The Government views "Freeports" as playing a crucial part in driving the UK economy post-COVID-19.

What are the objectives for Freeports?

The Freeport model has three key objectives;

  1. acting as national hubs for global trade and investment;
  2. creating hotbeds of innovation; and,
  3. promoting regeneration.

Where are the Freeport sites?

There are currently eight Freeport sites across the country;

  • East Midlands Airport;
  • Felixstowe & Harwich;
  • Humber;
  • Liverpool;
  • Plymouth;
  • Solent;
  • Thames; and
  • Teeside.

What are the advantages of investing in Freeport sites?

To encourage investment and growth in these areas, a number of tax incentives have been introduced, including relief from SDLT.

Relief from SDLT is available for acquisitions of land or buildings in a designated Freeport tax site if the land or buildings will be used in a qualifying way. The relief can be claimed for acquisitions made between the date that the Freeport is designated and 30 September 2026.

The relief is available where the purchaser intends to use the land or buildings in a qualifying way. A qualifying way is:

  • in a commercial trade or profession
  • for development or redevelopment for resale
  • for commercial letting of the land or buildings - as long as they are not used as residential property

The relief is not available where the land or buildings were or are:

  • purchased inside a Freeport tax site before it was designated or after 30 September 2026
  • to be used as residential property
  • to be developed or redeveloped to become residential property
  • to be held as stock of a business to be resold without having been developed or redeveloped

Full relief from SDLT can be claimed on the total purchase price where at least 90% of the purchase price is for qualifying land or buildings.

Where less than 90% of the purchase price relates to qualifying land or buildings, the relief reflects the percentage of the land or buildings which qualify. No relief is available if less than 10% of the total purchase price is for qualifying land or buildings.

How can Verfides help?

Our team of experts is ready to help you with:

  • Preparing computations of the SDLT payable for a given real estate acquisition
  • Advice on structuring the acquisition of real estate to minimise the SDLT payable
  • All aspects of the taxation of UK real estate ownership, acquisition, disposal and succession planning

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.