(1) This section applies to an accountable person who had waived his or her right to exemption from tax in accordance with section 7 and who had not cancelled that waiver before 1 July 2008 (hereafter in this section referred to as a "landlord").

(2) For the purposes of applying section 12E, the adjustment period (within the meaning of that section or, as the context may require, the period to be treated as the adjustment period in accordance with section 4C(11)) in relation to a capital good the tax chargeable on the landlord’s acquisition or development of which that landlord was obliged to take into account when that landlord cancelled his or her waiver of exemption, shall end on the date on which that cancellation had effect.

(3) Where a landlord [makes or has made]¹ a letting and, were that letting not already subject to a waiver, that letting would be one in respect of which the landlord would not, because of the provisions of section 7A(2), be entitled to exercise a landlord’s option to tax in accordance with section 7A, then the landlord’s waiver of exemption shall, subject to subsection (4), immediately cease to apply to that letting, and—

(a) that landlord shall pay the amount, as if it were tax due by that person in accordance with section 19 for the taxable period in which the waiver ceases to apply to that letting and the amount shall be the sum, if any, which would be payable in accordance with section 7(3) in respect of the cancellation of a waiver as if that landlord’s waiver applied only to the immovable goods or the interest in immovable goods subject to that letting to which the waiver has ceased to apply, and

(b) the amounts taken into account in calculating that sum, if any, shall be disregarded in any future cancellation of that waiver.

(4)(a) Subject to paragraph (c), where a landlord has a letting to which subsection (3) would otherwise apply, the provisions of that subsection shall not apply while, on the basis of the letting agreement in place, the tax that the landlord will be required to account for, in equal amounts for each taxable period, in respect of the letting during the next 12 months is not less than the amount calculated at that time in accordance with the formula in subsection (5).

(b) Where the conditions in paragraph (a) fail to be satisfied because of a variation in the terms of the lease or otherwise or if the tax paid at any time in respect of the letting is less than the tax payable, this subsection shall cease to apply.

(c) This subsection applies to a letting referred to in paragraph (a)—

(i) where a landlord has a waiver in place on 18 February 2008 and—

(I) on 1 July 2008 that letting had been in place since 18 February 2008, or

(II) the immovable goods subject to the letting are owned by that landlord on 18 February 2008 and are in the course of development by or on behalf of that landlord on that day,

or

(ii) where a landlord holds an interest, other than a freehold interest or a freehold equivalent interest in the immovable goods subject to the letting, acquired between 18 February 2008 and 30 June 2008 from a person with whom the landlord is not connected, within the meaning of section 7A, in a transaction which is treated as a supply of goods in accordance with section 4.

(5) The formula to be used for the purposes of subsection (4) is:

 A – B 
12 – Y

where—

A is the amount of tax that would be taken into account for the purposes of section 7(3) in respect of the acquisition or development of the immovable goods, if the waiver were being cancelled at the time referred to in subsection (4),

B is the amount of tax chargeable on the consideration by the landlord in respect of the letting of those immovable goods and paid in accordance with section 19 that would be taken into account for the purposes of section 7(3) if the waiver were being cancelled at that time, and if that letting were the only one to which that waiver applied, and

Y is 11, or the number of full years since the later of—

(i) the date of the first letting of those goods, and

(ii) the date on which the landlord waived exemption,

where that number is less than 11 years.

(6) Where a landlord has a letting to which subsection (3) or (4) applies and that landlord becomes a person in a group within the meaning of section 8(8) on or after 1 July 2008 and the person to whom that letting is made is a person in that group, then the person referred to in section 8(8)(a)(i)(I) in respect of that group shall be liable to pay the amount as specified in subsection (3)(a) as if it were tax due in accordance with section 19—

(a) in the case of a landlord who became a person in that group before [24 December 2008]¹, in [the taxable period beginning on 1 November 2008]², or

(b) in the case of a landlord who became a person in that group after [on or after the last mentioned date]³, in the taxable period during which that landlord became a person in that group.

(7)(a) This subsection applies where—

(i) on 1 July 2008 a landlord had an interest in relevant immovable goods,

(ii) on [2 June 2009]¹ the landlord did not have an interest in any relevant immovable goods, and

(iii) that landlord’s waiver of exemption had not been cancelled on or before [2 June 2009]¹ in accordance with section 7(3).

(b) Where this subsection applies—

(i) the landlord’s waiver of exemption shall be treated as if it were cancelled in accordance with section 7(3) on [3 June 2009]², and

(ii) that landlord shall pay an amount, being the amount payable in accordance with section 7(3) in respect of the cancellation of that waiver, as if it were tax due by that landlord for the taxable period beginning on 1 May 2009.

(8)(a) This subsection applies where—

(i) in the period from 1 July 2008 to [2 June 2009]¹, a landlord made a supply of relevant immovable goods during the adjustment period (within the meaning of section 12E or, as the context may require, the period to be treated as the adjustment period in accordance with section 4C(11)) in relation to those goods, and

(ii) tax was not chargeable on that supply.

(b) Where this subsection applies, then for the purposes of sections 4B(5), 12E(3)(d) and 12E(7)(b) the supply of the relevant immovable goods is treated as if it was made on [3 June 2009]².

(c) Paragraph (b) shall not apply where—

(i) the landlord’s waiver of exemption has been cancelled in accordance with subsection (7), or

(ii) the landlord cancels his or her waiver of exemption in accordance with section 7(3) before 1 July 2009.

(9)(a) This subsection applies where—

(i) on or after [3 June 2009]¹ a landlord has an interest in relevant immovable goods,

(ii) the landlord ceases, whether as a result of disposing of such goods or otherwise, to have an interest in any such goods, and

(iii) on the date when that landlord ceases to have any such interest, that landlord’s waiver of exemption has not been cancelled in accordance with section 7(3).

(b) Where this subsection applies—

(i) the landlord’s waiver of exemption shall be treated as if it were cancelled on the date referred to in paragraph (a)(iii), and

(ii) that landlord shall pay an amount, being the amount payable in accordance with section 7(3) in respect of the cancellation of that waiver, as if it were tax due by that landlord for the taxable period in which the waiver of exemption is so treated as cancelled.

(10) In this section—

"relevant immovable goods" means immovable goods the tax chargeable on the acquisition or development of which a landlord would be obliged to take into account in accordance with section 7(3) in relation to the cancellation of that landlord’s waiver of [exemption.]¹

...²