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HMRC internal manual

Stamp Duty Land Tax Manual

Reliefs: Charities relief

Circumstances where relief is available where a charity or charitable trust holds the greater part of the land FA03/SCH8/PARA3: Examples

Example 1: The greater part relates to the monetary value of the part of the land disposed rather than the surface area

A charity buys a five-storey office block and intends to dispose of the top three floors at the time of acquisition.

For whatever reason the ground and first floors represent 55% of the total monetary value of the block with the remaining upper three floors representing 45%.

The charity would qualify for relief as it intended to hold the greater part of the land, even though in terms of floor space it would have disposed of more than half.

Example 2: When there is a clawback, it is only in respect of the proportion that has been disposed of

A charity buys a housing development with 10 equal residential units for a total of £1m with the intention to dispose of three of these units on the open market.

The charity would initially gain full stamp duty land tax charity relief on the whole £1m purchase price.

When the charity disposes of the three units, a clawback of relief on the £300,000 apportioned value of the three units is made.

The clawback would be taxed at the rate appropriate to the whole initial consideration i.e. 4% stamp duty land tax on the £300,000 proportion attributed to the units would mean £12,000 clawed-back Tax