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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 in case of relocation of employment FA03/SCH6A/PARA6

Where a property trader purchases a dwelling from an individual, whether they are aloneor with other individuals, the purchase will be exempt from Stamp Duty Land Tax if all ofthe following conditions are met

  • the acquisition is made in the course of a business that consists of or includes acquiring dwellings from individuals where they change residence because of a relocation of employment
  • the individual occupied the old dwelling as their main or only residence at some time in the two years to the date of purchase
  • the purchase is made because the employee had to change residence due to a job relocation
  • the purchase price does not exceed the market value
  • the area of land acquired by the property trader does not exceed the permitted area

Where it is determined that the land acquired 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.

See SDLTM21010 for definitions of the above criteria.

Relocation of employment means a change of the individual’s place of employment dueto the individual

  • becoming an employee of the employer
  • changing their duties with the employer
  • changing the place where they work for the employer

A change of residence is one arising from a relocation of employment if the change ismade wholly or mainly to allow the individual to have their residence within a reasonabledaily travelling distance of their new place of work.

The individual may need to change their place of residence because where they used to liveis not within a reasonable daily travelling distance of their new place of work.

A new place of work means the place where the individual normally performs the duties oftheir employment after the relocation.

Relief under this section will be withdrawn if the property trader

  • spends mores than the permitted amount on refurbishment of the dwelling
  • grants a lease or licence of the dwelling
  • permits any of its principals or employees, or any person connected with any of its principals or employees, to occupy the dwelling

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.