Non-UK resident stamp duty: whose residence counts in a trust?
Whose residence counts?
For some trust purchases, SDLT tests the beneficiary’s residence instead of the trustee’s when deciding whether the non-resident increase applies.
- Bare trusts have a special rule for new leases.
- Some settlement trusts use the beneficiary’s status.
- Unit trust schemes are excluded.
Scroll down for the full analysis.
Read the original guidance here:
Non-UK resident stamp duty: whose residence counts in a trust?
Non-UK resident stamp duty: whose residence counts in a trust?
When a trust buys a home, the non-UK resident stamp duty increase may depend on the person who benefits from the trust rather than the trustee who signs.
This is a narrow rule. It matters for a new lease held on a bare trust and for some settlement trusts. It does not settle every stamp duty question.
What this rule is about
Trusts separate ownership from beneficial rights.
That makes the usual question, “where does the buyer live?”, less simple. For the non-resident SDLT increase, Parliament gives special directions for two types of trust. The key is to identify the trust first. Labels alone are not enough.
What the official source says
HMRC’s manual says that, in the cases below, the residence test concerns the beneficiary rather than the trustee. The manual is HMRC’s view, not the law itself. The legislation sets the limits.
In each case, only after identifying the trust type, the property interest, and the beneficiary’s relevant rights does this determine whether the purchase is a non-resident transaction for the increased-rate rules. Nothing else follows from it.
- For a bare trust, the rule applies only where the purchase is the grant of a lease of one or more homes.
- At least one buyer must be a bare trustee.
- The special lease rule for bare trustees in Schedule 16 must apply.
- When those points are met, test the residence of the beneficiary or beneficiaries, not the trustee.
- In a settlement trust, the buyer must be a trustee of a trust that is not bare.
- A beneficiary must have the required right to occupy the home or receive income from it.
- In that case, use the beneficiary’s residence status for the non-resident test.
- A unit trust scheme does not use this settlement-trust rule.
What this means in practice
A UK trustee cannot prevent the increase. Nor does an overseas trustee cause it.
The beneficiary may be the person whose position matters. Where the beneficiary’s status supplies the test, the SDLT result may differ even though the trustee still handles both the purchase and the return throughout. The roles remain separate.
- Read the trust deed before deciding whose residence status to use.
- For a bare trust buying a new lease, focus on the beneficiary.
- For a qualifying life-interest or income trust, focus on the beneficiary.
- Keep the trustee’s SDLT filing role separate from the residence test.
- Do not use the paragraph 14 rule if the trust is a unit trust scheme.
How to analyse it
Begin with the property deal, then examine the trust. The order matters.
A trust may seem informal in conversation but confer very specific rights on paper. What actually decides it? The legal terms of the trust, the type of property interest being bought, and the beneficiary’s rights at the relevant time.
- Check that the purchase is within the SDLT rules for England or Northern Ireland.
- Identify whether it involves a home and whether it is a freehold or a new lease.
- Find out whether the trust is bare or a settlement.
- For a bare trust, check Schedule 16’s rule on the trustee buying a new lease.
- For a settlement, identify any person entitled to live in the home for life.
- Also check whether anyone is entitled to income from the home.
- Confirm whether the arrangement is a unit trust scheme.
- Only then apply the residence test to the person specified by the relevant rule.
Example
Vincent and Josephine are trustees of a bare trust. Davina is its only beneficiary.
Because they are trustees acting with trust money, on 1 May 2027 they take a new 25-year lease of a Northern Ireland home for £60,000.
Davina’s residence is tested.
Because this is a new lease and the trustees act for a bare trust, the residence test is applied to Davina, not Vincent or Josephine. The facts given do not allow a final SDLT amount to be calculated.
Why this can be difficult in practice
Attention often settles on the name shown on the lease or transfer, although that name may identify the wrong person for this test. It can mislead.
Trust rights can change over time. A right to income, a right to live in a home, and a future hope of receiving property are not necessarily the same thing.
- A trust called a “family trust” is not automatically a settlement for this rule.
- A trust described as bare may not be bare where the beneficiary lacks an absolute right to the property.
- A beneficiary’s right must be checked against the actual trust documents.
- Several beneficiaries may need to be considered.
- A lease assignment is not necessarily a grant of a new lease.
- The unit trust exclusion can change the route through the rules.
- The official example is dated 2027, after the supplied statutory material’s currency date.
Key takeaways
- A trustee’s residence is not always the one that counts.
- New leases held through bare trusts have a specific rule.
- Some settlement trusts use the beneficiary’s residence status.
- Unit trusts are excluded from the settlement-trust rule.
Technical analysis
For advisers, and for anyone who wants to check the law behind this page. You do not need this section to understand the guidance above.
