SDLTM20320 - Freeports and Investment Zones relief – control period and withdrawal of relief

Relief is withdrawn when a purchaser ceases to use qualifying land exclusively in a qualifying manner during the control period.

The control period begins on the effective date of that transaction and ends the earlier of –

· 3 years from the effective date of a transaction (para 9(1)(a)); and

· complete disposal of qualifying land (para 9(1)(b)).

Where relief is withdrawn, a further return must be made (and tax paid) within 30 days of the date when qualifying use ended. The tax payable when relief is withdrawn is the whole of the relief originally claimed.

Example

A purchaser buys 40 acres of ‘mixed’ land in a special tax site costing £400,000. All of it is inside a special tax site and all but 10 acres are intended to be used in a qualifying manner.

The tax attributable to the 30 acres that was intended be used in a qualifying manner, reducing the tax charge accordingly.

Two years after acquisition the purchaser ceased to use one of the 30 acres of the qualifying land in a qualifying manner. A further return, and the tax for the whole 40 acre purchase less any tax already paid, became due and payable 30 days from the day the change occurred.