Reliefs: Certain acquisitions of residential property
Acquisition by property trader from individual where chain of transactions breaks downFA03/SCH6A/PARA4
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
- the individual has made arrangements to sell the old dwelling and acquire another dwelling
- the arrangements to sell the old dwelling fail
- the acquisition of the old dwelling is made for the purposes of enabling the individual’s acquisition of the other dwelling to proceed
and the following conditions are met
- the property trader makes the acquisition in the course of a business that consists of or includes acquiring dwellings from individuals in the above circumstances
- the individual
- occupied the old dwelling as their main or only residence at some time in the two years prior to the date of purchase by the property trader
- intends to occupy the other 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 longas the other conditions detailed above are fulfilled partial relief may be claimed.
Where partial relief is claimed, part of the consideration for the acquisition becomeschargeable.
The amount of chargeable consideration is the difference between the market value of thepermitted area, that is the old dwelling and grounds allowed and the total market value ofthe old dwelling, including all the land.
Relief under this section will be withdrawn if the property trader
- spends mores than the permitted amount on refurbishment of the old dwelling
- grants a lease or licence of the old dwelling
- permits any of its principals or employees, or any person connected with any of its principals 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 theproperty 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this relief will not be unavailable or withdrawn.