SDLT—pre-completion transactions

The following Tax practice note provides comprehensive and up to date legal information covering:

  • SDLT—pre-completion transactions
  • What is a pre-completion transaction?
  • Defined terms under PCT rules
  • Assignment of rights
  • How is an assignment of rights treated?
  • Relief from SDLT on an assignment of rights
  • How is a series of assignments of rights treated?
  • How is a part only assignment of rights treated?
  • Free-standing transfer
  • How is a free-standing transfer treated?
  • More...

SDLT—pre-completion transactions

It was established under the stamp duty rules that relief should be available to a person who has contracted to buy an interest in land but contracts to sell or assign the rights under the contract before the contract is completed. This rule was translated into the stamp duty land tax (SDLT) regime in section 45 of the Finance Act 2003 (FA 2003).

The section prevented a charge that would otherwise have arisen on an acquisition of a chargeable interest at the same time as a disposal of the same interest to another person. This was primarily used for sub-sales, but the provision referred to the 'transfer of rights' and hence it also applied to other transactions, including an assignment of rights.

However, this section was used in a number of SDLT planning structures for both commercial and residential properties. The use of this provision in SDLT planning structures was considered in a number of cases including DV3, Allchin and Vardy. Parliament and HMRC took the view that this provision was being abused and needed to be substantially re-written in order that it could only be used to provide relief from SDLT in appropriate circumstances and could not be used for the purposes of SDLT mitigation. Consequently, following a period of consultation, FA 2013 included provisions which removed the existing provisions of FA 2003, s

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