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HMRC internal manual

Stamp Duty Land Tax Manual

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: qualifying employee

Where a person is an employee (whether of a company or a partnership) they will qualify unless they are entitled to a 10 per cent or greater share

  • in the income profits of the trade,
  • in any company that is entitled to the single-dwelling interest in question, or
  • in that single-dwelling interest.

An ‘employee’ also includes holders of an office (for example a director or a company secretary).

Regardless of their stake in the business or single-dwelling interest an employee who ‘provides excluded domestic services’ will also fall outside the definition of a qualifying employee.

This will exclude a dwelling which is occupied as living accommodation by a person who provides domestic services in connection with the occupation by an individual who is connected with a person who is, or is to be, beneficially entitled to the higher threshold interest. The living accommodation can be either within the dwelling or in a ‘linked dwelling’.

The definition of a linked dwelling can be found in Sections 116(2) and 117(1) FA 2013 (the Annual Tax on Enveloped Dwellings (ATED) legislation)). See paragraphs 22 and 23 of the ATED Technical Guidance.

This would include an individual who is employed to provide domestic services such as a cleaner, cook or nanny. For example, if Ms R controls a company which owns a dwelling, relief will not be available because that company employs Ms R’s cook who is allowed to occupy the dwelling.