Legislation
- FA 2003 Schedule 9A para 4 — test for a non-resident transaction
- FA 2003 Schedule 9A para 13 — bare trusts taking new home leases
- FA 2003 Schedule 9A para 14 — settlement trusts with beneficiary interests
- FA 2003 Schedule 16 para 3 — bare trustees taking or granting leases
- FA 2003 Schedule 16 para 4 — settlement trustees treated as full buyers
- FA 2003 Schedule 16 para 6 — which settlement trustees may file returns
- FA 2003 section 101 — unit trust schemes treated as companies
Official guidance
The pages below are HMRC’s guidance. Guidance is not law. It sets out how HMRC reads the legislation, and it is not binding on you, on a tribunal or on a court. Where guidance and the legislation differ, the legislation wins. HMRC can also change or withdraw guidance, and it may not cover your facts.
Where this is not settled
- The supplied statutory material is current only to 30 January 2026 for Schedule 4ZA material and 17 November 2025 for the wider Act. The official example uses a 2027 purchase, so the law in force on that date must be checked against current legislation.
- Whether a trust is bare, whether a beneficiary has the required right, and whether an arrangement is a unit trust can depend on the trust deed and the facts.
Evidence you would need
This kind of case is decided on the facts of the individual property. These are the records that usually settle it, and the ones an adviser would ask you for.
- The signed trust deed and any later changes
- Details of each beneficiary and their rights
- The lease or transfer document
- The completion date
- Evidence relevant to each beneficiary’s residence status
- Confirmation of whether the arrangement is a unit trust scheme
Explore this with an AI
Readers often want to test their own situation. Copy the prompt below into ChatGPT, Claude or Gemini. It hands the model the actual legislation for this page rather than letting it answer from memory, and tells it to be explicit about what is uncertain. What comes back is information, not advice – check it against the links above.
I am researching UK Stamp Duty Land Tax (SDLT), which applies in England and Northern Ireland. MY QUESTION Non-UK resident stamp duty: whose residence counts in a trust? [Replace this with your own situation: what you are buying, the price, the dates, who the buyer is, and what you plan to do with the property.] THE LAW THIS TURNS ON - FA 2003 Schedule 9A para 4 - test for a non-resident transaction https://www.legislation.gov.uk/ukpga/2003/14/schedule/9A/paragraph/4/2025-11-17 - FA 2003 Schedule 9A para 13 - bare trusts taking new home leases https://www.legislation.gov.uk/ukpga/2003/14/schedule/9A/paragraph/13/2025-11-17 - FA 2003 Schedule 9A para 14 - settlement trusts with beneficiary interests https://www.legislation.gov.uk/ukpga/2003/14/schedule/9A/paragraph/14/2025-11-17 - FA 2003 Schedule 16 para 3 - bare trustees taking or granting leases https://www.legislation.gov.uk/ukpga/2003/14/schedule/16/paragraph/3/2025-11-17 - FA 2003 Schedule 16 para 4 - settlement trustees treated as full buyers https://www.legislation.gov.uk/ukpga/2003/14/schedule/16/paragraph/4/2025-11-17 - FA 2003 Schedule 16 para 6 - which settlement trustees may file returns https://www.legislation.gov.uk/ukpga/2003/14/schedule/16/paragraph/6/2025-11-17 - FA 2003 section 101 - unit trust schemes treated as companies https://www.legislation.gov.uk/ukpga/2003/14/section/101/2025-11-17 Guidance page from HMRC on this topic (guidance, not law): https://www.gov.uk/hmrc-internal-manuals/stamp-duty-land-tax-manual/sdltm09940 HOW I WANT YOU TO ANSWER 1. Work from the legislation above. Read it before answering. Guidance from HMRC is its view of the law, not the law, and does not bind a tribunal or a court. 2. Tell me what the rule actually requires, in plain English. 3. Tell me which facts decide the answer, and which facts would change it. 4. Tell me what evidence I would need to support the position. 5. Be explicit about anything unsettled or fact-sensitive. Do not guess. 6. Your training data has a cutoff and SDLT rates and reliefs change at fiscal events. Say so if you are not sure the law is current. POINTS ALREADY KNOWN TO BE UNCERTAIN ON THIS TOPIC - The supplied statutory material is current only to 30 January 2026 for Schedule 4ZA material and 17 November 2025 for the wider Act. The official example uses a 2027 purchase, so the law in force on that date must be checked against current legislation. - Whether a trust is bare, whether a beneficiary has the required right, and whether an arrangement is a unit trust can depend on the trust deed and the facts. Do not give me a conclusion you cannot support from the provisions above.
Legislation links show Finance Act 2003 as it stood on 2025-11-17. The law may have changed since, and the rules that apply are those in force on the date of your transaction. The official guidance this page is based on is here.
This page was last updated on 31 August 2026
Useful article? You may find it helpful to read the original guidance here: Non-UK resident stamp duty: whose residence counts in a trust?
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