REV BN 09: Stamp Duty Land Tax: Commercial Disadvantaged Areas Relief

Who is likely to be affected?

1. Purchasers entering into a commercial land transaction in Enterprise Areas, which are wards designated as qualifying for the ‘disadvantaged area relief’ exemption from stamp duty land tax. Land transactions include the transfer of freehold and the grant, assignment or assignation of a lease.

General description of the measure

2. Disadvantaged areas relief will not be available for non-residential land transactions with an effective date after today.

Operative date

3. The operative date is for transactions with an effective date after 16 March 2005. However the relief is preserved for the completion or substantial performance of contracts entered into on or before 16 March 2005, provided that there is no variation or assignment of the contract or sub-sale of the property and that the transaction is not the exercise of an option or right of pre-emption.

Current law and proposed revisions

4. Schedule 6 Finance Act 2003 provides for a relief from stamp duty land tax for non-residential transactions in land situated in designated ‘disadvantaged areas’. There is no tax charge where non-residential land is wholly within a disadvantaged area. Where non-residential land is partly inside and partly outside a disadvantaged area the consideration is apportioned so that only that part attributable to the land outside the disadvantaged area is charged to tax.

5. After today Schedule 6 will no longer provide an exemption for nonresidential transactions. However the relief is preserved for the completion or substantial performance of contracts entered into on or before 16 March 2005, provided that there is no variation or assignment of the contract or sub-sale of the property and that the transaction is not the exercise of an option or right of preemption.

6. Disadvantaged areas relief on residential transactions, which provides a higher residential threshold of £150,000, is unaffected.

7. Transactions outside disadvantaged areas are unaffected.

Further advice

8. If you have any questions about this change, please contact Crispin Taylor on 020 7147 2793 or Keith Brown on 020 7147 2790. Information about Budget measures is available on the Inland Revenue website

  Home Top | Menu