SDLTM26010 - Reliefs: Charities relief: Detailed rules to qualify for the relief FA03/SCH8/PARA1

Relief from Stamp Duty Land Tax (SDLT) is available to charities on the purchase of a chargeable interest that they intend to hold for qualifying charitable purposes. The purchasing charity must intend to hold the chargeable interest for qualifying charitable purposes. This means:

  • for use in the furtherance of the charitable purposes of the purchaser or another charity
  • as an investment, the profits of which are applied to the charitable purposes of the purchaser
  • that the transaction must not have been entered into for the purposes of avoiding SDLT by either the purchaser or any other person.

Following the definition in FA10/SCH6, to qualify for relief a charity must:

  • be established for charitable purposes only
  • meet the UK tax definition of a charity
  • be subject to the control of a court in the exercise of that court’s jurisdiction with respect to charities. In the UK this is the High Court in England, the Court of Session in Scotland or the High Court in Northern Ireland. In a country outside the UK this means a court with a corresponding jurisdiction.
  • be registered if required to do so by the laws of the territory in which it is situated
  • be administered or controlled by “fit and proper “ persons

Full guidance on the “fit and proper” persons test can be found on the website at https://www.gov.uk/government/publications/charities-detailed-guidance-notes/chapter-2-applications-for-recognition-as-a-charity-for-tax-purposes

If the purchaser’s national administration issues a charity reference or similar identification number, please enter it at part 3 of Question 9. A non UK Charity should get a charity reference number from HMRC (HMRC website).

(see https://www.gov.uk/charities-and-tax/get-recognition)

These restrictions are not meant to restrict the genuine use by charities of properties they purchase for charitable purposes and most charities will have no difficulty in fulfilling these conditions.

See SDLTM26010a, example where a dwelling is provided to a vicar or priest.