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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: alternative finance arrangements - withdrawal of relief FA03/SCH4A/PARAS 6D-6H

As with transactions where alternative finance arrangements are not used, there is a control period of three years beginning with the effective date of the transaction. The same rules apply for the withdrawal of relief.

In all cases the situation, must be viewed from the perspective of the ‘relevant person’, that is to say the person, other than the financial institution, who has entered into the alternative finance arrangements. This includes considerations of whether a change of circumstances was foreseen and whether it is beyond the control of the relevant person.

In the case of a relevant interest held for a business of letting, trading in or redeveloping properties, the relevant interest must be held by the relevant person throughout the control period. A ‘relevant interest’ means

  • the interest acquired under the ‘second transaction’,
  • the interest purchased in common by a financial institution and another person,
  • any interest transferred to the relevant person as a result of the exercising of rights under the alternative finance arrangements, or
  • any chargeable interest derived from any of these interests.

The obligation to make a further return when withdrawal conditions apply rests with the relevant person, not with the financial institution (which in many cases may have made the return for the first transaction).