Spring Budget 2023 | Stamp Duty Land Tax Changes

The Spring 2023 Budget announcements contained some points of interest for those concerned with SDLT and ATED, and these were as follows.

Annual Tax on Enveloped Dwellings (ATED) and the 15% rate of Stamp Duty Land Tax (SDLT)  

The legislation will be included in the Spring Finance Bill 2023 to allow relief from ATED and the 15% rate of SDLT for companies which make a dwelling available for occupation by refugees under the Homes for Ukraine Sponsorship Scheme. 

It was confirmed that the legislation would have effect from 1 April 2022 for ATED and 31 March 2022 for SDLT. From those dates to the date the legislation takes overriding effect, HMRC will not collect any ATED or SDLT that may have been due following a change in the use of the dwelling to be part of the Homes for Ukraine Scheme.

 A tax information and impact note is published at Homes for Ukraine: Property Tax exemptions and reliefs – GOV for more information about the changes.UK (www.gov.uk)   

Registered Providers Of Social Housing    

On 14 December 2022, the Department for Levelling Up, Housing and Communities announced an additional £650m ‘Homes for Ukraine’ Support package. This included giving councils in England an additional £500m to reduce homelessness by obtaining housing for those fleeing conflict (including those from Ukraine and Afghanistan). The £500m is allocated under Section 31 of the Local Government Act 2003 (LGA 2003). The Budget confirmed that section 71 of the Finance Act 2003 (Certain acquisitions by registered social landlords) will be amended to ensure that registered providers of social housing purchasing property with the assistance of section 31 LGA 2003 funding qualify for the registered social landlord exemption. This change will affect transactions completed on or after 15 March 2023. The legislation will be included in the Spring Finance Bill 2023.   

Investment Zones  

The Budget announced that 12 Investment Zones would be established across the UK, subject to successful proposals. The legislation will be included in the Spring Finance Bill 2023. Building on Freeports legislation, section 113 Finance Act 2021 will be amended to allow the designation of special tax sites in or connected with Investment Zones.

The special tax sites will be subject to government approval and designated using secondary legislation. Once designated, special tax sites will benefit from a package of tax reliefs, including SDLT relief, enhanced capital allowances for plant and machinery, enhanced structures and buildings allowances, and secondary Class 1 National Insurance contributions (NICs) relief. The reliefs will be time-limited, with the exact end date confirmed at a future date. 

For special tax sites in England, SDLT relief will be available for purchases of land or buildings, subject to that property being acquired for qualifying commercial purposes and used for such purposes in a control period of up to 3 years.  

More information about the relief can be found in the tax information and impact note published at Investment Zone special tax sites – GOV.UK (www.gov.uk). 

Restriction of Charitable Reliefs to UK Charities 

Legislation in the Spring Finance Bill 2023 will amend the tax definition of a charity for several tax purposes, including SDLT and ATED.  

Currently, charities located in the UK, EU or the EEA can qualify for charitable tax reliefs in the UK. Still, following the change, only those charities that come within the jurisdiction of the High Court in England, Wales or Northern Ireland, or the Court of Session in Scotland will qualify for UK charitable tax reliefs.  

These changes take effect from 15 March 2023 for any charity that has not asserted its status for charitable tax reliefs. For non-UK charities that had asserted their status for charitable tax reliefs by 15 March 2023, there will be a transitional period until April 2024.

From April 2024, all non-UK charities will no longer be eligible to claim UK charitable tax reliefs.  A tax information and impact note is available at Restriction of charitable reliefs to UK Charities – GOV.UK (www.gov.uk)