HMRC SDLT: SDLTM27500 – Reliefs: Certain acquisitions by registered social landlords
Reliefs: Certain Acquisitions by Registered Social Landlords
This section of the HMRC internal manual provides guidance on the reliefs available for certain acquisitions by registered social landlords. It outlines the principles and conditions under which these reliefs can be applied.
- Explains the eligibility criteria for registered social landlords to claim reliefs.
- Details the types of acquisitions that qualify for relief.
- Provides procedural guidance for claiming the reliefs.
- Clarifies the legal framework governing these reliefs.
Read the original guidance here:
HMRC SDLT: SDLTM27500 – Reliefs: Certain acquisitions by registered social landlords
SDLTM27500 – Reliefs: Certain Acquisitions by Registered Social Landlords
The legislation known as FA03/S71 provides an exemption from Stamp Duty Land Tax (SDLT) for land purchases made by registered providers of social housing. This exemption applies under specific conditions that we will explain here.
Exemption Overview
The exemption from SDLT applies to land transactions where:
- The purchaser is a profit-making registered provider of social housing, and the transaction receives funding from a public subsidy.
- The purchaser is a relevant housing provider and meets one of the following three criteria:
- They are controlled by their tenants.
- The vendor is a qualifying body.
- The transaction is funded with public subsidy.
Definitions in FA03/S71
Relevant Housing Provider
A ‘relevant housing provider’ is defined as a non-profit registered provider of social housing or a registered social landlord. The Regulator of Social Housing maintains a list of these providers and assigns them the status of ‘Profit,’ ‘Non-profit,’ or ‘Local authority.’
Local authorities are considered non-profit by nature, so when a local authority appears on this register, it is treated as a non-profit registered provider for the purposes of FA03/S71. You can find the register at Registered providers of social housing.
Control by Tenants
If a housing provider is controlled by its tenants, it means that the majority of the board members are tenants of properties owned or managed by that provider. Here’s how board member status is determined:
- If the body is a company, a board member is a director of that company.
- If it is a corporate body managed by its members, one of its members qualifies as a board member.
- If it is a body of trustees, one of the trustees is considered a board member.
- In other cases, a member of the management committee or other governing body is seen as a board member.
Qualifying Body
A vendor qualifies as a qualifying body if they are one of the following entities:
- A relevant housing provider.
- A housing action trust established under Part 3 of the Housing Act 1988.
- A principal council as defined in the Local Government Act 1972.
- The Common Council of the City of London.
- The Scottish Ministers.
- A council established under Section 2 of the Local Government etc. (Scotland) Act 1994.
- Scottish Homes.
- The Department for Social Development in Northern Ireland.
- The Northern Ireland Housing Executive.
Public Subsidy
A public subsidy refers to financial assistance that can come from several sources, including:
- Grants distributed under Section 25 of the National Lottery etc Act 1983.
- Funding under Section 18 of the Housing Act 1996 for social housing grants.
- Support under Section 126 of the Housing Grants, Construction and Regeneration Act 1996 for regeneration and development.
- Financial assistance under Section 19 of the Housing and Regeneration Act 2008 from the Homes and Communities Agency.
- Grants provided by the Greater London Authority.
- Funding under Section 2 of the Housing (Scotland) Act 1988.
- Support provided under Article 33 or 33A of the Housing (Northern Ireland) Order 1992.
- Financial assistance under Section 31 of the Local Government Act 2003, aimed at social housing provision since March 15, 2023.
It’s important to note that the entire transaction does not need to be funded by public subsidies for the exemption to apply. There is no minimum dollar amount necessary for the funding. As long as part of the funding is from a recognised public subsidy and the purchaser qualifies as a relevant housing provider, the SDLT exemption applies.
Filing and Codes
When submitting a land transaction return while claiming this exemption, the relief code ’23’ should be used. This helps represent the specific circumstances under which the exemption is claimed.
In summary, registered providers and relevant housing providers can benefit from Stamp Duty Land Tax exemptions when certain conditions involving tenant control, qualifying bodies, and public subsidies are met. Understanding these provisions ensures that the appropriate measures are followed when land transactions occur within the sphere of social housing.