SDLT relief for charities is withdrawn if within three years of the date of the original transaction the purchaser ceases to be established for charitable purposes or if the subject matter of the transaction is held for non-charitable purposes. SDLT will then become chargeable:

• on the amount that would have been chargeable in respect of the original transaction were it not for the application of the charity relief in the first instance or
• on an appropriate portion of the SDLT if a derived interest is held.

There are also withdrawal provisions if the original exemption from SDLT was based on the ‘greater part’ of the transaction being retained for charitable purposes. In cases where full SDLT relief was granted on the original acquisition but the charity subsequently disposes of part of the property, SDLT relief will be withdrawn on the appropriate proportion.

If a charity acquires a building and intends to hold 90 per cent for ongoing charitable purposes, full SDLT relief will be granted on the initial acquisition and, subsequently, if a 10 per cent share is disposed of within three years of the original acquisition, 10 per cent of the SDLT relief will be clawed back.