Clause 90 - Application to defer payment in case of contingent or uncertain consideration

Finance Bill – in a Public Bill Committee at 3:15 pm on 10th June 2003.

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Photo of Mark Prisk Mark Prisk Shadow Paymaster General 3:15 pm, 10th June 2003

I beg to move amendment No. 193, in

clause 90, page 58, line 26, leave out '18 months' and insert '6 months'.

I feel almost giddy after racing through all those clauses. It seemed that someone had pushed the fast button on the escalator and we suddenly began to hurtle along.

Photo of Mark Prisk Mark Prisk Shadow Paymaster General

And very pleasant it was to move forward so quickly.

Amendment No. 193 relates to clause 90, which provides that a purchaser may make an application for stamp duty land tax to be deferred. The application may be made if the whole or part of the consideration for a transaction is contingent or uncertain and if some or all of the consideration

''falls, or may fall, more than 18 months after the effective date of the transaction.''

The purpose of this probing amendment is to replace ''18 months'' with ''6 months''. It follows from legal representations that I hope the Chief Secretary will bear in mind. In particular, I am grateful to the Law Society for its advice and support. The Law Society and several leading practices argue that, given the fact that stamp duty land tax is due 30 days after the transaction, it is unreasonable that an application to defer payment of stamp duty land tax can be made only where part of the consideration falls or may fall more than 18 months after the effective date. The period of 18 months should, on the basis of fairness and modern commercial practice, be reduced to six months. I commend that proposal to the Chief Secretary and hope that we will have a positive reply.

Photo of Mr Paul Boateng Mr Paul Boateng Chief Secretary, HM Treasury, The Chief Secretary to the Treasury 3:30 pm, 10th June 2003

The amendment would reduce the time limit in clause 90 from 18 months to six months. It would allow a purchaser to make an application for stamp duty land tax to be deferred under clause 90 if some or all of the consideration fell more than six months after the effective date of the transaction. It would alter the circumstances in which an application for deferred payment could made by reducing the time limit in subsection 1(b). If the amendment were accepted, it would mean that, if the other conditions were met, an application for deferred payment could be made when some or all of the consideration fell more than six months after the transaction.

The amendment is in line with several representations that have been made on the clause. Having considered their detail carefully, we have accepted that the existing 18-month time limit may be unduly restrictive. We are therefore content with the amendment. I commend it to the Committee.

Turning to clause 90 itself, it provides that in certain circumstances a purchaser may make an application for SDLT to be deferred.

Photo of Mr John McWilliam Mr John McWilliam Labour, Blaydon

Order. If the Minister wants to deal with clause stand part at the same time, I am perfectly content. I am saying that so that other hon. Members know what we are doing.

Photo of Mr Paul Boateng Mr Paul Boateng Chief Secretary, HM Treasury, The Chief Secretary to the Treasury

I am grateful, Mr. McWilliam.

Payment of consideration in that way is not uncommon in complex developments. The clause will help purchasers who meet the criteria to plan for their payments of tax in those circumstances. The clause includes a regulatory power, under which regulations will be made to set out the detailed requirements for an application, to provide an administrative framework. There will be an opportunity for consultation on the regulations before they are laid, so that the Government can ensure that the administrative provision works effectively and practically for those who wish to make an application. Clause 90 allows taxpayers to defer SDLT payments in certain prescribed circumstances. I commend the clause, with the amendment, to the Committee.

Photo of Mark Prisk Mark Prisk Shadow Paymaster General

I am delighted that the Chief Secretary has considered the amendment, listened to outside concerns, and accepted it. I welcome that.

Amendment agreed to.

Clause 90, as amended, ordered to stand part of the Bill.

Clause 91 ordered to stand part of the Bill.

Schedule 12 agreed to.

Clause 92 ordered to stand part of the Bill.