SDLTM29220 - Reliefs: Financial Institutions on Resolution: Stamp Duty Land Tax exemption on certain transfer instruments

When a failed institution is placed into resolution and a stabilisation power exercised under the Banking Act 2009 (‘the Act’), section 66A Finance Act 2003 provides an exemption from Stamp Duty land Tax (SDLT) on certain transfers of land from the failed institution to the appointed temporary holding entity.

The exemption from SDLT applies to:

  • A property transfer instrument, or a supplemental property transfer instrument, or an ancillary instrument made under the original or supplemental instrument which transfers land from the failed institution to a temporary bridge bank (section 66A (2)(a), (c) and (e) Finance Act 2003).

  • A property transfer instrument, or a supplemental share or property transfer instrument, or an ancillary instrument made under the original instrument which transfers land from the failed institution to an asset management vehicle (section 66A (2)(b) and (c) Finance Act 2003

  • A bail-in resolution instrument, property transfer instrument, a supplemental resolution instrument or supplemental property transfer instrument, or an ancillary instrument made under the original instrument or an ancillary instrument made under the original instrument which transfers land from the failed institution to a temporary holding depositary bank (section66A (2)(c and (d) Finance Act 2003).

  • A property transfer order, or supplemental property transfer order, or an ancillary order made under the original order which transfers land held by the failed institution to temporary public ownership (section 66A (2)(f) Finance Act 2003).

  • Recognising a third country resolution - A third country instrument which transfer land held by, say a UK branch of a non-UK incorporated institution which has been placed in resloution outside of the UK, to a temporary resloution holding firm (FA2003/S66A (2)(g)).

Exemption claimed by a return to HMRC

The exemption is to be claimed in a land transaction return or an amendment to a return, using relief code 28.

Reverse transfer instrument

Where, following exercise of a stabilisation option and during a resolution process it is determined, for example, that part of the original transfer of land (or securities) to a temporary holding entity or to a creditor of the failed institution contained more land (or securities) than required to be included in the resolution process, a reverse transfer instrument(s) may be executed to return the excess land to the former owner.

In these circumatances, unless there is any amount or value of consideration (in money or money’s worth) given for the return of the property, the transfer is regarded as outside the scope of charge to SDLT.