Freeports and Investment Zones: 100% Relief for Qualifying Land Transactions

When full Freeports or Investment Zones SDLT relief can apply to a mixed land purchase

If a land purchase includes both qualifying and non-qualifying land, full SDLT relief may still be available where at least 90% of the total price is fairly attributable to the qualifying land. The test is based on value, not acreage, so a proper and defensible apportionment of the price is essential.

• All of the consideration can qualify for relief if 90% or more of the purchase price is attributable to qualifying land.
• The price must be apportioned on a just and reasonable basis, usually by reference to market value rather than land area alone.
• A smaller part of the site can still represent most of the value, so acreage on its own may give the wrong answer.
• If the qualifying land accounts for less than 90% of the price, this full-relief rule does not apply.
• Buyers should keep clear evidence for the valuation, the contract price split, the land’s location within the tax site, and the intended qualifying use.

Scroll down for the full analysis.

When 100% Freeports or Investment Zones SDLT relief can apply to a mixed land purchase

This page explains a narrow but important rule in the Freeports and Investment Zones relief provisions for SDLT. It deals with purchases where only part of the land is “qualifying land”. In some cases, the buyer can still get relief on the whole purchase price, not just the qualifying part. The key question is whether at least 90% of the consideration is attributable to qualifying land.

What this rule is about

Freeports and Investment Zones relief is aimed at land acquired for use in a qualifying way within a designated special tax site. In practice, a single transaction may include a mixture of land: some may fall within the designated site and meet the qualifying conditions, while some may not.

This rule addresses that mixed-purchase situation. It sets a threshold test. If enough of the price is properly attributable to qualifying land, the legislation treats all of the consideration for the transaction as qualifying for relief.

That matters because it can turn a partly relieved transaction into a fully relieved one.

What the official source says

The official material says that all of the consideration for a land transaction qualifies for relief if 90% or more of the consideration is attributable to “qualifying land”.

It also says that the consideration must be attributed to qualifying land on a just and reasonable basis.

The example given is:

• A buyer acquires 25 acres for £2,500,000.
• 20 acres are inside the designated special tax site and are intended for qualifying use, so those 20 acres are qualifying land.
• 5 acres are outside the special tax site and do not qualify.
• On a just and reasonable valuation basis, £2,375,000 of the £2,500,000 price is attributable to the 20 qualifying acres.
• That is 95% of the total consideration.
• Because at least 90% is attributable to qualifying land, relief is available for the whole £2,500,000.

What this means in practice

The 90% test is about value, not simply area.

A buyer does not ask only how much of the land by acreage is qualifying. The real question is how much of the purchase price is fairly attributable to the qualifying land. A smaller area of land may represent most of the value. Equally, a large area may represent less value if it is less useful, less developable, or otherwise worth less.

If the qualifying land accounts for 90% or more of the consideration, the relief can cover the entire transaction consideration. If it does not, this specific full-relief rule is not met.

This makes valuation and apportionment central in mixed transactions. The buyer needs to be able to support why a particular share of the price is attributed to the qualifying land.

How to analyse it

A sensible way to approach this issue is:

• Identify which parts of the land are “qualifying land” under the relief rules. The source material assumes that land inside the designated special tax site and intended for qualifying use can count as qualifying land.
• Identify any land in the same transaction that is not qualifying land.
• Apportion the total consideration between the qualifying and non-qualifying land.
• Make that apportionment on a just and reasonable basis. This is not a mechanical acreage split unless acreage genuinely reflects value.
• Check whether the amount attributed to qualifying land is at least 90% of the total consideration.
• If yes, all of the consideration qualifies for relief under this rule.

Questions worth asking include:

• What evidence supports the valuation of the qualifying and non-qualifying parts?
• Does the contract allocate price between different parcels, and if so, is that allocation commercially credible?
• Are there features that make one part of the site much more valuable than another?
• Is the intended use of the land clearly documented, especially for the part said to be qualifying land?

Example

Illustration: A company buys a site for a single price. Most of the commercially valuable development land is within the designated tax site and is intended for a qualifying use. A small strip of land outside the site is included in the same purchase, but it has relatively little value. If a just and reasonable apportionment shows that 92% of the total price is attributable to the qualifying land, the whole purchase price can fall within the relief under this rule.

By contrast, if the qualifying land represents only 85% of the price on a just and reasonable basis, this full-relief rule would not be satisfied.

Why this can be difficult in practice

The main difficulty is the phrase “just and reasonable basis”. The source material does not prescribe a single valuation method. That means the answer may depend on the facts and on the quality of the evidence.

There can also be a temptation to focus too heavily on acreage. The example shows why that can be misleading: 20 out of 25 acres is 80% by area, but 95% by value. The legal test is concerned with attribution of consideration, not land area alone.

Another practical issue is that this rule only helps once land has first been identified as qualifying land. If there is uncertainty about whether land is within the designated site or whether the intended use is qualifying, the valuation exercise does not resolve that underlying point.

Finally, where one price is paid for a package of land, any apportionment should be defensible. A figure inserted into transaction documents is not necessarily enough on its own if it does not reflect the real economics of the deal.

Key takeaways

• A mixed land purchase can still get full relief if at least 90% of the consideration is attributable to qualifying land.
• The attribution must be made on a just and reasonable basis, which usually means a proper value-based apportionment.
• The test looks at the share of the price attributable to qualifying land, not simply the percentage of the site by area.

This page was last updated on 24 March 2026

Useful article? You may find it helpful to read the original guidance here: Freeports and Investment Zones: 100% Relief for Qualifying Land Transactions

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