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HMRC internal manual

Stamp Duty Land Tax Manual

From
HM Revenue & Customs
Updated
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Scope: when is Stamp Duty Land Tax (SDLT) chargeable: higher rate charge for acquisitions of residential property by certain non-natural persons FA03/S55/SCH4A:

Acquisition for resale in the course of a property development trade where the transaction is part of a qualifying exchange FA03/SCH4A/PARA5

Where a chargeable interest is acquired exclusively for resale in the course of a property development trade as part of a qualifying exchange, the 15 per cent higher rate charge will not apply to the transaction. Instead, SDLT will be charged at the standard rates.

However, a further return and payment of additional SDLT will be required if the relevant rules in Withdrawal of relief (SDLTM09660) below apply.

Being part of a qualifying exchange for this purposes has the same meaning as for ATED - see FA13/S139(4). In other words

  • the acquisition of the single dwelling interest must be made by way of transfer (that is, not by grant of a lease),
  • the person from whom the acquisition was made must have acquired (by way of grant or transfer) a chargeable interest in or over a new dwelling from the person undertaking the property development trade and
  • each of those acquisitions must have been entered into in consideration of the other.

A ‘new dwelling’ is one that has been constructed and not previously occupied or has been adapted to be a single dwelling but has not been occupied since the work required to adapt it has been completed.

The property developer’s acquisition of the single dwelling interest in these circumstances is called the ‘reverse acquisition’ and the interest is known as the ‘returned interest’.