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HMRC internal manual

Stamp Duty Land Tax Manual

HM Revenue & Customs
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Reliefs: Alternative property finance

General overview and definitions FA03/S71A, FA03/S72, FA03/S72A and FA03/S73

Relief from multiple charges to stamp duty land tax is available for three types ofalternative property finance scheme, one of which has two variants.

The result is that the stamp duty land tax payable is in line with that which would bepayable if a property was purchased using a conventional mortgage product.

These reliefs are available to persons using alternative property financing arrangements.

Where relief is claimed a land transaction return must be completed claiming the reliefand showing the chargeable consideration as the price that has been agreed between theparties to the transaction.

Land purchased by financial institution and leased to, or, in Scotland, occupied by,person - This scheme receives relief across the entire UK. A person(s) enters intoarrangements with a financial institution whereby the financial institution purchases theproperty and grants the person a long lease with an option to have the reversion, inScotland, ownership, transferred.

The person makes regular payments during the term of the lease. At the end of the lease,the person can exercise their right and have the reversion, in Scotland, ownership,transferred to themselves. See SDLTM28100 and SDLTM28200.

In England & Wales and Northern Ireland a variant of this scheme is relieved. Aproperty can be held in trust for the financial institution and the person as beneficialtenants in common.

The beneficial ownership can be transferred in any number of transactions to the tenantduring the course of the lease. The right to have the reversion transferred at the end ofthe agreement is maintained. See SDLTM28100.

A separate scheme is relieved in Scotland. The person and the financial institutionpurchase a major interest as owners in common.

The person has a right to exclusive occupation during the time of common ownership. Theperson has the right to require the institution to transfer to them the whole interest.See SDLTM28300.

Land purchased by financial institution and re-sold to person - This relief is availableto schemes anywhere in the UK.

A person(s) enters into arrangements with a financial institution whereby the financialinstitution purchases a property for £100,000 and sells it to them for £225,000. Theythen pay this amount to the financial institution in instalments. See SDLTM28400.


A financial institution means

  • the same as in FA05/S46, see CFM6086.

Legal mortgage

  • for land in England & Wales, this means a legal mortgage as defined in section 205(1)(xvi) of the Law of Property Act 1925
  • for land in Scotland, this means a standard security
  • for land in Northern Ireland, this means a mortgage by conveyance of a legal estate or by demise or sub-demise or a charge by way of legal mortgage