Do You Pay Stamp Duty on a Commercial Lease?
SDLT on commercial leases can be very complex. Many tenants are unaware that Stamp Duty Land tax is payable on commercial leases – and may be...
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Patrick Cannon has over 35 years of experience in Stamp Duty Land Tax law, initially as a solicitor and then as a specialist tax barrister.
SDLT can be very complex, especially if you are seeking ways to mitigate or avoid paying the tax. While there are some legitimate circumstances where you can make an SDLT saving the opportunities are limited, it is important to consult with an experienced tax lawyer before entering into any schemes.
Whether you are hoping to avoid or reduce SDLT, you have been offered an SDLT avoidance scheme, or you are facing HMRC investigation into your use of such a scheme, click here to contact Patrick Cannon for impartial advice and expert representation.
Stamp Duty Land Tax (SDLT) is the tax on all property in England and Northern Ireland – both commercial and residential – which is levied on the price of the property or in some cases its market value.
SDLT carries 3% higher rates on second and additional homes.
There are exemptions from SDLT, but only in certain circumstances, such as buying property as a first-time buyer, or buying a property valued at or under £125,000. Charities and social landlords can also get SDLT relief.
It is also possible to avoid paying the 3% higher rate of SDLT on additional homes, but again, only in very specific circumstances, such as multiple dwellings relief, mixed-use properties or in a divorce or separation.
The 2% surcharge on SDLT applied to non-UK residents can also be mitigated, for example, if the purchaser is present in England or Northern Ireland for at least 183 in a continuous 365 days period, or if an off-plan property is ‘flipped’ ie sold on without completing, to a UK resident.
Any scheme that aims to exploit gaps in SDLT legislation that were not intended by Parliament is known as an SDLT avoidance, or SDLT mitigation scheme.
A common example of an avoidance scheme is one that turns a single-step purchase of property into a multi-step series of transactions. By applying different SDLT exemptions to each step, the intended result is that no or a reduced amount of SDLT was payable on the overall transaction.
The Finance Act of 2006 introduced a rule to counter this type of Stamp Duty avoidance scheme.
Many schemes offer savings on SDLT by breaking a sale down into a number of smaller purchases – each of which carries lower SDLT rates. The Anti-Avoidance Rule makes the buyer liable for the sum total of all purchases. You may be liable to pay retrospectively for SDLT savings you made when using such a scheme, or potentially be facing a fine or litigation.
If you are facing an HMRC investigation where section 75A is in issue, an experienced tax barrister will guide you through the process, and, if necessary, represent you in a tax tribunal.
If you have been mis-sold an SDLT mitigation scheme, Patrick Cannon can offer expert advice and representation – whether dealing with an HMRC investigation, defending you against HMRC in a tax tribunal, getting compensation from a scheme provider or reclaiming double-charged SDLT.
Patrick Cannon has been advising on Stamp Duty for over 35 years, first as a solicitor and latterly as a barrister. This experience has given him expertise in helping individuals and businesses negotiate the complexities of Stamp Duty, SDLT reliefs and higher rates of SDLT.
As a barrister, he represents individuals and companies in appeals against HMRC and can offer advice that could save your company money.
For tax advice and representation in a Stamp Duty Land Tax case with one of the UK’s leading specialist SDLT tax advisers, please contact Patrick Cannon, an SDLT advisor here.
Yes, there are some exemptions to SDLT in England and Northern Ireland.
Most schemes that promise to find loopholes in SDLT are not legitimate. SDLT advisors can only ensure that you are maximising or benefitting from legitimate SDLT reliefs or exemptions (for example, multiple dwelling relief, mixed-use properties, uninhabitable properties etc) although the operation of these SDLT reliefs and exemptions can be very complicated.
It is always advisable to only use reputable law firms or barristers if you are looking for ways to mitigate your SDLT.