HMRC SDLT: SDLTM26005 – Reliefs: Charities relief
Charities Relief – Principles and Concepts
This section of the HMRC internal manual provides guidance on the reliefs available to charities. It outlines the principles and concepts that govern the application of these reliefs, ensuring compliance with tax regulations.
- Explains eligibility criteria for charities to claim reliefs.
- Details the types of reliefs available to charitable organisations.
- Provides procedural guidance for applying for reliefs.
- Highlights the importance of maintaining accurate financial records.
- Emphasises compliance with HMRC regulations to avoid penalties.
Read the original guidance here:
HMRC SDLT: SDLTM26005 – Reliefs: Charities relief
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.
Useful article? You may find it helpful to read the original guidance here: HMRC SDLT: SDLTM26005 – Reliefs: Charities relief
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