Read the original guidance here:
HMRC SDLT: SDLTM20600 – Reliefs: Sovereign Bodies and International Organisations

Reliefs for Sovereign Bodies and International Organisations

General Overview

In general, overseas Heads of State, Governments, and other sovereign bodies are not exempt from the liability to pay Stamp Duty Land Tax (SDLT) when purchasing property in the UK. However, there are specific situations where relief from this tax is available.

Relief for International Organisations

One significant circumstance where relief can be granted is for international organisations when they purchase or lease their headquarters premises. This relief is based on particular rules outlined in a Statutory Instrument that provides Immunities and Privileges to these organisations.

Conditions for Relief

To be eligible for this relief, the following conditions must be met:

• The international organisation must have been granted immunities and privileges that include tax exemptions.
• The exemption should specifically include the organisation’s Director or a High Officer, allowing them to be free from UK taxation on the same basis as a diplomatic agent.

How to Claim Relief

If the conditions for relief are satisfied, it is essential for the international organisation to claim this relief correctly. To do this, the organisation must follow these steps:

Steps to Claim

1. Complete the land transaction return form accurately.
2. In the second part of Question 9 on the form, enter the relief code 27.
3. Submit the form ensuring that it includes all necessary information and documentation to support the relief claim.

Examples of Relief Application

Understanding how relief applies can be clearer with examples:

Example 1: Headquarters of an International Organisation

Suppose an international organisation, such as a United Nations agency, is purchasing a building to serve as its headquarters in London. If the organisation has been granted a Statutory Instrument that allows for tax exemptions and its Director enjoys similar tax status as a diplomatic agent, the organisation can claim relief from SDLT. They would do so by entering relief code 27 in Question 9 of their land transaction return.

Example 2: Leasing Premises

Imagine another scenario, where an international organisation leases office space for its operations in a UK city. If both the organisation and its senior officials are covered by the necessary immunity from taxation, the organisation can claim similar relief on the lease as it would if it were purchasing property. Again, the organisation would enter relief code 27 in the appropriate part of the land transaction return.

Important Considerations

When claiming relief, remember these important points:

• Documentation: Ensure that you have all necessary documents that prove the organisation’s tax-exempt status. This may include the Statutory Instrument or other relevant agreements.
• Accuracy: Fill out the relief claim accurately. Any mistakes in the land transaction return could delay the processing or result in denial of relief.
• Time Limits: Be mindful of any deadlines for submitting the land transaction return to avoid penalties.

Further Information

For additional details about the relief process and requirements, you can refer to the specific guidance provided by HMRC. This can help ensure that all aspects of your relief claim are correct and complete.

When submitting your claim, keep in mind the importance of proper advice and understanding the regulations related to SDLT and international organisations. Consulting a tax professional familiar with these issues can also be beneficial.