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HMRC internal manual

Stamp Duty Land Tax Manual

From
HM Revenue & Customs
Updated
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Reliefs: Group, reconstruction or acquisition relief

Reconstruction and acquisition relief: Withdrawal: Chargeable amount FA03/SCH7/PARA11(3)

Where it is necessary to withdraw reconstruction or acquisition relief, the amount of relief withdrawn depends on

  • the chargeable interest obtained by the purchaser on the effective date of the original land transaction
  • the chargeable interest held by the purchaser (and any relevant associated company) at the time of the event causing withdrawal of relief

The effect of the withdrawal of relief is to tax the chargeable interest remaining with the purchaser (and any relevant associated company) as if no claim to reconstruction or acquisition relief had been made.

The stamp duty land tax payable is that which would have been payable in respect of the original land transaction for which reconstruction or acquisition relief was claimed.

The chargeable consideration for the transaction is calculated as the market value of the chargeable interest transferred by the original land transaction.

This is modified where the chargeable interest held by the purchaser (and any relevant associated company) at the time reconstruction or acquisition relief is withdrawn is not the same as the chargeable interest transferred by the original land transaction.

In this case the Stamp Duty Land Tax (SDLT) payable is that which would have been payable in respect of an appropriate proportion of the original land transaction for which relief was claimed.

The appropriate proportion is the fraction of the market values of the chargeable interests held by the purchaser and any relevant associated companies at the time of withdrawal of reconstruction or acquisition relief, calculated by reference to the effective date of the relevant land transaction, compared to the market value of the chargeable interest obtained by the purchaser at the effective date of the relevant land transaction.