Freeport and Investment Zone SDLT relief: dividing the price fairly
Freeport and Investment Zone SDLT price splits
Where a site has different intended uses, relief depends on a fair split of the amount paid. It does not follow the site area alone.
- Identify each planned use
- Use a just and reasonable method
- Keep evidence for the SDLT return
Scroll down for the full analysis.
Read the original guidance here:
Freeport and Investment Zone SDLT relief: dividing the price fairly
Freeport and Investment Zone SDLT relief: dividing the price fairly
When one purchase includes land for different uses, stamp duty relief is not worked out by simply measuring the site. The deciding issue is the share of the price that, after the planned uses, the character of each part and the evidence are considered together, fairly relates to the qualifying-use part. That can affect how much SDLT relief is available.
What this rule is about
Freeport and Investment Zone relief can apply to land in a special tax site, if the wider conditions are met. Some sites include land intended for business use alongside land intended for another use.
For example, a buyer may plan warehouses on one part and homes on another. Only the qualifying part may support relief. The price is the focus.
This sounds like a drawing exercise. It is not. A larger area does not always represent a larger share of the value paid.
What the official source says
HMRC’s manual says that the amount you pay for the property, called chargeable consideration in the legislation, is split between the different intended uses. The land area is not itself split for this purpose.
The law requires a just and reasonable split. In everyday terms, it must be fair and sensible on the facts. HMRC accepts that more than one method may meet that standard.
- First, identify the parts of the site intended for different uses.
- Measure those parts where that helps explain the planned use.
- Work out which parts are intended for a qualifying use.
- Split the amount paid on a just and reasonable basis.
- Claim relief only for the share that fairly relates to the qualifying part.
- Keep evidence for the split shown on the SDLT return.
HMRC gives two possible methods. Where suitable, the figures in a planning application may help. Floor space for the different uses may also help.
Neither method is automatic. When considering a claim, HMRC says it may also take account of other methods where the facts of the case and the evidence for the proposed split support them. The facts matter.
What this means in practice
Do not assume that half the site means half the price qualifies: a small part can be worth more when its location, buildings, access or planned use make it more valuable. Area alone is not enough.
Equally, a plan that marks land as business space does not prove the price split by itself. You need a clear link between the plans, the value and the figure put on the return.
- Use the planned use at the time of the purchase.
- Read the contract, plan and planning papers together.
- Check whether site area is a sensible guide to value.
- Consider floor space where buildings have different planned uses.
- Record why the chosen method gives a fair result.
- Keep the papers behind the calculation.
After the purchase, the identified qualifying part must be monitored during the control period. If its actual use later fails the relevant test, the relief may be withdrawn.
How to analyse it
Start with the land you bought, not the percentage you hope to claim. Then build a simple, evidenced route from the site plan to the price split.
- Is the land in the relevant special tax site?
- What use is planned for each distinct part of the site?
- Which planned uses meet the qualifying-use test?
- What total amount was paid for the whole site?
- Which method best reflects the value of each intended use?
- Does the method produce a just and reasonable split?
- Can you show the working with retained documents?
- Can the later actual use be checked during the control period?
Ask the key question plainly: does the split reflect value, rather than just square metres? If not, it may be hard to support.
Example
Illustration: Priya buys a mixed-use site for £1,000,000. The plans show a business building on one part and homes on the rest. A valuation method supported by the evidence assigns £600,000 of the price to the business part and £400,000 to the homes part.
For the qualifying-use test, the relevant amount is £600,000, rather than an amount derived simply from the business part’s percentage of the total site area. The wider relief conditions must still be met.
Why this can be difficult in practice
Value and area often point in different directions. A planning application may show that 60% of a site is for business, but it may not show that 60% of the price relates to that part.
This is the part people can get wrong. The manual allows different methods, but that does not mean any convenient method will do.
- Do not treat an area percentage as the answer without checking value.
- Do not rely on a planning plan with no explanation of the price split.
- Do not claim relief for land planned for homes or their gardens.
- Do not discard the calculation after the return is filed.
- Do not overlook changes in the actual use after purchase.
HMRC’s manual sets out its view of the process. It is not law, and the legislation remains the starting point.
Key takeaways
- Split the price, not just the site area.
- The split must be just and reasonable.
- Keep clear evidence and monitor later use.
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 6C para 2 — when land qualifies for special tax site relief
- FA 2003 Schedule 6C para 3 — uses that count as qualifying business use
- FA 2003 Schedule 6C para 7 — fairly dividing the price between different land uses
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
- There is no single required valuation method. What is just and reasonable depends on the land, planned uses and evidence.
- The supplied statutory material is current only to 17 November 2025. The position for a later transaction needs checking against current legislation.
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 sale contract and any plan showing the land bought
- Planning applications and approved plans
- Floor-area schedules or site-area measurements
- A clear explanation of each planned use
- Valuation evidence or calculations supporting the price split
- Records showing how the land is actually used during the control period
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 Freeport and Investment Zone SDLT relief: dividing the price fairly [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 6C para 2 - when land qualifies for special tax site relief https://www.legislation.gov.uk/ukpga/2003/14/schedule/6C/paragraph/2/2025-11-17 - FA 2003 Schedule 6C para 3 - uses that count as qualifying business use https://www.legislation.gov.uk/ukpga/2003/14/schedule/6C/paragraph/3/2025-11-17 - FA 2003 Schedule 6C para 7 - fairly dividing the price between different land uses https://www.legislation.gov.uk/ukpga/2003/14/schedule/6C/paragraph/7/2025-11-17 HMRC's guidance page on this topic (guidance, not law): https://www.gov.uk/hmrc-internal-manuals/stamp-duty-land-tax-manual/sdltm20270 HOW I WANT YOU TO ANSWER 1. Work from the legislation above. Read it before answering. HMRC guidance is HMRC's 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 - There is no single required valuation method. What is just and reasonable depends on the land, planned uses and evidence. - The supplied statutory material is current only to 17 November 2025. The position for a later transaction needs checking against current legislation. 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 1 September 2026
Useful article? You may find it helpful to read the original guidance here: Freeport and Investment Zone SDLT relief: dividing the price fairly
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