SDLT Higher Rate Charge and Relief for Homes for Ukraine Sponsorship Scheme

ATED-related SDLT relief and Homes for Ukraine

HMRC says that where a company or other non-natural person bought a dwelling for a qualifying business purpose and claimed relief from the 15% SDLT rate, that relief will not normally be withdrawn just because the property is used under the Homes for Ukraine Sponsorship Scheme. This can also apply while the owner is actively taking steps, without undue delay, to house eligible guests, but simply registering for the scheme is not enough on its own.

• The point applies to dwellings originally bought exclusively for one or more qualifying purposes under Schedule 4A to Finance Act 2003.
• Relief can continue while the property is occupied by individuals under the Homes for Ukraine Sponsorship Scheme, including where they later move to the Ukraine Permission Extension Scheme.
• Relief may also be preserved before occupation starts if the purchaser is taking real steps, without undue delay, to use the dwelling under the scheme.
• Signing up to the scheme alone does not qualify; HMRC expects prompt follow-up action to provide accommodation.
• The protection may not apply if the property is occupied by a non-qualifying individual or if there is unjustified delay.
• HMRC guidance is helpful but fact-sensitive, so keeping clear evidence of registration, actions taken, timing and occupation is important.

Scroll down for the full analysis.

ATED-related SDLT relief and Homes for Ukraine: when relief is not withdrawn

This page explains a narrow but important SDLT point for companies and other non-natural persons that bought a dwelling and claimed relief from the higher 15% SDLT rate because the property was acquired for a qualifying business purpose. The HMRC material says that, in certain circumstances, using the dwelling under the Homes for Ukraine Sponsorship Scheme will not cause that relief to be withdrawn.

What this rule is about

Some purchases of residential property by certain non-natural persons, such as companies, can fall within the higher SDLT charge in Schedule 4A to Finance Act 2003. Relief is available where the dwelling is acquired exclusively for one or more specified purposes set out in paragraph 5 of that Schedule. Broadly, those purposes cover certain genuine commercial or public-facing uses rather than private occupation.

The issue dealt with here is what happens after the purchase. Even if relief was available when the dwelling was acquired, that relief can later be withdrawn if the property stops being held for a qualifying purpose. HMRC’s guidance addresses one specific situation: temporary use connected with the Homes for Ukraine Sponsorship Scheme.

What the official source says

HMRC says that where a dwelling was acquired exclusively for one or more of the paragraph 5 purposes, it will continue to be treated as held for such a purpose, and relief will not be withdrawn under paragraph 5G, during either of the following periods:

• while the dwelling is occupied by one or more individuals under the Homes for Ukraine Sponsorship Scheme, including where those individuals later move onto the Ukraine Permission Extension Scheme, unless the dwelling is occupied by a non-qualifying individual; or
• while the purchaser is taking steps, without undue delay, to use the dwelling as part of the Scheme.

HMRC also makes an important practical point. Simply registering for the Scheme is not enough by itself. The purchaser must follow that registration with further action to accommodate refugee guests without undue delay.

What this means in practice

If a company or other relevant purchaser claimed Schedule 4A relief because it bought a dwelling for a qualifying purpose, allowing occupation under the Homes for Ukraine scheme does not automatically jeopardise that relief. HMRC accepts that the dwelling can still be treated as held for the original qualifying purpose during that period.

This matters because, without that treatment, there could be a risk that the dwelling would no longer be regarded as held exclusively for a qualifying purpose, which could trigger withdrawal of relief.

The protection is not unlimited. Two points matter in particular.

• The occupation must be by individuals under the Homes for Ukraine Sponsorship Scheme, and HMRC extends this to cases where those individuals later move onto the Ukraine Permission Extension Scheme.
• If the dwelling is occupied by a non-qualifying individual, the protection described in the manual does not apply.

The guidance also covers the period before actual occupation, but only where the purchaser is actively taking steps to bring the property into use under the Scheme and is doing so without undue delay.

How to analyse it

A sensible way to approach this issue is to ask the following questions.

• Was the dwelling originally acquired exclusively for one or more of the qualifying purposes in paragraph 5 of Schedule 4A?
• Was relief from the higher Schedule 4A charge claimed on that basis?
• Is the dwelling currently occupied by individuals under the Homes for Ukraine Sponsorship Scheme, or by individuals who entered under that Scheme and later transferred to the Ukraine Permission Extension Scheme?
• If not yet occupied, is the purchaser doing more than merely registering for the Scheme?
• Can the purchaser show concrete steps taken without undue delay to accommodate eligible individuals?
• Is anyone occupying the dwelling who falls outside the class HMRC describes as qualifying for this treatment?

In practice, evidence will matter. A purchaser would usually want a clear timeline showing when it registered, what steps it then took, when the property was made available, and who occupied it.

Example

A company acquires a dwelling for a use that falls within paragraph 5 of Schedule 4A and claims relief from the 15% SDLT charge. Some time later, it makes the property available under the Homes for Ukraine Sponsorship Scheme. The property is then occupied by a Ukrainian family under that Scheme. On HMRC’s published view, the dwelling continues to be treated as held for the qualifying purpose during that occupation, so relief is not withdrawn on that ground.

By contrast, if the company only signs up to the Scheme but then does nothing meaningful for an extended period, HMRC indicates that registration alone would not show it is taking steps without undue delay.

Why this can be difficult in practice

The main difficulty is that the manual gives a helpful principle but not a full legal test for every factual variation.

First, the phrase without undue delay is inherently fact-sensitive. The guidance makes clear that passive registration is not enough, but it does not define exactly how quickly later action must follow or what level of activity will always suffice.

Secondly, the manual refers to occupation by a non-qualifying individual, but this page does not itself define that expression. The answer may depend on the wider legislative context and the detailed facts of occupation.

Thirdly, this is HMRC manual guidance, not the legislation itself. It is useful evidence of HMRC’s approach, but the legal position ultimately depends on Schedule 4A and how the facts fit within it.

Key takeaways

• HMRC accepts that use of a dwelling under the Homes for Ukraine Sponsorship Scheme does not, by itself, cause Schedule 4A relief to be withdrawn.
• This protection can apply both during qualifying occupation and while the purchaser is actively taking steps, without undue delay, to bring the property into use under the Scheme.
• Registration alone is not enough, and the position may become uncertain if there is delay or occupation by someone outside the qualifying category.

This page was last updated on 24 March 2026

Useful article? You may find it helpful to read the original guidance here: SDLT Higher Rate Charge and Relief for Homes for Ukraine Sponsorship Scheme

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