Charities can claim for Stamp Duty Land Tax relief in joint purchases

Charities that have jointly purchased a property with an organisation which is not a charity, such as a trading arm, can now claim for overpaid Stamp Duty Land Tax (SDLT), following a Court of Appeal ruling. In June 2013, the Court of Appeal overruled a decision by the Upper-Tier Tax Tribunal. The Tribunal had ruled that SDLT relief on the charity’s share of a property purchase should not be allowed, because purchasers had a joint obligation to file a single land transaction return. But the Court of Appeal overturned this decision and decided relief is limited to where a charity uses the greater part of its share of the property for a charitable purpose. The portion of stamp duty land tax to be paid by a non-charity partner will still be based on a percentage of the total cost of the property acquired. This may also apply in cases where charities have entered into equity sharing type arrangements.

IBB Solicitors’ specialist Charities team has a wealth of experience in delivering practical commercial advice to charities and not for profit organisations, and those who work with them. For advice, contact a member of the team: call us on 01895 207809 or email charities@ibblaw.co.uk