Tax Planning for UK Investments - Stamp Duty
S.42 of Finance Act 2003. You must pay Stamp Duty Land Tax (SDLT) if you buy a property or land over a certain price in England, Wales and Northern Ireland.
- · The current SDLT threshold is £125,000 for residential properties and £150,000 for non-residential land and properties.
- · SDLT no longer applies in Scotland. Instead you pay Land and Buildings Transaction Tax when you buy a property.
You pay the tax when you:
- · buy a freehold property
- · buy a new or existing leasehold
- · buy a property through a shared ownership scheme
- · are transferred land or property in exchange for payment, eg you take on a mortgage or buy a share in a house
Rates - How much you pay depends on whether the land or property is:
- · residential
- · non-residential or mixed-use
- · You can use HM Revenue and Customs’ (HMRC) Stamp Duty Land Tax calculator to work out how much tax you’ll pay. (There’s a different calculator for leases.)
- You may be able to reduce the amount of tax you pay by claiming relief, eg if you buy more than one property (‘multiple dwellings’).
- The value you pay SDLT on (the ‘consideration’)
- The total value you pay SDLT on (sometimes called the ‘consideration’) is usually the price you pay for the property or land.
- Sometimes it might include another type of payment like:
o works or services
o release from a debt
o transfer of a debt, including the value of any outstanding mortgage
o Find out how to work out the consideration if your situation is complicated.
How and when to pay
- · You must send an SDLT return to HMRC and pay the tax within 30 days of completion.
- · If you have a solicitor, agent or conveyancer, they’ll usually file your return and pay the tax on your behalf on the day of completion and add the amount to their fees.
- · If they don’t do this for you, you can file a return and pay the tax yourself.
- · There are certain situations where you don’t need to send a return.