SDLTM10022 - Timeshares
SDLT legislation does not make specific provision for timeshares and the SDLT treatment of a timeshare agreement in respect of UK land will depend on the nature of the interest which it represents. This is a matter of general land law.
Timeshare accommodation is defined by section 1(1)(a) of the Timeshare Act 1992 as “living accommodation which is used or intended to be used, wholly or partly, for leisure purposes by a class of persons (“timeshare users”) all of whom have rights to use, or participate in arrangements under which they may use, that accommodation, or accommodation within a pool of accommodation to which that accommodation belongs, for a specified or ascertainable period of the year”.
Similar timeshare arrangements may also apply in respect of rights over land which does not include living accommodation; for example, shooting or fishing rights.
In most cases the timeshare agreement will be a form of personal contract which constitutes a licence to occupy land and is not a chargeable interest for SDLT purposes.
Exceptionally, where the timeshare agreement provides for exclusive and complete occupation of an individual unit of land or property for a defined period or periods, the agreement may constitute a lease, the grant or assignment of which is chargeable to SDLT.
This will depend on the details of the agreement with the site operator. It is important to note that a document described as a licence may sometimes in law be a lease, or vice versa.
However, generally speaking, if the agreement permits the site operator to request the timeshare user to occupy a similar unit elsewhere on the site, if the agreement provides for free access to the premises by the site owner or his staff, or if the site operator provides a high level of service (e.g. cleaning services) under the agreement, then the agreement is likely to be a licence.
The fact that the agreement gives an exclusive right of occupation only for defined periods each year, and that other timeshare users may have similar but non-concurrent rights over the same property, will not necessarily prevent the agreement from constituting a lease.
In Scotland, a timeshare agreement involving residential property must include provision for rent, separately from the management charge, and cannot have a duration in excess of twenty years, if it is to be regarded as a lease.