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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: meaning of non-qualifying individual FA03/SCH4A/PARA5A

A non-qualifying individual in relation to a chargeable transaction is one of the following

  1. A purchaser where the chargeable interest is acquired jointly by an individual and a person within the scope of higher rate of SDLT. Joint ownership of the chargeable interest includes any linked transactions between the same vendor and purchaser or persons connected with them.
  2. A purchaser who enters into a transaction as a member of a partnership that is within the scope of the higher rate of SDLT (that is, it has a member who is a company) and has a major share in the partnership. A ‘major share’ in the partnership is defined as being entitled to a 50 per cent or greater interest in the income profits or the assets of the partnership.
  3. An individual (‘a connected person’) who is connected with a person entitled to the interest. ‘Connection’ for these purposes is determined by reference to section 1122 CTA 2010. This is a wide test but is most likely to be relevant where a chargeable interest is held by a company. A company will be connected with any individual who controls that company (or any individual who controls a company with persons who are, in turn, connected to that individual such as family members).
  4. An individual (the ‘relevant settlor’) who is a settlor of a trust of which a trustee is connected with a person entitled to the interest. This is relevant where a trustee - in that capacity - is connected with a person who is acquiring the chargeable interest (for example, where the trustee controls a company which acquires the interest). The settlor of that trust will be a ‘relevant settlor’ and will be a non-qualifying individual.
  5. The spouse or civil partner of a connected person or a relevant settlor.
  6. A relative of a connected person or of a relevant settlor, or the spouse or civil partner of a relative of a connected person or of a relevant settlor. Relative is defined in section 1123 CTA 2010. Broadly it is a ‘brother, sister, ancestor or lineal descendant’.
  7. A relative of the spouse or civil partner of a connected person or of a relevant settlor.
  8. The spouse or civil partner of a person falling within paragraph (7).
  9. An individual who is a major participant in a collective investment scheme which acquires a chargeable interest, or is connected with a major participant in a relevant collective investment scheme. A person will be a ‘major participant’ if he or she is entitled to
* at least 50 per cent of either all the profits or income arising from the scheme or of any profits or income that are to be distributed to the participants in the scheme, or
* 50 per cent or more of the assets that would be available for distribution amongst the participants in the collective investment scheme on its winding up.

If an individual (or a company he or she controls) is a major participant in a scheme, that individual will be a ‘non-qualifying individual’ in respect of any single-dwelling interest acquired for the purposes of the scheme.