Q&As

Is there any potential stamp duty land tax payable as a result of entering into a deed of release/variation of a restrictive covenant affecting a freehold title in return for payment of a financial consideration?

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Produced in partnership with Sean Randall of Blick Rothenberg
Published on LexisPSL on 27/04/2018

The following Tax Q&A produced in partnership with Sean Randall of Blick Rothenberg provides comprehensive and up to date legal information covering:

  • Is there any potential stamp duty land tax payable as a result of entering into a deed of release/variation of a restrictive covenant affecting a freehold title in return for payment of a financial consideration?

Is there any potential stamp duty land tax payable as a result of entering into a deed of release/variation of a restrictive covenant affecting a freehold title in return for payment of a financial consideration?

The benefit of a restrictive covenant is a ‘chargeable interest’ for the purposes of stamp duty land tax (SDLT). It is the benefit of a restriction affecting the value of an estate in land. For more detail, see Practice Note: Land transactions, chargeable interests and chargeable transactions.

Accordingly, the release of a restrictive covenant is an acquisition of that interest by the person whose interest or right is benefitted by the transaction and a disposal by the person ceasing to be entitled to the interest.

Likewise, the variation of a restrictive covenant is an acquisition of a chargeable interest by the person

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