UK: Major Extension of Stamp Duty ‘Disadvantaged Areas’ Relief

Last Updated: 9 March 2003
Article by Ian Hyde

A significant new stamp duty exemption will be brought in by the Spring Budget. It will provide a complete exemption from duty for transfers and the premium element of new leases for commercial property in disadvantaged areas. Buyers and sellers of commercial property should plan now to take advantage of the new relief.

Action Points

If you are currently involved in any transactions in relation to non-residential property in a disadvantaged area, consider postponing the transaction until after the Budget to take advantage of the exemption. The date for the Budget has not yet been set, but it is anticipated to be in early March. Note particularly that:

  • whilst the transitional provisions have not yet been published indications are that the exemption will be available for transfers executed after the exemption comes into force, pursuant to contracts exchanged before the measure comes into force. If exchange has already occurred, consider negotiating with the seller to postpone the transfer until after Budget Day;
  • where you are involved in negotiating the grant of a lease of non-residential land in a disadvantaged area, consider postponing not only the grant of the lease but also exchange of the agreement for lease until after Budget Day. An agreement for lease is chargeable with the same duty as if it were an actual lease, so whilst transitional arrangements may relieve such arrangements, the safer route must be to delay exchange of the agreement for lease until after Budget Day.

Check which of the properties in your property portfolio is situated in a disadvantaged area by using the post code search - note that it may not be advisable to rely solely on the on-line post code search, double check with the Stamp Office if necessary.If any property in your portfolio does not have a post code, to claim the exemption you will need a map of the property with sufficient detail to pinpoint its location, together with details of which ward the property falls within (the ward boundaries should be drawn on the map if possible).

When considering whether or not to postpone a transaction until after Budget Day to take advantage of the exemption, consider the risk that the exemption may not actually be brought in or that the Budget may bring in new anti-avoidance legislation on any tax (not just stamp duty) which could adversely affect the transaction.

If a transaction does not involve non-residential land in a disadvantaged area, or if it is not possible to postpone a transaction until after Budget Day, consider implementing a scheme to mitigate the stamp duty liability Many such schemes are available and our Property Tax team has considerable experience in successfully implementing them. We would be happy to discuss the possibility of putting such a scheme in place with you.

Existing Reliefs

The first phase of this stamp duty relief is in fact already in force. It was brought in with effect from 30 November 2001 and provides an exemption from stamp duty for purchases or grants in relation to property in designated ‘disadvantaged areas’ of the UK, where the consideration, or premium for lease, does not exceed £150,000 (inclusive of VAT).

The classification of disadvantaged areas is based on electoral wards (except in Scotland where it is based on post codes).

In order to administer the exemption, the Stamp Office ask that everyone who claims the exemption must let them know the post code for the property. The Stamp Office website contains a post code search to enable people to input the relevant property post code and assess whether the property in question is eligible for the relief.

Note that the disadvantaged areas list has been based on ward information from 1991 (Northern Ireland) and 1998 (England and Wales). In some places there have been boundary or other administrative changes since these dates. Where this has happened the post code will be the key to determining whether the property falls within a qualifying area. In these circumstances it is advisable to telephone the Stamp Office to check whether the exemption is available.

March 2003 Changes

In April 2002, the Chancellor announced more details of the proposed ‘second phase’ of the exemption subject to the European Commission authorising it for state aid purposes. This authorisation has now been obtained and the Government has announced that it will implement the relief on Budget Day (not yet announced but expected in March).

The second phase of the stamp duty exemption scheme for disadvantaged areas will:

  • introduce an unlimited exemption from stamp duty for the purchase price or premium on a transfer or grant of a lease of non-residential property in a disadvantaged area; and
  • ensure that the relief will extend to lease duty on rent on the grant of new leases in disadvantaged areas but only in some circumstances (the details of which have not yet been published).

The £150,000 cap will therefore still apply to residential property in disadvantaged areas. The legislation defines ‘residential property’. A dwelling is ‘residential’. Buildings used as hospitals, student halls of residence, hotels and prisons are all examples of non-residential use. The purchase of six or more separate dwellings (via a single contract) is also non-residential and so will have an unlimited relief.

Disadvantaged Areas

A list of the areas designated as disadvantaged can be accessed via the Inland Revenue website:

The Stamp Office's post code search can be accessed via this link:

Procedure to Claim the Exemption

A document must include an appropriate certificate, for example ‘I/we certify that this is an instrument on which stamp duty is not chargeable by virtue of the provisions of Section 92 Finance Act 2001’. It must then be formally adjudicated, and a certified copy should be included in the application.

Under phase 1 (and for residential property under phase 2) where the consideration is £150,000 or less, a document should also contain a £250,000 certificate of value.

A payment for lease duty on the rental element of a lease must still be made under phase 1.

This update is not intended to be a definitive analysis of legislative or other changes and professional advice should be taken before any course of action is pursued.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

In association with
Related Topics
Related Articles
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions