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HMRC internal manual

Stamp Duty Land Tax Manual

Reliefs: Charities relief: Detailed rules to qualify for the relief FA03/SCH8/PARA1

Relief from Stamp Duty Land Tax (SDLT) is available to charities on the purchase of a chargeable interest that they intend to hold for qualifying charitable purposes. The purchasing charity must intend to hold the chargeable interest for qualifying charitable purposes. This means:

  • for use in the furtherance of the charitable purposes of the purchaser or another charity
  • as an investment, the profits of which are applied to the charitable purposes of the purchaser
  • that the transaction must not have been entered into for the purposes of avoiding SDLT by either the purchaser or any other person.

Following the definition in FA10/SCH6, to qualify for relief a charity must:

  • be established for charitable purposes only
  • be subject to the courts in

    • the UK or
    • another member EU member State or
    • Iceland or
    • Norway
  • be registered if required to do so by the laws of the territory in which it is situated
  • be administered or controlled by “fit for purpose “ persons

Full guidance on the “fit for purpose” persons test can be found on the website at https://www.gov.uk/government/publications/charities-detailed-guidance-notes/chapter-2-applications-for-recognition-as-a-charity-for-tax-purposes

If the purchaser’s national administration issues a charity reference or similar identification number, please enter it at part 3 of Question 9. A non UK Charity should get a charity reference number from HMRC (HMRC website).

(see https://www.gov.uk/charities-and-tax/get-recognition

These restrictions are not meant to restrict the genuine use by charities of properties they purchase for charitable purposes and most charities will have no difficulty in fulfilling these conditions.

See SDLTM26010a, example where a dwelling is provided to a vicar or priest.