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HMRC internal manual

Stamp Duty Land Tax Manual

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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: dwellings for occupation by certain employees and partners FA03/SCH4A/PARA5D

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 (SDLTM09675) below apply.

For the transaction to be charged at the standard rates of SDLT the subject matter must include a higher threshold interest that meets the following conditions

  • the purchaser, or a relevant group member, is carrying on a trade on a commercial basis with a view to profit,
  • the dwelling is acquired to be made available to qualifying employees or partners to use as living accommodation, and
  • the dwelling is made available solely or mainly for the purposes of the trade carried on by the purchaser or a relevant group member.

It is not necessary for specific qualifying employees and partners to have been identified at the effective date of the transaction. Further, the fact that the dwelling is to be occupied by individuals other than just the qualifying employee or partner will not impact on the dis-application of the 15 per cent rate from the transaction, so long as those individuals are occupying the dwelling as part of that employee or partner’s family.

In certain situations, a dwelling may be owned by a trading business to provide living accommodation to employees. For example, a multinational company may own a flat in London which is made available as accommodation for employees from foreign offices who are visiting the UK for short periods of time or who are seconded to the UK.

Conditions for this relief look at what may be termed the ‘holding structure’, and also to the individuals allowed into occupation of the dwelling.

Where the person is a company, a ‘relevant group member’ is simply a company which is within the same SDLT group (see SDLTM23020).

The dwelling must be held for the purposes of providing ‘qualifying employees’ or ‘qualifying partners’ with living accommodation.