SDLTM00320 - Scope: What is chargeable

Land transactions: Exempt interests FA03/S48(2)

SDLTM00320

Land transactions: ‘exempt interests’ FA03/S48(2)

Certain interests in land are ‘exempt interests’. Dealings in exempt interests are not chargeable to SDLT.

The following are exempt interests:

• a ‘security interest’, that is, an interest or right (other than a rentcharge) held for the purpose of securing the payment of money or the performance of any other obligation. The commonest example of a security interest is a mortgage (in Scotland, a standard security)
• a licence to use or occupy land (note that a document which describes itself as a licence may in fact be a lease, especially if the practical consequence is that the grantee has exclusive occupation)

The following are exempt interests in England & Wales and Northern Ireland:

• a tenancy at will (note that a tenancy described as a tenancy at will may in fact be some other tenancy such as a periodic tenancy, especially if rent is paid)
• an advowson, that is, the perpetual right of presentation to an ecclesiastical living such as the office of rector or vicar
• a franchise granted by the Crown, for example, the right to hold a market or to take tolls
• a manor (the ‘Lordship of the Manor’ or seignory, but note that a seignory may be accompanied by chargeable interests such as profits a prendre)