HMRC SDLT: Charities Relief from Stamp Duty Land Tax: Conditions and Clawback Rules Explained

Charities Relief from Stamp Duty Land Tax (SDLT)

Charities and charitable trusts can receive relief from Stamp Duty Land Tax (SDLT) when purchasing land, provided they meet specific conditions. This relief can be reclaimed if the charity ceases to be a charity or uses the property for non-charitable purposes within three years. However, if the land is sold within this period, no clawback occurs. Each claim is assessed individually, and certain charities may qualify even if not registered with the Charity Commissioners.

  • Relief is available for charities and charitable trusts purchasing land, subject to conditions.
  • Clawback occurs if the charity ceases to exist or uses the land for non-charitable purposes within three years.
  • No clawback if the land is sold within three years of the purchase.
  • Partial relief may be available if conditions for full relief are not met.
  • Joint purchasers can claim relief only to the extent of their contribution to the purchase.
  • Some charities, like churches and universities, may qualify without being registered with the Charity Commissioners.

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Charities Relief from Stamp Duty Land Tax

Charities and charitable trusts can receive relief from Stamp Duty Land Tax (SDLT) when they buy land, but there are important conditions to meet.

General Overview

According to FA03/S68 and FA03/SCH8, relief from SDLT is available for charities and charitable trusts when they purchase an interest in land. It is important to note that this relief is subject to certain conditions.

  • For details about the relief available to charities, see SDLTM26010.
  • For details regarding charitable trusts, refer to SDLTM26040.

Clawback Provision

If a charity or charitable trust has received SDLT relief and then stops being a charity or uses the land for non-charitable purposes within three years of the purchase, HMRC has a ‘clawback’ provision. This means the relief given may be taken back.

  • For further details on clawback, see SDLTM26020.
  • The same rules about clawback apply to charitable trusts, which you can read about in SDLTM26050.

The clawback only happens if the charity or charitable trust still owns the land at the time of the disqualifying event.

Disposal of Land

If a charity or charitable trust sells land that benefited from SDLT relief within three years of purchasing, they won’t face clawback. This means they can sell without worrying about losing the relief already given.

For information on partial relief, which applies when the conditions for full relief are not met, see SDLTM26030.

Eligibility for Relief

Most purchases by a charity that is:

  • Registered with the Charity Commissioners in England and Wales
  • Recognized as a charity by HMRC in Scotland or Northern Ireland

are eligible for SDLT relief, provided that the property is not bought to be resold. However, some charities, such as churches, universities, and colleges, may not need to register or may not be able to register with the Charity Commissioners.

Joint Purchasers

When a chargeable interest (like land) is bought by multiple parties, the relief available to charities is limited to the lower amount between:

  • The portion of the property acquired by the charities or charitable trusts
  • The portion of the purchase price that is contributed by the charities or charitable trusts

For in-depth guidance on joint purchasers, refer to SDLTM26035.

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Written by Land Tax Expert Nick Garner.
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