An agreement involving an option which allowed a company to purchase a £9.3 million property in two stages and advantaging the seller too, fell foul of both SDLT and ATED relief as the option was not ‘acquired exclusively’ for re-development as claimed.


In Investment and Securities Trust Limited v HMRC [2024] TC09109,

  • Ms Voice, a director of Investment and Securities Trust Limited (IST) owned a property that was estimated to be worth £13.5m following redevelopment.
  • She wished to purchase another property, IST agreed to purchase the property, but could not raise the full amount of cash.
  • Under an Option Agreement IST agreed to purchase the Property for £9,300,000, paying £4,650,000, which formed part of the purchase price for the grant of the option. 
  • After acquiring the option, IST decided not to develop the property and it was eventually sold for £6.9m.

The company claimed higher rate Stamp Duty Land Tax (SDLT) relief and Annual Tax on Enveloped Dwellings (ATED) relief on purchase of the Option on the basis it had acquired the Option to redevelop the property.

HMRC enquired into the purchase and raised assessments on the basis that it was ineligible for relief and was liable to an additional SDLT of £372,000, plus interest of £35,984.62.

ATED was charged as follows:

Chargeable Period

ATED charged


1 April 2014 to 31 March 2015



1 April 2017 to 31 March 2018



1 April 2019 to 2 January 2020



The company appealed against the closure notice to the First Tier Tribunal (FTT).

On appeal, the FTT agreed with HMRC that higher rate relief for SDLT and the ATED depended on the property being ‘acquired exclusively’ for one or more purposes including development or redevelopment and resale in the course of a property development trade

On the basis of the evidence it found that IST had acquired the option for the following reasons:

  • for the purposes of addressing Ms Voice’s pressing need for funds
  • to prevent the sale of the Property to a third party
  • to provide IST with time to raise the funds to acquire and develop the Property. 

 It concluded that IST did not acquire or hold the interest in the Property for the exclusive purpose of its property development trade.

In terms of the occupation of the property by a connected party, Ms Voice, it also found that although the Option agreement provided that she must vacate the property, in her capacity at that time as a freeholder she was still able to live there, which she did for a short period before she found another home.

The company's appeal was dismissed.

Useful guides on this topic

Annual Tax on Enveloped Dwellings (ATED) 
Freeview: What is ATED? When does ATED apply? What relief is available and how is it claimed? What are the ATED filing requirements?

Annual Tax on Enveloped Dwellings (ATED) (subscriber guide)
The Annual Tax on Enveloped Dwellings (ATED), originally called the Annual Residential Property Tax, is an annual charge on UK dwellings held by a non-natural person, e.g. a company.

Higher Rate Stamp Duty Land Tax (SDLT)
A guide to the Stamp Duty Land Tax (SDLT) higher rate charge on residential property, when it applies and what reliefs are available to exempt buyers from the charge.

Stamp Duty Land Tax (SDLT)
What is Stamp Duty Land Tax (SDLT)? What are the rates of Stamp Duty Land Tax (SDLT)?

External links

Investment and Securities Trust Limited v HMRC [2024] TC09109