Freeport and Investment Zone SDLT relief with alternative finance
Freeport and Investment Zone alternative finance relief
Where a bank buys land under an alternative finance arrangement, the customer’s facts usually decide whether special tax site SDLT relief applies.
- The relevant person is normally the customer, not the bank.
- A later change in land use may withdraw the relief.
- The customer must then make the further return and pay extra SDLT.
Scroll down for the full analysis.
Read the original guidance here:
Freeport and Investment Zone SDLT relief with alternative finance
Freeport and Investment Zone SDLT relief with alternative finance
Stamp duty land tax, usually called SDLT, can operate differently where a bank buys land for you through alternative finance. For Freeport and Investment Zone relief, the key person is generally you, as the person using the finance arrangement, rather than the bank. That distinction matters if you later stop using the land in the required way.
What this rule is about
In some alternative finance deals, the bank buys the land first and, under the agreed structure, may then lease it to you or sell the land to you instead. Either route can apply.
More than one land deal can therefore appear on paper. Without special rules, uncertainty could arise over whose facts govern Freeport or Investment Zone relief when a bank acquires land first but another person uses it under the arrangement. These rules resolve that uncertainty.
Rather than stopping with the bank, these rules identify the person who entered into the arrangement with it. That person is treated as the relevant one.
What the official source says
HMRC’s manual says that paragraph 11 of Schedule 6C adds to the normal alternative finance rules. For the special tax site relief, HMRC says that eligibility, and any later loss of relief if conditions cease to be met, depend on the “relevant person”. That person is decisive.
The relevant person is the one using the finance arrangement. It is not the financial institution.
- The arrangement must be one covered by the alternative finance provisions.
- The bank may buy the land and lease it to the person using the finance.
- The bank may instead buy the land and sell it to that person.
- The relevant person’s circumstances decide whether relief can be claimed.
- If relief is later withdrawn, the relevant person bears the extra SDLT bill.
HMRC manuals set out HMRC’s view. They are not the law and do not bind a court or tribunal.
What this means in practice
The bank’s status, purpose or actions cannot by themselves secure the relief, because entitlement depends on why you bought the land and how you use it after the deal completes. Your facts decide it.
If the qualifying use stops, the tax result can change. The person using the finance must deal with the extra SDLT, even though the bank was the legal buyer in the first deal.
- Check who is the relevant person under the finance documents.
- Check that the land is in the relevant Freeport or Investment Zone site.
- Keep records of the intended use from the start.
- Monitor any later change in how the land is used.
- Do not leave the SDLT point to the bank alone.
How to analyse it
Begin with the paperwork rather than the label used for the finance. The structure decides which alternative finance rule applies.
- Identify whether the bank bought the land and leased it to you.
- Or identify whether the bank bought it and then sold it to you.
- Confirm that the first land deal is the one for which relief was claimed.
- Work out who entered into the arrangement with the bank.
- Test that person’s facts against the special tax site relief conditions.
- Check whether a later event has caused the relief to be withdrawn.
- If it has, prepare the further SDLT return and calculate the extra tax.
What actually decides the answer? It is not who held the land briefly. It is the relevant person’s position and the use of the land.
Example
HMRC gives an example in which a bank buys land in a special tax site for £2,000,000 and then leases it to the person using the finance. Relief is claimed for the bank’s first deal. The person plans to use all the land in a qualifying way.
After 12 months, the person no longer uses the land in that way. HMRC says that the person, not the bank, must make a further SDLT return. They must pay the SDLT due on the £2,000,000 amount. No rate appears in the source. No tax figure can safely be calculated from this example.
Why this can be difficult in practice
Land-use history is often the difficult part. You must also identify the exact point at which its qualifying use ended.
HMRC’s example also presents a wording problem. It describes a lease-back arrangement, which the legislation places in section 71A. Yet the manual refers to section 73(3), which concerns a resale arrangement. That should be checked against the signed documents and current law.
- A bank’s purchase does not mean the bank’s circumstances decide relief.
- A planned use may not be enough if the land is later used differently.
- The date of a change in use can affect when a further return is due.
- Freeport and Investment Zone rules can be date-sensitive.
Key takeaways
- In alternative finance cases, the customer’s facts usually decide this relief.
- If relief ends, the customer must make the further SDLT return.
- Check the finance structure, land use and current legislation carefully.
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 11 — alternative finance rules for special tax site relief
- FA 2003 section 71A — bank buys land and leases it back
- FA 2003 section 73 — bank buys land and sells it on
- FA 2003 section 81ZA — further return after alternative finance relief withdrawal
- FA 2003 section 85 — who pays tax when relief is withdrawn
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
- HMRC’s example describes a bank buying land and leasing it to the customer. That structure appears to match Finance Act 2003 section 71A, but the manual refers to section 73(3) for the second transaction. Section 73 instead describes a bank buying land and selling it to the customer.
- The supplied statutory material is current only to 17 November 2025. The rules and site dates must be checked for a later transaction.
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 finance documents, including the bank’s purchase and lease or resale arrangements.
- Evidence that the land was in the relevant special tax site on the transaction date.
- Evidence of how the customer intended to use the land and how it was actually used.
- The date and details of any change in use that may have caused relief to end.
- The original SDLT return and the amount paid for the land.
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 with alternative finance [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 11 - alternative finance rules for special tax site relief https://www.legislation.gov.uk/ukpga/2003/14/schedule/6C/paragraph/11/2025-11-17 - FA 2003 section 71A - bank buys land and leases it back https://www.legislation.gov.uk/ukpga/2003/14/section/71A/2025-11-17 - FA 2003 section 73 - bank buys land and sells it on https://www.legislation.gov.uk/ukpga/2003/14/section/73/2025-11-17 - FA 2003 section 81ZA - further return after alternative finance relief withdrawal https://www.legislation.gov.uk/ukpga/2003/14/section/81ZA/2025-11-17 - FA 2003 section 85 - who pays tax when relief is withdrawn https://www.legislation.gov.uk/ukpga/2003/14/section/85/2025-11-17 HMRC's guidance page on this topic (guidance, not law): https://www.gov.uk/hmrc-internal-manuals/stamp-duty-land-tax-manual/sdltm20340 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 - HMRC's example describes a bank buying land and leasing it to the customer. That structure appears to match Finance Act 2003 section 71A, but the manual refers to section 73(3) for the second transaction. Section 73 instead describes a bank buying land and selling it to the customer. - The supplied statutory material is current only to 17 November 2025. The rules and site dates must be checked for a later transaction. 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 with alternative finance
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