Jurisdiction(s):
United Kingdom

Related legal acts

Key definition

Musharaka definition

What does Musharaka mean? Musharaka describes, in legal practice, a Shariah-compliant contractual partnership or participatory (participation) financing arrangement in which two or more parties contribute capital to a venture and share profits as agreed and losses in proportion to capital contributed. It is not defined in UK or Irish legislation or case law; it is a descriptive term from Islamic jurisprudence used across Islamic finance transactions and documentation. Key legal features include joint ownership of the venture or asset, shared commercial risk, profit distributions (not interest), and the ability to delegate management to one partner subject to agreed controls and oversight. It is commonly...

SDLT relief for musharaka (alternative property finance): FA 2003 s 71A - conditions, transactional treatment, compliance and anti-avoidance (England and Northern Ireland)

Published by a LexisNexis Tax expert

Practice notes

Musharaka

A musharaka is an Islamic finance arrangement built on shared Ownership, much like a partnership or joint venture. It offers a Shari’a-compliant way to acquire land without a conventional mortgage (see the example below: SDLT consequences of the first transaction) or to refinance a loan already secured on land...

Practice Notes

Musharaka—tax consequences of diminishing shared ownership arrangements—what is musharaka?
The structure and elements of a Musharaka transaction

SDLT relief under FA 2003, s 71A

For land in England or Northern Ireland, the most relevant stamp duty land tax relief for a musharaka is contained in section 71A of the Finance Act 2003 (land sold to a financial institution and leased to another person)...

This Practice Note

sets out the conditions for relief under FA 2003, s 71A
shows how the relief operates by reference to a musharaka structure
proceeds on the basis that:
- the only asset held within the musharaka is land located in England, and
- the eventual owner is not a first-time buyer of residential property...

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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....

Web page updated on 21/05/2026

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