What is SDLT?

Stamp duty land tax is a tax on the acquisition of land in England and Northern Ireland. Scotland charges Land and Buildings Transaction Tax and Wales charges Land Transaction Tax, instead of SDLT.

What are the rates of SDLT?

There are five different rate structures:

  • “Normal” Table A Residential: 0% – 12%
  • “Higher rates” Table A: 3% – 15%
  • Table B Non-residential and mixed 0% – 5%
  • Higher rate of 15% for non-natural purchasers of dwellings above £500,000
  • First-time buyer rates: 0% up to £300,000 and 5% on balance not exceeding £500,000

What are the stamp duty rates for residential property?

BandBasic residential SDLT ratesHigher SDLT rates
£0–£125k0%3%
£125k–£250k2%5%
£250k–£925k5%8%
£925k–£1.5m10%13%
£1.5m+12%15%

What is SDLT charged on?

SDLT is charged on land transactions in England and Northern Ireland according to the price paid. A land transaction is any acquisition of a chargeable interest and this includes not only freeholds and leases but also interests, rights and powers over land other than exempt interests such as mortgages and licenses to use land.

When is SDLT payable?

Since 1 March 2019 any SDLT is payable to HMRC within 14 days of the effective date of the land transaction. The effective date is normally completion but it can be sooner if for example the buyer goes into occupation before completion or he pays 90% or more of the total price to the seller ahead of completion.

When is stamp duty payable on commercial leases?

When the whole or part of the consideration for a lease consists of rent the SDLT is calculated as a percentage of the net present value of the rent payable over the term of the lease at rates of up to 1% on residential leases and 2% commercial leases. The premium or capital price element of the lease consideration is charged to SDLT at the normal sale rates above.

Can I avoid SDLT if I buy off-plan?

Yes you can avoid SDLT if you buy off-plan and then sell your contract on to another buyer before completion, occupation or 90% or more of the price is paid to the developer.

When does stamp duty apply instead of SDLT?

The old stamp duty applies to land transactions that broadly speaking were carried out before 1 December 2003 (the date that SDLT was introduced) and it continues to apply to shares, bearer instruments and certain partnership transactions. You will need to send the relevant transfer document to the Stamp Office for physical stamping if you want that document to be legally enforceable. For instance I recently advised on the stamping of a transfer arising out of a land transaction in 1846.

Patrick is authorised by the Bar Standards Board to do Public Access Work and litigation which means that he can work directly with clients and deal directly with HMRC on their behalf. Patrick works on the basis of fixed fees agreed up-front via his Clerk and he does not use open ended hourly rates.

Do you have an SDLT or stamp duty issue that needs resolving or require advice on the liability of a past or a planned transaction? If so, please contact Patrick Cannon here for an initial discussion about the options open to you.

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