Stamp duty relief when a charity buys land with another buyer
Partial charities relief
A charity may receive part of the SDLT charities relief when it buys land with a non-charity as tenants in common.
- The lower land-share or payment-share percentage controls the relief.
- The charity must have a qualifying charitable purpose for its share.
- A later change can lead to withdrawal of some or all relief.
Scroll down for the full analysis.
Read the original guidance here:
Stamp duty relief when a charity buys land with another buyer
Stamp duty relief when a charity buys land with another buyer
A charity can get part of the stamp duty land tax, or SDLT, relief when it buys land with a non-charity. This is not an all-or-nothing answer. It depends on the charity’s share of the land, what it pays, and what it plans to do with its share.
What this rule is about
Charities relief usually removes SDLT where a charity buys land for its charitable work or as an investment that funds that work. A joint purchase is harder because another buyer may not be a charity.
To address this, the law allows a proportion of the relief. The rule is aimed at a genuine shared purchase, not a way to cut a tax bill through an artificial arrangement.
What actually decides the amount? Compare two shares: the charity’s share of the land and its share of the amount paid. Relief uses the smaller share.
What the official source says
HMRC’s manual explains the rule in Finance Act 2003 Schedule 8. HMRC guidance is not law, but here it reflects the statutory partial-relief rules for a charity and a non-charity buying together.
- The buyers must buy as tenants in common. This means each owns a separate share rather than owning the whole jointly.
- At least one buyer must be a qualifying charity.
- At least one other buyer must not be a qualifying charity.
- None of the buyers can enter the purchase for an SDLT avoidance purpose.
- The qualifying charity must plan to hold its whole share for qualifying charitable purposes.
- Those purposes include charitable use, or an investment whose profits go to charitable purposes.
- For the tax reduction, compare the charities’ combined land share with their combined share of the amount paid, and use whichever figure is lower.
Even where it does not devote all of its own share to charitable purposes, a charity can still qualify if it uses the greater part.
Extra rules apply if it later transfers land or grants certain low-rent leases outside its charitable purposes.
What this means in practice
Do not assume that a charity’s name on the purchase makes the whole deal free of SDLT. Because a non-charity buyer is involved, the relief normally covers only part of the tax.
Equally, do not assume relief follows the cash split alone. A charity may pay more than its land share, or less. The lower figure controls the relief.
- Set out each buyer’s land share clearly in the legal papers.
- Keep a clear record of who provides each part of the price.
- Record why the charity is buying its share.
- Check that the planned use meets the charitable-purpose test.
- Build in a review if the charity’s plans change after completion.
- Remember that relief must be claimed in the SDLT return or an amendment to it.
How to analyse it
Start with the ownership structure, not the charity’s label. A charity cannot use this particular rule if the buyers are not tenants in common.
- Is there a land purchase by two or more buyers?
- Will they own separate shares as tenants in common?
- Which buyers are charities and which are not?
- Will the charity hold all of its share for qualifying charitable purposes?
- If not, will it hold the greater part of that share for those purposes?
- Does any part of the arrangement have an SDLT avoidance purpose?
- What percentage of the land will all qualifying charities own?
- What percentage of the total amount paid will they provide?
- Which percentage is lower?
- Could a later change of use, transfer or lease trigger withdrawal?
Where more than one qualifying charity is buying, first add their respective figures together; the comparison must then use those combined totals, not separate ones. Then compare those figures with the tax that would have applied without charities relief.
Example
Amira’s charity and a private investor buy a building as tenants in common. The charity takes a 40% share and provides 50% of the total price. It plans to use all its share for its charitable work.
Assume the SDLT before relief is £12,000. With 40% as the lower percentage, the relief is 40% of £12,000: £4,800. The remaining SDLT is £7,200.
Change one fact. If the charity takes a 40% share but plans charitable use for only 30% of that share, it is not a qualifying charity under the full-share test.
The greater-part rule can nevertheless still apply where the charity plans to use more than half of its own share for charitable purposes. It does not help where only 30% is planned for that use.
Why this can be difficult in practice
The arithmetic can be straightforward, yet deciding what use the charity actually intends for its share can prove much less so. A charity’s papers should show whether it will use the land for its work or hold it as an investment whose profits support that work.
Later events matter too. Relief, or part of it, can be withdrawn if the charity stops being established only for charitable purposes, or uses or holds its interest for other purposes.
It can apply both within three years from the effective date and in cases where arrangements made earlier lead to the event.
- Calling an arrangement charitable is not enough; the intended use matters.
- A 50:50 cash split does not always produce 50% relief.
- Buying together as joint owners is not the same as buying as tenants in common.
- A later non-charitable use can affect relief already given.
- The greater-part rule brings added risks for later transfers and certain leases.
Key takeaways
- A charity buying with a non-charity may receive partial SDLT relief.
- The lower of the charity’s land share and payment share sets the relief percentage.
- Good records of ownership, funding and intended use are vital.
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 section 68 — charities relief and how it is claimed
- FA 2003 Schedule 8 para 1 — what counts as qualifying charitable purposes
- FA 2003 Schedule 8 para 3A — partial relief for charities buying with non-charities
- FA 2003 Schedule 8 para 3B — when partial charities relief can be withdrawn
- FA 2003 Schedule 8 para 3C — relief where most of a charity share qualifies
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
- Whether land will be held for qualifying charitable purposes depends on the charity’s intended use and the facts.
- The amount of any partial withdrawal depends on what the charity still holds and how it is used at that time.
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 contract and transfer showing that the buyers are tenants in common
- Documents showing each buyer’s stated share of the land
- Records showing how much each buyer is paying
- The charity’s plans and decisions about using or investing its share
- Evidence that the arrangement does not have an SDLT avoidance purpose
- Records of later use, leases, transfers and changes to the charity
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 Stamp duty relief when a charity buys land with another buyer [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 section 68 - charities relief and how it is claimed https://www.legislation.gov.uk/ukpga/2003/14/section/68/2025-11-17 - FA 2003 Schedule 8 para 1 - what counts as qualifying charitable purposes https://www.legislation.gov.uk/ukpga/2003/14/schedule/8/paragraph/1/2025-11-17 - FA 2003 Schedule 8 para 3A - partial relief for charities buying with non-charities https://www.legislation.gov.uk/ukpga/2003/14/schedule/8/paragraph/3A/2025-11-17 - FA 2003 Schedule 8 para 3B - when partial charities relief can be withdrawn https://www.legislation.gov.uk/ukpga/2003/14/schedule/8/paragraph/3B/2025-11-17 - FA 2003 Schedule 8 para 3C - relief where most of a charity share qualifies https://www.legislation.gov.uk/ukpga/2003/14/schedule/8/paragraph/3C/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/sdltm26035 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 - Whether land will be held for qualifying charitable purposes depends on the charity's intended use and the facts. - The amount of any partial withdrawal depends on what the charity still holds and how it is used at that time. 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: Stamp duty relief when a charity buys land with another buyer
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