SDLTM09550 | Scope: when is Stamp Duty Land Tax (SDLT) chargeable: higher rate charge for acquisitions of residential property by certain non-natural persons FA03/S55/SCH4A: exclusions from the higher rate charge

Trusts FA03/SCH4A/PARA3(4)

A company that is acting as a trustee of a settlement is outside the scope of the higher rate charge. This is the case whether the company is acting as a ‘corporate trustee’ for many separate settlements or whether the company is acting as trustee for a single settlement.

A ‘settlement’ is defined in FA03/SCH16/PARA1 as a trust other than a bare trust. Where an acquisition is made by a nominee or bare trustee, SDLT applies as if the interest was vested in, and the acts of the trustee in relation to it, were the acts of the person or persons for whom he is trustee (except where the transaction is a grant of a lease) - see FA03/SCH16/PARA3.

Examples

1. A company acting in its capacity as a trustee of a settlement purchases a chargeable interest in a dwelling. The interest costs £2.5 million. The 17 per cent higher rate SDLT charge does not apply and SDLT is payable at the standard rates.

2. A company acting in its capacity as a bare trustee for an individual purchases a chargeable interest in a dwelling. The interest costs £1.5 million. The 17 per cent higher rate SDLT charge does not apply as the bare trustee is ignored and the return must identify the purchaser as the individual. Whether SDLT is payable at the standard rates or higher rates for additional dwellings will depend on whether the individual owns any other dwellings.

3. An individual acting in his/her capacity as a bare trustee for a company purchases a chargeable interest in a dwelling. The interest costs £2.5 million. The higher rate charge applies as the bare trustee is ignored and the return must identify the purchaser as the company. The 17 per cent higher rate SDLT charge applies.