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Stamp Duty Land Tax Relief for Charities

on Saturday, 02 March 2024.

This article explains how charities can benefit from Stamp Duty Land Tax relief.

What is Stamp Duty Land Tax?

Stamp Duty Land Tax (SDLT) is payable when property or land in England or Northern Ireland is purchased for over a certain threshold. For non-residential land, this is currently set at £150,000. The payment must be made within 14 days of completion otherwise you may be liable to penalties and interest. The tax is due for a range of transactions including: the purchase of a freehold property; the purchase of a new or existing leasehold (over seven years); and the exchange of land.

When is relief available and what are the conditions for relief?

SDLT relief is available for a charity or a charitable trust which purchases an interest in land, subject to certain conditions.

The relief is available on the purchase as long as the reason for holding the interest is for a qualifying charitable purpose.

Two conditions must be met:

1.- The land or property held for charitable purposes must either be used:

  • To further the charitable purpose of the purchaser or another charity
  • As an investment with the profits generated from the interest being applied to the charitable purposes of the purchaser

2- The purpose of the transaction must not be for the intention of avoiding SDLT either by the purchaser or any other person

HMRC's ability to withdraw relief

If within three years of the transaction, the charity still owns the land and uses the property for purposes other than charitable or the charity ceases to be a charity, HMRC can withdraw the relief previously granted on the transaction. The position is the same for charitable trusts. This means that tax would be payable at that point.

If you are a charity or charitable trust who would like advice in regards to the points raised in this article please contact Sarah Outram in our Charities team on 07468 698967, or complete the form below.

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