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HMRC internal manual

Stamp Duty Land Tax Manual

Reliefs: Right to buy transactions, shared ownership leases etc: Shared ownership trust: election for market value treatment FA03/SCH9/PARA9-10

Purchasers under a shared ownership trust may make a market value election analogous to that for a shared ownership lease.

Please note that FA03/SCH9/PARA7(5) disapplies the definition of market value in FA03/S118 for this purpose, the effect being that the market value is computed on a vacant possession basis.

The election is made in the land transaction return submitted in respect of the declaration of the shared ownership trust by showing the market value as the consideration, or an amendment to that return changing the consideration to the market value. If the election is made by amendment it must be made within 12 months of the filing date.

The election is irrevocable, that is, once made it cannot be changed, even by an amendment (or further amendment) to the return.

The effect of a valid election under FA03/SCH9/PARA9 is that

  • the chargeable consideration for the declaration of the shared ownership trust is the sum specified in the terms of the trust, equating or relating to the market value of the dwelling, by reference to which the initial capital is calculated
  • no account is taken of rent-equivalent payments for stamp duty land tax purposes.

Further, provided that any tax chargeable in respect of the declaration of the shared ownership trust has been paid,

  • equity-acquisition payments, and the consequent increases in the purchaser’s beneficial interest and
  • the transfer to the purchaser of an interest in the trust property on termination of the trust

are exempt from charge.