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HMRC internal manual

Stamp Duty Land Tax Manual

HM Revenue & Customs
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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: financial institutions acquiring dwellings in the course of lending FA03/SCH4A/PARA5C

The 15 per cent higher rate charge will not apply to a transaction which meets the conditions set out below. 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 (SDLTM09670) below apply.

For the transaction to be charged at the standard rates of SDLT, the subject matter of the transaction must include a higher threshold interest that is acquired in the course of the financial institution’s business of lending money and which is acquired

  • for the purpose of resale in the course of that business, and
  • in connection with those lending activities.

A financial institution is defined for this purpose as in section 564B Income Tax Act 2007 but excluding a person referred to in section 564B(1)(d) (that is, a person authorised by a licence under Part 3 of the Consumer Credit Act 1974 to carry on a consumer credit business or consumer hire business within the meaning of that Act).

This includes, broadly

  • a bank,
  • a building society,
  • a wholly-owned subsidiary of a bank or of a building society,
  • a bond-issuer,
  • a person authorised in a jurisdiction outside the United Kingdom to receive deposits or other repayable funds from the public and to grant credits for its own account,
  • an insurance company, or
  • a person who is authorised in a jurisdiction outside the United Kingdom to carry on a business which consists of effecting or carrying out contracts of insurance or substantially similar business.

It does not include an insurance special purpose vehicle (see CFM44030).

If there is any doubt about whether a person is a financial institution for this purpose, please enquire in writing to the Guidance and Technical Team, HMRC Birmingham Stamp Taxes, Floor 9, City Centre House, 30 Union Street, Birmingham B2 4AR (DX 15001 Birmingham 1).