SDLTM27076 - Reliefs: Right to buy transactions, shared ownership leases etc: Shared ownership trust: cases where election not made FA03/SCH9/PARA10-12
Where a market value election is not made, stamp duty land tax on the declaration of a shared ownership trust is charged on the basis that the initial capital is treated as consideration other than rent and rent-equivalent payments are treated as payments of rent.
Equity-acquisition payments, and the consequent increases in the purchaser’s beneficial interest, are exempt from charge if, following the increase, the purchaser’s beneficial interest does not exceed 80% of the total beneficial interest in the trust property.
Such payments and consequential increases are chargeable to SDLT if, following the increase,
- the purchaser’s beneficial interest exceeds 80% of the total beneficial interest in the trust property, or
- an interest in the trust property is transferred to the purchaser on termination of the trust.
For the purpose of determining the rate of tax chargeable on the declaration of a shared ownership trust, the declaration is treated as if it were not linked to
- any equity-acquisition payment or any consequent increase in the purchaser’s beneficial interest in the trust property, or
- a transfer to the purchaser of an interest in the trust property on termination of the trust.