SDLTM27040 | Reliefs: Right to buy transactions, shared ownership leases etc: Shared ownership leases: market value election where freehold reversion is available: treatment of freehold reversion FA03/SCH9/PARA3

Where

• a valid election has been made under FA03/SCH9/PARA2 and

• any stamp duty land tax due has been paid

the subsequent transfer of the reversion under the lease agreement is exempt from charge.

Despite the transfer of the reversionary interest to the lessee being the transfer of a chargeable interest, FA03/SCH9/PARA3 exempts the transfer from any charge to stamp duty land tax whether it is for consideration or otherwise.

The transfer must however be notified in a land transaction return.

Where no stamp duty land tax is due on the initial shared ownership transaction (because the market value falls within the 0% stamp duty land tax threshold) it will still be necessary for the lessee to make an election under FA03/SCH9/PARA2 to ensure that the transfer of the reversion is exempt from charge.