawback ’) equal to the amount of the duty that would have been charged on the instrument by virtue of section 37, in respect of the conveyance or transfer of the old house to the house builder, together with interest charged on that amount, calculated in accordance with section 159D, from the date of the first occurrence of either of the said events to the date the clawback is paid.

(b) Where relief from stamp duty arises under this section and it is subsequently found that the certificate, referred to in subsection (2)(a), contained in the instrument—

(i) was untrue in any material particular which would have resulted in the relief afforded by this section not applying, and

(ii) was included knowing same to be untrue or in reckless disregard as to whether it was true or not,

then, where a false certificate has been included in the instrument, the house builder shall be liable to pay to the Commissioners a penalty in an amount equal to 125 per cent of the duty that would have been charged on the instrument by virtue of section 37, in respect of the conveyance or transfer of the old house to the house builder, had all the facts been truthfully certified, together with interest charged on that amount, calculated in accordance with section 159D, from the date the instrument was executed to the date the penalty is paid.

(c) The events referred to in paragraph (a) are that—

(i) the old house, or part of the old house, is conveyed or transferred by the house builder to another person, or

(ii) the old house is not conveyed or transferred by the house builder to another person on or before 31 December 2010.

(9) Notwithstanding subsection (8)—

(a) a house builder shall not be liable to a clawback under paragraph (a) of subsection (8) if and to the extent that the house builder has paid a penalty under paragraph (b) of the said subsection,

(b) a house builder shall not be liable to a penalty under paragraph (b) of subsection (8) if and to the extent that the house builder has paid a clawback under paragraph (a) of the said subsection.

(10) This section applies as respects instruments executed on or after 7 May 2009 and on or before 31 December 2010.”.