The Co-ownership Contractual Schemes (Tax) Regulations 2025

Stamp duty land tax: seeding relief

58.—(1) Part 4 of FA 2003(1) is amended as follows.

(2) In section 65A (PAIF seeding relief and COACS seeding relief)—

(a) for the heading substitute “Seeding relief”;

(b) in subsection (2)(b) for “(COACS seeding relief)” substitute “and Reserved Investor Funds (Contractual Schemes) (co-ownership scheme seeding relief)”;

(c) in subsection (5)—

(i) in the words before paragraph (a), for “COACS” substitute “co-ownership scheme”;

(ii) in paragraph (a), after “scheme” insert “or a Reserved Investor Fund (Contractual Scheme)”;

(d) after subsection (6) insert—

“(7) Co-ownership scheme seeding relief may not be claimed where the purchaser is a Reserved Investor Fund (Contractual Scheme) if the scheme—

(a) has previously claimed such relief, and

(b) following that claim ceased, at any time, to be a Reserved Investor Fund (Contractual Scheme).”.

(3) Section 81 (further return where relief withdrawn) is amended as follows—

(a) in subsection (1)(bb) for “COACS” substitute “co-ownership scheme”;

(b) in subsection (1A)(c) for “COACS” substitute “co-ownership scheme”;

(c) in subsection (1B)—

(i) in paragraph (g) for “COACS” substitute “co-ownership scheme”;

(ii) in paragraph (h) for “COACS” substitute “co-ownership scheme”;

(d) in subsection (4)(bb)—

(i) for “COACS” substitute “co-ownership scheme”, and

(ii) in sub-paragraph (i), omit “authorised”.

(4) In section 86 (payment of tax)—

(a) in subsection (2)(bb) for “COACS” substitute “co-ownership scheme”;

(b) in subsection (5)—

(i) omit the “and” at the end of paragraph (a), and

(ii) after paragraph (b) insert “, and

“(c) regulation 31 of the Co-ownership Contractual Schemes (Tax) Regulations 2025 (withdrawal of seeding relief: application to postpone payment of tax where appeal against relevant decisions).”.

(5) In section 87 (interest on unpaid tax)—

(a) in subsection (1A), after “(c)” insert “or section 87A(4) or (6)”;

(b) in subsection (3)(a)(iib), (azc) and (azd) for “COACS” substitute “co-ownership scheme;

(c) at the end of subsection (3)(a)(iib), insert “(except in a case to which section 87A applies)”;

(d) at the end of subsection (4), insert “(except in a case to which section 87A applies)”.

(6) After section 87 insert—

“87A.    Interest on unpaid tax: cases involving Reserved Investor Fund (Contractual Schemes)

(1) This section makes provision about the meaning of “relevant date” for the purposes of section 87 in the cases set out below where co-ownership seeding relief in relation to a land transaction has been withdrawn under paragraph 13 of Schedule 7A as a result of the purchaser ceasing to be a Reserved Investor Fund (Contractual Scheme) (and, accordingly, ceasing to be a co-ownership contractual scheme).

(2) In those cases this section applies instead of section 87(3)(a)(iib) for the purposes of determining the relevant date.

(3) The first case is where—

(a) the purchaser ceases to be a Reserved Investor Fund (Contractual Scheme) by virtue of breaching the ownership requirement or the restriction requirement, and

(b) the effective date of the relevant land transaction fell before the start of the cure period that applied in relation to the breach,

and in such a case the “relevant date” is the date on which the breach mentioned in paragraph (a) first occurred.

(4) The second case is where—

(a) the purchaser ceases to be a Reserved Investor Fund (Contractual Scheme) by virtue of breaching the ownership requirement or the restriction requirement, and

(b) the effective date of the relevant land transaction fell within the cure period that applied in relation to the breach,

and in such a case the “relevant date” is the effective date of the relevant land transaction.

