Reconstruction Reliefs
Changes will be made to the rules governing reconstruction and acquisition reliefs. A company that has purchased its own shares and holds them will no longer be regarded as a shareholder for the purposes of the overall ownership test. Such a company would therefore no longer need to cancel the shares, or accept shares in the acquiring company, in order to qualify for relief. The change takes effect from the day after the date of Royal Assent to the Bill.

Relief for Exchange Intermediaries
The Finance Bill will bring certain stamp duty and stamp duty reserve tax reliefs into line with the Markets in Financial Instruments Directive, which comes into effect on 1 November 2007.

The Bill will provide that transactions in shares that are admitted to trading on a regulated market under the Directive no longer need to be reported to that market, nor will intermediaries need to be members of that market, in order to qualify for relief.

In addition, changes will be made to the rules under which regulations may be made removing stamp duty and stamp duty reserve tax from transactions involving investment exchanges and clearing houses, in order to align them with the markets that are defined in the Directive.

These provisions take effect from 1 November 2007.

Payment of Tax and Self-Certificate
Payment of any stamp duty land tax self-assessed in a land transaction return will no longer need to accompany the return. The tax must instead be paid on or before the filing date, i.e. 30 days from the ‘effective date’ of the transaction. This provision will apply to any transaction taking place on or after the date of Royal Assent to the Bill.

The Bill will also provide for regulations enabling the declaration contained in a self-certificate to be made, in appropriate cases, by an authorised agent or the relevant Official Solicitor rather than the purchaser. This provision will take effect from Royal Assent.

Exchanges of Property between Connected Persons
The Finance Bill will provide that where an exchange of property takes place between ‘connected persons’, the transactions will not be treated as ‘linked’, for the purposes of determining the stamp duty land tax rate.

This provision will apply where any land transaction which is part of an exchange takes place on or after the date of Royal Assent to the Bill.

Anti-avoidance Measures
Provisions will be introduced replacing, with amendments, the Stamp Duty Land Tax (Variation of the Finance Act 2003) Regulations, SI 2006/3237 (concerning both linked transactions and partnerships). The provisions will have effect for any transaction the effective date of which is on or after the date on which the Bill receives Royal Assent. The regulations were to have effect only for 18 months from the date they were made, so the Government has decided to replace them by permanent provision in the Bill.

Relief for Shared Ownership Trusts
The Finance Bill will contain provisions to extend to shared ownership trusts the same stamp duty land tax benefits currently available for shared ownership leases. The relief will apply to all transactions involving shared ownership trusts provided by ‘qualifying bodies’, where the effective date is on or after the date of Royal Assent to the Bill.

The provisions will entitle a purchaser who buys property in instalments under the shared ownership trust structure to pay tax only on the first and last instalments. Alternatively, the purchaser may elect to pay the tax once and for all on the market value of the property, or on the maximum share which can be purchased.

The qualifying bodies are:

• local housing authorities;
• housing associations;
• housing action trusts;
• the Northern Ireland Housing Executive;
• the Commission for the New Towns; and
• development corporations.

Relief for New Zero-carbon Homes A temporary relief from stamp duty land tax is to be introduced for purchasers of new zero-carbon homes. The relief will apply with effect from 1 October 2007 and will operate for the five years up to 30 September 2012.

Where a home qualifies for the relief, there will be no stamp duty land tax liability where the purchase price is £500,000 or less. Where the purchase price exceeds £500,000, the liability will be reduced by £15,000. Relief will be restricted to dwellings which are first occupied for residential purposes at the time of the transaction which leads to the stamp duty land tax charge. To qualify, homes must meet strict energy efficiency and renewable power requirements. A certification process will be used to determine eligibility.