Finance Act 2008

Owner-occupier reliefs: amendment of Chapter 2 (other instruments) of Part 7 of Principal Act.

122.— (1) Chapter 2 of Part 7 of the Principal Act is amended—

(a) in section 91 by inserting the following after subsection (2):

“(2A) Notwithstanding subsection (2)(b), subsection (2)(c) shall not apply to an instrument to which subsection (1) applied to the extent that any rent or payment in the nature of rent, for the use of the dwellinghouse or apartment or any part of the dwellinghouse or apartment, is derived—

(a) on or after 5 December 2007, and

(b) after the expiration of a period of 2 years which commences on the date of the execution of the instrument concerned.”,

(b) in section 91A—

(i) in subsection (4)(b) by substituting “2 years” for “5 years”, and

(ii) by inserting the following after subsection (6):

“(6A) Notwithstanding subsection (4), subsection (6) shall not apply to an instrument, being an instrument executed before 5 December 2007, to which subsection (3) applied to the extent that any rent or payment in the nature of rent, for the use of the dwellinghouse or apartment or any part of the dwellinghouse or apartment, is derived—

(a) on or after 5 December 2007, and

(b) after the expiration of a period of 2 years which commences on the date of the execution of the instrument concerned.”,

(c) in section 92—

(i) in subsection (1)(b)(ii) by substituting “2 years” for “5 years”, and

(ii) by inserting the following after subsection (2):

“(2A) Notwithstanding subsection (1)(b), subsection (2) shall not apply to an instrument, being an instrument executed before 5 December 2007, to which subsection (1)(a) applied to the extent that any rent or payment in the nature of rent, for the use of the dwellinghouse or apartment or any part of the dwellinghouse or apartment, is derived—

(a) on or after 5 December 2007, and

(b) after the expiration of a period of 2 years which commences on the date of the execution of the instrument concerned.”,

and

(d) in section 92B—

(i) in subsection (1)—

(I) by substituting “In this section—” for “In this section”,

(II) in the definition of “first time purchaser”—

(A) by inserting “, in relation to a purchaser,” before “means”, and

(B) by substituting “27 June 2000;” for “27 June 2000.” where it last occurs,

and

(III) by inserting the following after the definition of “first time purchaser”:

“ ‘ purchaser ’ means an individual who purchases a dwellinghouse or apartment or an interest in a dwellinghouse or apartment, where the consideration for the purchase required to be paid by the individual is derived from the individual’s own means, which may be or may include consideration derived from—

(a) an unconditional gift, or

(b) a bona fide loan evidenced in writing,

made to the individual for the purposes of the purchase concerned.”,

(ii) by inserting the following subsections after subsection (1):

“(1A) For the purposes of the definition of ‘ purchaser ’—

(a) a gift shall be deemed not to be an unconditional gift where the donor of the gift concerned—

(i) is not a party to the instrument giving effect to the purchase of the dwellinghouse or apartment or the interest in the dwellinghouse or apartment, and

(ii) (I) intends to occupy or does occupy the dwellinghouse or apartment with the purchaser as the only or principal place of residence of each of them, or

(II) as part of an understanding or agreement can have—

(A) the dwellinghouse or apartment or the interest in the dwellinghouse or apartment, or

(B) a part of the dwellinghouse or apartment or a part of the interest in the dwellinghouse or apartment,

transferred to that donor at some time after the date of execution of the instrument concerned,

and

(b) where some or all of the consideration, required to be paid by the purchaser for the purchase of the dwellinghouse or apartment or the interest in the dwellinghouse or apartment, is derived from a loan, and where the individual making the loan—

(i) is not a party to the instrument giving effect to the purchase of the dwellinghouse or apartment or the interest in the dwellinghouse or apartment, and

(ii) (I) intends to occupy or does occupy the dwellinghouse or apartment with the purchaser as the only or principal place of residence of each of them, or

(II) as part of an understanding or agreement can have—

(A) the dwellinghouse or apartment or the interest in the dwellinghouse or apartment, or

(B) a part of the dwellinghouse or apartment or a part of the interest in the dwellinghouse or apartment,

transferred to the individual who made the loan at some time after the date of execution of the instrument concerned,

then such loan shall not be regarded as a bona fide loan.

(1B) Subsection (1A) shall not apply to a purchaser, where the donor of the gift, or the individual making the loan, to the purchaser is a parent of the purchaser.”,

(iii) in subsection (2) by substituting “paragraphs (2) to (4)” for “paragraphs (2) to (6A)” and “clauses (ii) to (iv)” for “clauses (ii) to (vii)”,

(iv) in subsection (3)(b)(ii) by substituting “2 years” for “5 years”, and

(v) by inserting the following after subsection (4):

“(4A) Notwithstanding subsection (3), subsection (4) shall not apply to an instrument, being an instrument executed before 5 December 2007, to which subsection (2) applied to the extent that any rent or payment in the nature of rent, for the use of the dwellinghouse or apartment or any part of the dwellinghouse or apartment, is derived—

(a) on or after 5 December 2007, and

(b) after the expiration of a period of 2 years which commences on the date of the execution of the instrument concerned.”.

(2) (a) Paragraphs (a), (b)(ii), (c)(ii) and (d)(v) of subsection (1) are deemed to have applied as on and from 5 December 2007.

(b) Paragraphs (b)(i), (c)(i) and (d)(iv) of subsection(1) apply as respects instruments executed on or after 5 December 2007.

(c) Subparagraphs (i) and (ii) of subsection (1)(d) apply as respects instruments executed on or after 31 January 2008.

(d) Paragraph (d)(iii) of subsection (1) applies as respects instruments executed on or after 5 November 2007.