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HMRC internal manual

Stamp Duty Land Tax Manual

From
HM Revenue & Customs
Updated
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Reliefs: Certain acquisitions of residential property

Acquisition by property trader from individual acquiring new dwelling FA03/SCH6A/PARA2

Where a property trader

  • purchases a dwelling, the old dwelling
  • from an individual, whether that person acts alone or with other individuals

The purchase will be exempt from Stamp Duty Land Tax if all of the following conditions are met

  • the purchase is in the course of a business that consists of or includes acquiring dwellings from individuals who have acquired a new dwelling from a house building company
  • the individual   - Occupied the old dwelling as their main or only residence at some time in the two years prior to the date of acquisition

                                - acquires a new dwelling for a house-building company

                                - Intends to occupy the new dwelling as their only or main residence

The area of land acquired by the property trader does not exceed the permitted area.

 

Where the land acquired by the property trader is more than the permitted area, as long as the other conditions above are fulfilled partial relief may be claimed.

Where partial relief is claimed, part of the consideration for the acquisition becomes chargeable.

The amount of chargeable consideration is the difference between the market value of the permitted area, that is the old dwelling and grounds allowed, and the total market value of the old dwelling including all the land.

Relief under this section will be withdrawn if the property trader

  • spends more than the permitted amount on refubishment of the old dwelling

  • grants a lease or licence of the old dwelling

  • permits any of it’s principles or employees, or any person connected with any of it’s principles or employees, to occupy the old dwelling

See SDLTM21010 for definitions of the above criteria.

N.B. when the effective date of a land transaction occurs after 22 July 2004 and the property trader

  • intends to grant a lease or licence to the individual to occupy the old dwelling for no more than six months
  • grants such a lease or licence after the acquisition of the old dwelling

this relief will not be unavailable or withdrawn.