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Home › Forums › Patrick Cannon › Does section 45 FA 2003 require there to be two contracts?
Does section 45 FA 2003 require there to be two separate contracts i.e. one between A and B and a second between B and C? I have a scenario whereby a sale and purchase agreement provides that A sells the whole of a Site to B and then B sells part of the Site to C. Does the fact of this being stated in one single document jeopardise the subsale relief?
Julia, a sub-sale of part is within the sub-sale rules (see s45(5) FA 2003) and this can be in one document if you wish but do ensure that as a matter of drafting the two sale contracts are distinct from one another.
Thanks Patrick. The contract currently has a clause x.1 which says A will sell whole to B and clause x.2 which says B will sell part to C. Both are conditional upon the same conditions being satisfied. In principle, does this sound like a scenario that would qualify for relief under s.45? Many thanks
Yes it does. To state the obvious it would be prudent to ensure that the flow of funds through the solicitor’s accounts reflects the payment from C to B and then from B to A ie separate accounts and avoid C paying A direct to preserve the integrity of the sale of whole from A to B and observe the accounts rules.