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HMRC internal manual

Stamp Duty Land Tax Manual

Reliefs: Right to buy transactions, shared ownership leases etc: Rent to shared ownership trust: treatment of transactions FA03/SCH9/PARA14

FA03/SCH9/PARA13 applies similar provisions to a rent to shared ownership trust scheme as apply to a rent to shared ownership lease scheme - see FA03/SCH9/PARA13.

A “rent to shared ownership trust scheme” means a scheme under which a person or persons may become a beneficiary (“the purchaser”) under a shared ownership trust with a qualifying body (“the social landlord”) and that body grants to the person or persons an assured shorthold tenancy of the dwelling.

“May be granted” includes cases where

  • the terms of the scheme entitle the person or persons to apply to become a beneficiary under a shared ownership trust, subject to an assessment of their financial circumstances, or
  • the person or persons have a contractual or other right to become a beneficiary under a shared ownership trust: for example, where a contract is in place but has not been completed.

Transactions between the qualifying body and the person or persons (or any of them) under these schemes are treated as not linked for the purposes of FA03/S108. This includes

  • the grant of an assured shorthold tenancy,
  • the declaration of a shared ownership trust and
  • any other land transaction (e.g. an option) entered into as part of the scheme.

The person or persons’ possession of the dwelling under the assured shorthold tenancy is disregarded in determining the effective date of the declaration of the shared ownership trust under FA03/S44. So, even if the person takes possession under an assured shorthold tenancy after contracts are exchanged but before the trust is declared, the effective date will still be the date on which the trust is declared.

(Substantial performance is not triggered in any event if the person already occupies the property under the assured shorthold tenancy when contracts are exchanged - see SDLTM07900.)