Clause 43 - Land transactions
Finance Bill
10:30 am
Mr John Burnett (Torridge and West Devon, Liberal Democrat)
I welcome you, Mr. Gale, and the Chief Secretary. I shall take up the invitation to widen the debate slightly, particularly in the light of comments that have been made on the clause and the very wide definition of ''purchaser''.
The Law Society of England and Wales suggests that it would be of considerable assistance to delete the words ''or is a party to'' from subsection (5). I hope that the Chief Secretary will consider that. The provision makes the tax bite extremely widely. For example, if a lessee requires a landlord's consent for the grant of a sub-lease and, as a result of consent being given, there is an increase in the value of the landlord's interest—that would be possible if the outgoing sub-tenant were a company of straw or a company of less value, and if the incoming sub-tenant were a FTSE 100 company, which would be a valuable tenant—that would constitute an acquisition of a chargeable interest under clause 3(3)(c)(i) by the landlord, who would become a purchaser, notwithstanding the fact that he had given no consideration. In those circumstances, the landlord and lessee would be treated as joint purchasers under clause 103, and the landlord would be jointly liable for any stamp duty land tax chargeable on the lessee, even though the landlord had paid no consideration. I am anxious for the Chief Secretary to put on the record his views of the operation of the clause in the light of those points.
I reiterate what the hon. Member for Hertford and Stortford (Mr. Prisk) said. The tax has a long history—I think that the hon. Gentleman said some 200 to 300 years. It was a voluntary tax in many ways. People did not have to pay it, but they could not register a property if they had not stamped the written documents, and they could not litigate on any document that required stamping.