Stamp duty exemption when a failed bank’s land is transferred
Bank resolution SDLT exemption
Some land transfers made during the formal resolution of a failed financial institution are exempt from SDLT. The transfer must be made under a document listed in Finance Act 2003 section 66A.
- Check the legal power stated in the transfer document.
- HMRC says relief code 28 should be used on a return or amendment.
- A reverse transfer with no payment may be outside SDLT under HMRC’s view.
Scroll down for the full analysis.
Read the original guidance here:
Stamp duty exemption when a failed bank’s land is transferred
Stamp duty exemption when a failed bank’s land is transferred
Stamp duty land tax may not be due when land moves during the official rescue of a failed bank. This is a narrow exemption. It applies only when the transfer uses a named legal document under the financial-resolution rules.
What this rule is about
When a financial institution fails, the authorities may move its assets fast to protect customers and the wider financial system. Land may be one of those assets. Without a special rule, moving that land could trigger SDLT.
Section 66A of the Finance Act 2003 removes the SDLT charge for some transfers. It is not a general exemption for a bank that sells property. The formal resolution route matters.
What the official source says
HMRC’s manual says the exemption covers land moved from a failed institution to certain temporary bodies during a resolution. Section 66A exempts a land transfer when a listed instrument makes it, or when the transfer is made under such an instrument. That is the legal test.
- A transfer instrument can move land to a temporary bridge bank.
- A transfer instrument can move land to an asset management vehicle.
- A supplemental transfer document can qualify if its first document was one of the listed types.
- A later land transfer under a resolution instrument can qualify.
- A supplemental transfer document for a bridge bank can qualify.
- A property transfer order can move land into temporary public ownership.
- A recognised third-country resolution instrument may also qualify in the stated cases.
The wording is technical because it follows the formal powers used in a bank resolution. What decides the answer? It is the legal basis of the transfer document, not the label on the deal.
What this means in practice
Where land moves under the right resolution instrument, and that instrument is one listed in section 66A, the transfer is exempt from SDLT in full. The land’s value does not change that. This can matter when a failed institution owns offices, branches, development land, or other property.
HMRC says you should claim the exemption on a land transaction return, or amend a return already filed, and use relief code 28 for this purpose. Use code 28. That is HMRC’s filing guidance. The legal entitlement still comes from section 66A.
- Check whether the institution was subject to the formal resolution process.
- Read the transfer document rather than relying on a summary of the deal.
- Match the document to one of the statutory categories.
- Keep the first instrument with all linked documents.
- Use HMRC’s stated relief code if a return is needed.
- If a return was already filed, consider whether it can be amended.
How to analyse it
Start with the document. Do not start by asking whether the transfer looks like a rescue deal. The statute gives relief to specific legal instruments.
- Identify the failed institution that held the land before the transfer.
- Identify the body that received it, such as a bridge bank or asset management vehicle.
- Find the statutory power named in the transfer instrument.
- Check whether that instrument appears in section 66A(2).
- Check if a later document comes under a qualifying first instrument.
- Review the SDLT return and any amendment route separately.
- For a reverse transfer, check whether anyone gave money or other value for the land.
That last point has a different result. HMRC says a reverse transfer is outside SDLT if no money or other value is given for it.
Example
Imagine a failed bank owns a site valued at £4 million. A property transfer instrument uses the bridge-bank power to move the site to a temporary bridge bank. The site’s value does not itself stop the exemption. If the instrument is one listed in section 66A, the transfer is exempt from SDLT.
Later, the authorities decide that one small part of the site was not needed. It is transferred back without any payment or other value. HMRC’s manual says that reverse transfer is outside SDLT.
Why this can be difficult in practice
These transfers can involve several documents made close together, and a document called supplemental or ancillary may qualify only if it links back to the right original instrument. The link must be clear.
You may think that any transfer to a temporary public body is exempt. It is not that simple. The document must use the statutory resolution powers covered by section 66A.
- A commercial sale by a financial institution is not enough on its own.
- The receiving body’s name does not settle the issue.
- A related document needs a clear link to the qualifying original instrument.
- A return amendment has its own statutory requirements and time limit.
- Payment on a reverse transfer may change HMRC’s stated outside-SDLT treatment.
- HMRC’s manual is guidance, so the legislation takes priority if they differ.
Key takeaways
- This relief covers named bank rescue transfer documents.
- The document’s legal basis is the central question.
- HMRC says to claim the relief using code 28 on a return or amendment.
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 66A — exemption for specified financial institution resolution transfers
- FA 2003 Schedule 10 para 6 — how a buyer may amend an SDLT return
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 a document falls within the listed statutory categories depends on the resolution documents and the legal power under which they were made.
- HMRC’s manual does not cover every category now listed in FA 2003 s.66A(2), including later provisions concerning central counterparties.
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 resolution instrument and any supplemental or ancillary document
- Evidence of the statutory power used to make the transfer
- Land transfer documents showing the failed institution and receiving body
- Evidence of any money or other value given on a reverse transfer
- The SDLT return or proposed amendment
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 exemption when a failed bank's land is transferred [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 66A - exemption for specified financial institution resolution transfers https://www.legislation.gov.uk/ukpga/2003/14/section/66A/2025-11-17 - FA 2003 Schedule 10 para 6 - how a buyer may amend an SDLT return https://www.legislation.gov.uk/ukpga/2003/14/schedule/10/paragraph/6/2025-11-17 HMRC's guidance page on this topic (guidance, not law): https://www.gov.uk/hmrc-internal-manuals/stamp-duty-land-tax-manual/sdltm29220 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 a document falls within the listed statutory categories depends on the resolution documents and the legal power under which they were made. - HMRC's manual does not cover every category now listed in FA 2003 s.66A(2), including later provisions concerning central counterparties. 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 exemption when a failed bank’s land is transferred
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