(5) The third case is where—

(a) the purchaser ceases to be a Reserved Investor Fund (Contractual Scheme) as a result of ceasing to meet the UK property rich condition in regulation 12 of the 2025 Regulations, and

(b) regulation 19 of those Regulations applied in relation to the scheme,

and in such a case the “relevant date” means the date on which regulation 19 first applied in relation to the scheme.

(6) The fourth case is where—

(a) the purchaser ceases to be a Reserved Investor Fund (Contractual Scheme) by virtue of the scheme no longer being able to rely on regulation 9 of the 2025 Regulations to meet the ownership requirement, and

(b) the effective date of the relevant land transaction fell at a time when the scheme was relying on that regulation to meet the ownership requirement,

and in such a case the “relevant date” means the effective date of the relevant land transaction.

(7) In this section—

“the 2025 Regulations” means the Co-ownership Contractual Schemes (Tax) Regulations 2025;

“cure period”—

(a)

in relation to a breach of the ownership requirement, means—

(i)

“the 9 month period” that applies in relation to the breach under regulation 16 of the 2025 Regulations (as defined in that regulation), or

(ii)

if a notice is given in relation to the breach under paragraph (2) of that regulation, the period beginning with the day on which the breach occurred and ending on the day on which the notice is given;

(b)

in relation to a breach of the restriction requirement, means—

(i)

“the 9 month period” that applies in relation to a breach under regulation 18 of the 2025 Regulations (as defined in that regulation), or

(ii)

if a notice is given in relation to the breach under paragraph (3) of that regulation, the period beginning with the day on which the breach occurred and ending on the day on which the notice is given;

“ownership requirement” has the meaning given in regulation 5 of the 2025 Regulations;

“relevant land transaction” means the land transaction to which the withdrawal of seeding relief relates;

“restriction requirement” has the meaning given in regulation 10(1) of the 2025 Regulations;

“UK property rich condition” has the meaning given in regulation 12 of the 2025 Regulations.”.

(1)

Section 65A was inserted by paragraph 3 of Schedule 16 to the Finance Act 2016. Sections 77 and 77A were substituted for section 77 by the Finance Act 2008 (c. 9). Section 77 was amended by paragraph 17 of Schedule 3 to the Scotland Act 2012 (c. 11), paragraph 5 of Schedule 39 to the Finance Act 2013 (c. 29) and paragraph 9 of Schedule 1 to the Stamp Duty Land Tax Act 2015 (c. 1). Section 81 was amended by section 302(5) of, and paragraph 17(3) of Schedule 39 to, the Finance Act 2004 (c. 12), section 80(4)(b) of, and paragraph 1 of Schedule 27 to, the Finance Act 2007 (c. 11), paragraph 3 of Schedule 40 to the Finance Act 2013, paragraph 7 of Schedule 16 to the Finance Act 2016, section 46(4) of the Finance Act 2019 (c. 1), paragraph 2 of Schedule 17 and paragraph 3 of Schedule 23 to the Finance Act 2021 (c. 26) and paragraph 3 of Schedule 23 to the Finance (No. 2) Act 2023 (c. 30). Section 86 was amended by section 80(6)(a) and 80(6)(b) of the Finance Act 2007, paragraph 26 of Schedule 61 to the Finance Act 2009 (c. 10), paragraph 6 of Schedule 40 to the Finance Act 2013, paragraph 8 of Schedule 16 to the Finance Act 2016, section 46(6) of the Finance Act 2019, paragraph 5 of Schedule 17 and paragraph 6 of Schedule 23 to the Finance Act 2021 and paragraph 6 of Schedule 23 to the Finance (No. 2) Act 2023. Section 87 was amended by paragraphs 17(4)(a), 19(3) and 22(5) of Schedule 39 to the Finance Act 2004, paragraph 5 of Schedule 22 to the Finance Act 2011 (c. 11), paragraph 4 of Schedule 41 to the Finance Act 2013, paragraph 9 of Schedule 16 to the Finance Act 2016, section 46(7) of the Finance Act 2019, paragraph 6 of Schedule 17 and paragraph 7 of Schedule 23 to the Finance Act 2021 and paragraph 7 of Schedule 23 to the Finance (No. 2) Act 2023.