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HMRC internal manual

Stamp Duty Land Tax Manual

Scope: How much is chargeable: Non-cash consideration: Construction or similar works FA03/SCH4/PARA10: Example 3

Example 3

Company A enters into a contract with B to purchase a freehold plot of land, the consideration for the transaction is £1m.

Prior to completion A goes onto the land to be acquired (under a licence to occupy) and begins construction works.

When A goes onto the land, he has substantially performed the contract. The transaction should be notified on an SDLT1 at the date of entry being the effective date, paying the SDLT due on the consideration of £1m.

On completion, a further return need only be made when there are any changes to the transaction between substantial performance and completion that affect the tax due. The construction works will not be chargeable consideration as they were carried out after the effective date (date of substantial performance is the effective date in this instance) on land acquired by the purchaser under the transaction.

Please note that in situations where notification by SDLT1 is required both at substantial performance and upon completion by virtue of FA03/S44(8) then if condition one is met at first notification then it is met for the second notification as well by virtue of FA03/SCH4/PARA10(2A).