Charitable organisations should consider if they have overpaid SDLT following the decision of the Court of Appeal in the cases of The Pollen Estate Trustee Company Limited and Kings College London v HM Revenue & Customs (HMRC).
HMRC have highlighted that the 'substance of that judgment was that, when a charity purchases property jointly with another person who is not a charity ("non-charity purchaser"), relief from SDLT under paragraph 1 of Schedule 8 to the Finance Act 2003 is available on the charity’s share of the property. Relief is subject to a test based on the extent to which the charity’s share is used for charitable purposes.' To illustrate the position the following simple example was provided: 'A charity and a non-charity jointly purchase a non- residential property for £800,000, each owning a 50% undivided share in the property. The charity intends to use its portion of the property wholly for charitable purposes. Under section 55 the SDLT due on the purchase is £32,000 (£800,000 x 4%). Charities relief is available on £16,000 of this, with £16,000 SDLT payable on the proportion of the interest held by the non-charity purchaser.'
Charitable organisations should consider their position and any potential claim.