Stamp Duty Land Tax
Stamp Duty Land Tax (SDLT) replaced stamp duty on Land and Buildings from December 2003.
SDLT generally arises at the time that a transaction is completed.
Consideration for a SDLT transaction is amount payable in money or moneys’ worth. The value on which SDLT is charged includes any VAT on the transaction.
Purchasers (or agents on their behalf) must send the stamp office a return notifying a land transaction within 30 days after the effective date of the transaction. This generally applies even if no tax is payable.
Payment of DDLT due must be made on or before the filing date for the return (i.e. 30 days)
Relief is available from SDLT for Charities.
Charities, including the University, are exempt from SDLT provided the land being acquired is to be held for a qualifying charitable purpose.
The main charitable purpose of the University is `the advancement of education’. Therefore, if land is acquired, and used in some way for the advancement of education then the transaction will be exempt from SDLT. The exemption would obviously apply if the land, or building situated on the land, was used directly for teaching, research or related activities. The exemption also applies indirectly, however, if land/buildings is leased by the university, and the income is used by the university to further its charitable purpose.
The important point at the time of purchase is the genuine intention for use. Therefore, if at the time of purchase, the intention is that the land/building will be put to charitable use, either directly or indirectly, then the exemption can be applied.
A period of non occupancy/refurbishment after acquisition does not affect the exemption, as long as intended use is charitable after this period.
If, within 3 years from acquisition, actual use differs from intended use, and indeed is non-charitable, the full amount of SDLT which would originally have been payable, becomes payable. As long as the intention at the outset was genuinely charitable, then no penalties or interest charges will apply.