HMRC SDLT: Stamp Duty Relief for Homes for Ukraine Sponsorship Scheme Explained
Stamp Duty Land Tax Relief for ‘Homes for Ukraine’ Sponsorship Scheme
The ‘Homes for Ukraine’ Sponsorship Scheme enables individuals and organisations in the UK to provide refuge for Ukrainians, including those without family ties in the UK. Under this scheme, relief from the 17% higher rate Stamp Duty Land Tax (SDLT) charge is available when a property is acquired solely for specific purposes. This relief is applicable even if the property is later used to accommodate individuals under the scheme, provided they are not non-qualifying individuals. The relief is not applicable if the property is occupied by non-qualifying individuals. This policy is effective for transactions dated on or after 31 March 2022.
- The scheme allows UK entities to sponsor Ukrainians for safety.
- Relief is available from the 17% higher SDLT rate for certain acquisitions.
- Relief applies if the property is used under the scheme for qualifying individuals.
- Non-qualifying individuals occupying the property disqualify it from relief.
- The policy is effective for transactions from 31 March 2022 onwards.
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Read the original guidance here:
HMRC SDLT: Stamp Duty Relief for Homes for Ukraine Sponsorship Scheme Explained
Understanding the Higher Rate Charge for Stamp Duty Land Tax (SDLT) Related to the Homes for Ukraine Sponsorship Scheme
What is the Homes for Ukraine Sponsorship Scheme?
The Homes for Ukraine Sponsorship Scheme is an initiative that enables people, charities, community organisations, and businesses in the UK to support Ukrainians seeking safety. This includes individuals who do not have any family connections in the UK.
For more detailed information about the Scheme, you can visit the official government website at Homes for Ukraine Scheme Launches.
Relief from the Higher Rate Charge
When acquiring a residential property, there may be a higher rate charge of 15%. However, relief from this charge can be applicable under certain circumstances. This relief is typically available when a property is bought solely for specific reasons outlined in Paragraph 5 of Schedule 4A. For further details, you can view specific guidance on this at SDLTM09555 through SDLTM09570.
Important points to consider for availing this relief:
– The relief applies if the property is intended to serve one or more of the listed purposes in Paragraph 5 at the time of the transaction.
– If you acquire a property with the primary aim of meeting the objectives of the Homes for Ukraine Sponsorship Scheme, additional intentions to allow other individuals to occupy the property who do not qualify can be disregarded.
For detailed information regarding how this relief interacts with the higher rate charge situation, please refer to SDLTM09656.
When Does this Change Take Effect?
The recent changes regarding the relief from the higher rate charge apply to any land transactions that have an effective date from 31 March 2022 onward.
Key Concepts Explained
To better understand the guidance on Stamp Duty Land Tax, here are some key concepts:
– Stamp Duty Land Tax (SDLT): This is a tax that buyers need to pay when purchasing a property in England and Northern Ireland. The amount of tax owed can vary depending on the property’s purchase price and whether it is a residential or non-residential property.
– Higher Rate Charge: This refers to an additional charge that applies in specific situations, which can significantly increase the amount of SDLT you must pay. For example, if a property is being bought by certain non-natural people, like companies, the higher rate could apply.
– Relief from SDLT: Certain conditions or situations may allow buyers to request a reduction or exemption from SDLT, lowering their financial liability when completing property transactions.
– Non-qualifying Individuals: This term relates to individuals who do not meet the specific criteria defined by HMRC to qualify for the property relief under the Scheme.
Example Scenario
To illustrate, let’s consider a practical example of how the relief under the Homes for Ukraine Sponsorship Scheme works:
– A charity decides to purchase a residential property to accommodate Ukrainian refugees under the Homes for Ukraine Sponsorship Scheme. The primary intention of the charity is to meet the needs of these individuals.
– At the time of purchasing the property, the charity intends to use it solely for refugee accommodation.
– Because the charity’s intention aligns with the defined purposes laid out in Schedule 4A, they can claim relief from the 15% higher rate charge. If the charity later decides to let other individuals move into the property who do not meet the qualification criteria, this won’t affect their eligibility for relief since the initial intent was to support Ukrainian refugees.
Important Considerations
If you are considering purchasing a property under this Scheme, keep the following points in mind:
– Document Your Intentions: Keep records and documentation showing that the property is acquired for the purposes of the Homes for Ukraine Sponsorship Scheme. This can help substantiate your claim for relief should HMRC inquire.
– Review eligibility: Before proceeding, make sure to confirm that you fall within the eligible categories defined by the Scheme. Understanding who does not qualify is just as important as knowing who does.
– Seek Professional Advice: Due to the complexities involved in tax matters, it’s advisable to seek assistance from a tax professional or solicitor who is experienced in SDLT matters and aware of the latest changes and reliefs available.
Conclusion on Next Steps
Once you have acquired the property and ensured that you have documented your intent to use it for the Homes for Ukraine Sponsorship Scheme, it will be necessary to work through the SDLT process. You will need to:
– Submit the proper forms to HMRC
– Ensure you apply for the correct relief, if applicable
– Keep records of all communications and documents related to the property acquisition
By being thorough and informed, you can simplify the process of managing Stamp Duty Land Tax charges when participating in initiatives like the Homes for Ukraine Sponsorship Scheme.
Useful article? You may find it helpful to read the original guidance here: HMRC SDLT: Stamp Duty Relief for Homes for Ukraine Sponsorship Scheme Explained
