SDLT: alternative property finance relief and musharaka—FA 2003, s 71A


Produced in partnership with Sarah Squires of Old Square Tax Chambers
Practice notes

SDLT: alternative property finance relief and musharaka—FA 2003, s 71A


Produced in partnership with Sarah Squires of Old Square Tax Chambers

Practice notes
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A musharaka is a form of Islamic financing that operates as a form of shared ownership arrangement and is therefore similar to a partnership or joint venture structure. It can be used as a Shari’a-compliant alternative to acquiring land using a mortgage (see an example below at: SDLT consequences of the first transaction) or as a way of refinancing an existing loan secured over land. For more information on musharaka, see Practice Notes:

  1. •

    Musharaka—tax consequences of diminishing shared ownership arrangements—what is musharaka?

  2. •

    The structure and elements of a musharaka transaction

Where land is situated in England or Northern Ireland, the stamp duty land tax (SDLT) relief that is most relevant to a musharaka is set out in section 71A of the Finance Act 2003 (FA 2003) (land sold to a financial institution and leased to another person).

This Practice Note:

  1. •

    outlines the conditions for relief under FA 2003, s 71A

  2. •

    illustrates the application of this relief by reference to a musharaka structure, and

  3. •

    is

Sarah Squires
Sarah Squires

Old Square Tax Chambers

Sarah is a barrister at Old Square Tax Chambers, having been called to the bar in 2017. She has significant corporate tax experience, having practised a as a solicitor in leading City firms prior to re-qualifying as a barrister. She started her professional career in the tax department of Linklaters and then, following a move to Clifford Chance LLP in 2000, became a partner in their tax group in 2002. Sarah is a member of the Law Society Tax Law Committee. In addition, she also acts as a consultant to various trade and other representation bodies on tax policy matters. Sarah's practice is focused on general business and corporate tax matters, including in relation to real estate, finance and capital markets transactions.

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Jurisdiction(s):
United Kingdom
Related legal acts:
Key definition:
Musharaka definition
What does Musharaka mean?

A contractual partnership; participation financing.

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