Guidance Note on the Stamp Duty Land Tax (Open-ended Investment Companies) Regulations 2008 (Statutory Instrument 2008 No. 710)

General overview

The Stamp Duty Land Tax (Open-ended Investment Companies) Regulations 2008 (S.I. 2008/710) provide relief from SDLT for land transactions which transfer property from an authorised unit trust (AUT) to an open-ended investment company (OEIC), as part of an arrangement for the conversion of the AUT into an OEIC, or the amalgamation of the AUT with an existing OEIC.

This relief must be claimed in a land transaction return or an amendment to such a return. Enter the “other” relief code (28) at question 9 of the return.

Conditions for the relief

Vendor and Purchaser

  • The vendor must be a UK-authorised unit trust in respect of which an authorisation order made by the Financial Services Authority under section 243 Financial Services and Markets Act 2000 is in force. For this purpose each part of an umbrella scheme is treated as a separate AUT.
  • The purchaser must be an open-ended investment company incorporated in the UK, which satisfies the conditions set out in section 236 Financial Services and Markets Act 2000.

The property

The subject-matter of the transaction must be property which is subject to the trusts of the AUT at the time of the transaction.

The transfer

The transfer must form part of an arrangement under which

  • the AUT converts into, or amalgamates with, the OEIC;
  • the whole of the property of the AUT (that is, not just property which constitutes chargeable interests for SDLT purposes) becomes the property of the OEIC, except for any property retained in order to discharge the trustees’ liabilities;
  • all the units in the AUT are extinguished;
  • the consideration for the transfer consists of, or includes, the issue of shares in the OEIC to the holders of the extinguished units, in proportion to their holdings of those units and
  • there is no other consideration for the transfer, except for the assumption or discharge by the OEIC of liabilities of the trustees of the AUT.