Stamp Duty Land Tax: a statutory order to provide relief for certain transfers involving a public body
Published 5 May 2016
© Crown copyright 2016
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Who is likely to be affected
The Homes and Communities Agency (HCA) acquiring land under the Housing and Regeneration Act 2008 (HRA 2008).
General description of the measure
The measure will ensure that transfers to the HCA under specific provisions of the HRA 2008 will qualify for relief from Stamp Duty Land Tax (SDLT).
Policy objective
Transfers of land are potentially liable to SDLT. There is a presumption that public bodies should not be liable to SDLT as a consequence of statutory reorganisations which take place entirely within the public sector. Relief is available where a land transfer is in connection with a statutory reorganisation and both parties to the transaction are public bodies as defined in the SDLT provisions. Where a transfer is made in similar circumstances, but does not meet all the conditions for the relief, for example, because the vendor does not meet the specific definition of public body, the Treasury can make an Order to provide relief.
The Order ensures that transfers of land made under the particular statutory provisions set out within the Order, will qualify for SDLT relief, as long as one of the parties to the transaction meets the definition of a public body.
Background to the measure
As announced at Spending Review 2015, the government’s plan to increase the housing supply, includes a commitment to release surplus public sector land deemed suitable for development. Under the HRA 2008, government departments will transfer their land to the HCA, the government’s land disposal agent. The HRA 2008 was amended by the Infrastructure Act 2015 permitting, by regulations, other bodies, such as public sector arm’s length bodies, to transfer land to the HCA. The HCA’s role is to undertake essential work on the land, for example, seeking planning permission and decontamination, before selling it on to developers for housing.
HCA and its parent department, the Department of Communities and Local Government (DCLG) contacted HM Revenue and Customs (HMRC) in 2015 regarding the scope of the relief for public bodies in the SDLT legislation. Although some of the proposed transfers of land to the HCA under the HRA 2008 will qualify for relief, others would not. An Order is required to provide relief for those transfers which do not meet all the conditions for the relief.
Both the HCA and the DCLG were consulted on the drafting of this Order and are content with the final version.
Detailed proposal
Operative date
The measure will have effect on and after 26 May 2016.
Current law
SDLT was introduced by Part 4 of the Finance Act 2003, replacing stamp duty for most land transactions from 1 December 2003. Section 66(1) provides relief for land transactions entered into between public bodies in connection with a statutory reorganisation. Section 66(2) permits the Treasury to make an Order providing relief where the transaction is effected under a prescribed statutory provision and either the vendor or purchaser is a public body. Sections 66(4) and 66(5) of the Finance Act 2003 defines public bodies.
Proposed revisions
The Finance Act 2003, section 66 (Prescribed Statutory Provisions) Order 2016 (SI 2016/558) which is to take effect on or after 26 May 2016 will provide relief from SDLT for all transfers effected under section 51 and section 53A of Housing and Regeneration Act 2008, where either party to the transaction is a public body.
Summary of impacts
Exchequer impact (£m)
| 2016 to 2017 | 2017 to 2018 | 2018 to 2019 | 2019 to 2020 | 2020 to 2021 |
|---|---|---|---|---|
| nil | nil | nil | nil | nil |
This measure is not expected to have an Exchequer impact.
Economic impact
This measure is not expected to have any significant economic impacts.
Impact on individuals, households and families
There is no impact on individuals, households and families. The measure is not expected to impact on family formation, stability or breakdown.
Equalities impacts
It is not anticipated that there will be any adverse equalities impacts on groups with protected characteristics.
Impact on business including civil society organisations
This measure is expected to have a negligible impact on businesses and civil society organisations. The Order will only apply to public bodies that can acquire land under the HRA 2008, currently only the HCA and the Welsh government.
Operational impact (£m) (HMRC or other)
This measure is not expected to have any significant operational impacts.
Other impacts
Other impacts have been considered and none have been identified.
Monitoring and evaluation
The measure will be monitored as part of HMRC’s normal assurance process.
Further advice
If you have any questions about this change, please contact Anne Berriman on Telephone: 03000 585901 or email: anne.berriman@hmrc.gsi.gov.uk.
Declaration
David Gauke MP, Financial Secretary to the Treasury has read this tax information and impact note and is satisfied that, given the available evidence, it represents a reasonable view of the likely costs, benefits and impacts of the measure.