Stamp Duty Land Tax Exemption for Transfers in Financial Institution Resolutions

SDLT exemption for land transfers in bank resolution cases

A limited SDLT exemption can apply when land is transferred as part of the statutory bank resolution process under the Banking Act 2009. It only applies where a failed institution is in resolution, a relevant stabilisation power has been used, and the land is transferred by one of the specific legal instruments covered by section 66A of the Finance Act 2003.

• This is a targeted exemption for certain bank resolution transfers, not a general relief for insolvency, distress sales, or all transfers linked to a bank failure.
• The transfer must be made under the correct statutory instrument, such as a qualifying property transfer instrument, supplemental instrument, ancillary instrument, order, or recognised third-country instrument.
• The recipient must be a qualifying resolution entity, such as a bridge bank, asset management vehicle, temporary holding depositary bank, temporary public ownership body, or certain recognised third-country resolution vehicles.
• The exemption must be claimed through the SDLT return process using relief code 28, rather than being assumed automatically.
• If land is later returned under a reverse transfer instrument because too much was transferred, HMRC says the return is outside the scope of SDLT if no money or money’s worth is given for it.

Scroll down for the full analysis.

SDLT exemption for land transfers during bank resolution

This page explains a narrow SDLT exemption that applies when a failed financial institution is put into resolution under the Banking Act 2009 and land is transferred as part of that process. The point matters because land transfers that would normally trigger SDLT can be exempt if they are made under the specific resolution instruments covered by section 66A of the Finance Act 2003.

What this rule is about

When a bank or similar institution fails, the Banking Act 2009 allows resolution authorities to use special powers to stabilise the institution and protect the wider financial system. Those powers can involve moving assets, including land, out of the failed institution and into a temporary vehicle or public ownership.

Without a special rule, those land transfers could fall within SDLT in the usual way. Section 66A of the Finance Act 2003 creates an exemption for certain transfers made under these resolution arrangements.

This is not a general exemption for distressed sales or insolvency transfers. It is a targeted exemption for transfers made under specified resolution instruments in the statutory banking resolution framework.

What the official source says

The HMRC manual says that section 66A exempts certain transfers of land from SDLT where a failed institution is placed into resolution and a stabilisation power under the Banking Act 2009 is used.

The exemption applies to transfers of land from the failed institution to certain temporary or resolution-related entities where the transfer is made by one of the listed instruments. The categories identified in the manual are:

• Transfers to a temporary bridge bank under a property transfer instrument, a supplemental property transfer instrument, or an ancillary instrument made under the original or supplemental instrument.
• Transfers to an asset management vehicle under a property transfer instrument, a supplemental share or property transfer instrument, or an ancillary instrument made under the original instrument.
• Transfers to a temporary holding depositary bank under a bail-in resolution instrument, property transfer instrument, supplemental resolution instrument, supplemental property transfer instrument, or an ancillary instrument made under the original instrument.
• Transfers into temporary public ownership under a property transfer order, supplemental property transfer order, or an ancillary order made under the original order.
• Recognition of a third-country resolution, where a third-country instrument transfers land held by, for example, a UK branch of a non-UK incorporated institution in resolution to a temporary resolution holding firm.

The manual also states that the exemption must be claimed in an SDLT return, or by amending a return, using relief code 28.

It then deals separately with a reverse transfer instrument. This is where, after an earlier resolution transfer, it is decided that more land than necessary was transferred and the excess is returned to the former owner. HMRC’s view is that such a return transfer is outside the scope of SDLT, provided no chargeable consideration in money or money’s worth is given for the return.

What this means in practice

The practical effect is that not every land transfer connected with a bank failure is exempt. The exemption depends on three linked points:

• there must be a failed institution in resolution under the Banking Act 2009 framework,
• a relevant stabilisation power must have been exercised, and
• the land must be transferred by one of the specific instruments listed in section 66A.

If those conditions are met, the transfer can be exempt from SDLT even though it involves land that would otherwise be chargeable.

The identity of the recipient matters. The exemption is aimed at transfers into temporary bridge structures, asset management vehicles, temporary holding depositary banks, temporary public ownership, and certain recognised third-country resolution arrangements. A transfer to some other person or entity would not fall within this manual page unless it is covered by the legislation in some other way.

The form of the instrument also matters. The manual is not saying that any transfer connected to a resolution is exempt. It is saying that exemption applies where the transfer is effected through the listed statutory instruments or related ancillary instruments.

There is also an administrative point. The exemption is claimed through the SDLT return process using relief code 28. That means the exemption is not simply assumed in the background. It needs to be reflected in the filing position.

How to analyse it

A sensible way to analyse a transaction is to work through the following questions:

• Has the institution actually been placed into resolution under the Banking Act 2009?
• Has a stabilisation power been exercised?
• What is the exact instrument that transfers the land: a property transfer instrument, supplemental instrument, ancillary instrument, order, or third-country instrument?
• Who is receiving the land: a temporary bridge bank, asset management vehicle, temporary holding depositary bank, temporary public ownership, or a recognised temporary resolution holding firm?
• Does the transfer fall within one of the categories listed in section 66A as described by HMRC?
• Has the SDLT return been completed on the basis that the exemption is claimed, using relief code 28?

If the issue is a later reverse transfer, ask a different question: is the land simply being returned because too much was transferred into the resolution structure in the first place? If so, HMRC says the return transfer is outside the scope of SDLT unless money or money’s worth is given for that return.

That last point is important. HMRC is not describing the reverse transfer as exempt relief. It is describing it as outside the charge where there is no consideration. That is a different analysis.

Example

Illustration: a failed bank is put into resolution and, under a property transfer instrument made under the Banking Act 2009, a portfolio of land is transferred to a temporary bridge bank. If the transfer falls within section 66A, SDLT exemption can be claimed on the land transaction return using relief code 28.

Later, it is discovered that one property was included by mistake and was not needed for the resolution process. A reverse transfer instrument is executed to return that property to the former owner. If nothing is given in money or money’s worth for that return, HMRC’s published view is that the return transfer is outside the scope of SDLT.

Why this can be difficult in practice

The difficulty is usually not the broad policy but the legal classification of the documents and the transaction.

First, this is highly specialised legislation. Whether a document is a qualifying property transfer instrument, supplemental instrument, ancillary instrument, or recognised third-country instrument depends on the Banking Act resolution framework, not ordinary conveyancing labels.

Second, the exemption is tied closely to the statutory mechanism used. A transfer that is commercially connected with a resolution may still fall outside the exemption if it is not made by the right kind of instrument or to the right kind of entity.

Third, reverse transfers need care. The manual says they are outside the SDLT charge if no consideration is given. If any money or money’s worth is provided, that analysis may change. The source material does not set out the consequences in detail, so the facts and the legal structure of the return matter.

Fourth, third-country resolution cases can be especially technical because they involve recognition in the UK of a non-UK resolution process. The key question is whether the transfer is made by the kind of recognised third-country instrument covered by section 66A.

Key takeaways

• This is a specific SDLT exemption for land transfers made under the Banking Act 2009 bank resolution framework, not a general insolvency relief.
• The exemption depends on the exact statutory instrument used and the identity of the temporary or resolution-related recipient.
• A reverse transfer returning excess land may be outside the scope of SDLT if no money or money’s worth is given for that return.

This page was last updated on 24 March 2026

Useful article? You may find it helpful to read the original guidance here: Stamp Duty Land Tax Exemption for Transfers in Financial Institution Resolutions

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