IFM08420 - Authorised Contractual Schemes (ACS): Stamp Taxes
Devolved taxes
Land transaction taxes were devolved to the Scottish and Welsh Governments with effect from April 2015 and April 2018 respectively, and Stamp Duty Land Tax now applies on the acquisition of properties in England and Northern Ireland only. The Scottish Land and Buildings Transaction Tax and the Welsh Land Transaction Tax are outside of the scope of this manual. For further guidance on those taxes, see:
Land and Buildings Transaction Tax
Stamp duty and Stamp Duty Reserve Tax
Stamp duty and stamp duty reserve tax (SDRT) apply in the normal way to acquisitions of securities by an Authorised Contractual Scheme (ACS), subject to the reliefs described below. The operator of the ACS may account for the duty or tax on behalf of the investors.
The following transactions are exempt from stamp tax and SDRT:
- Transfers of securities to an ACS in consideration for the issue of units in the ACS – see paragraph 25A(1)(a) of Schedule 13 to Finance Act 1999 (for stamp tax) and section 90(7B)(a)(i) of Finance Act 1986 (for SDRT);
- Transfers of securities between depositaries under the same ACS – see paragraph 25A(1)(b) of Schedule 13 to Finance Act 1999 (for stamp tax) and section 90(7B)(a)(ii) of Finance Act 1986 (for SDRT);
- Transfers of units in an ACS – see paragraph 25A(1)(c) of Schedule 13 to Finance Act 1999 (for stamp tax) and section 90(7B)(b) of Finance Act 1986 (for SDRT)).
These exemptions do not apply where the transactions form part of arrangements for the avoidance of stamp tax or SDRT – see paragraph 25A(3) of Schedule 13 to Finance Act 1999 (for stamp tax) and section 90(7D) of Finance Act 1986 (for SDRT)).
Stamp Duty Land Tax
Stamp duty land tax (SDLT) applies in the normal way to acquisitions of a chargeable interest in UK property except where seeding relief is available.
Schedule 16 to Finance Act 2016 introduced section 102A into Finance Act 2003 to provide that for the purposes of SDLT the CoACS is a company and the rights of investors are shares in the company. In that way SDLT is not charged on the buying of units in the scheme but there would be a charge to SDLT where an intending investor wanted to transfer an existing portfolio of UK property to a scheme in exchange for units in the scheme and for that reason Schedule 16 to Finance Act 2016 also introduced a seeding relief.
{#}Seeding relief
Schedule 16 to the Finance Act 2016 introduced a new relief from SDLT into Finance Act 2003 for the exchange of a major interest in UK property in return for units in a Co-ownership ACS. This new relief is found in section 65A and Schedule 7A to Finance Act 2003.
An operator of an ACS who needs advice on the seeding relief should write to:
BT - Stamp Duty Land Tax
HM Revenue and Customs
BX9 1HD
United Kingdom {#}