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   Goods
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.




Comments

Post a Comment

Popular posts from this blog

Update on US Sales and Use Taxes - Retro-activity and VDAs

Image
The ongoing drama around sales and use taxes continues.  Despite the fact that forty-one states, two U.S. territories, and the District of Columbia joined the amicus brief supporting South Dakota’s position before the Supreme Court and stating otherwise, the State of California is now retroactively seeking sales tax from out-of-state online merchants, going back as far as 2012. 
How is this possible?  Prior to Wayfair, there were many other kinds of nexus statutes on the books of states that businesses had to comply with, e.g., “click-thru nexus”, “cookie nexus”, “affiliate nexus”, “marketplace nexus”, etc. These nexus rules were variations on the physical presence test under Quill.  However, post-Wayfair, those laws are still on the books and so far, remain effective for current as well as past years.  And there are two risks here.
.The first risk is that these rules might have applied to the business in the past (whether it knew it, should have known it or not) and so in its zeal t…
Read more

The EU - Taxing Non Resident Citizens?

Image
Most casual observers like to say that the US is the only country that taxes its non resident citizens.  
For tax practitioners we know that this is not true.  International entrepreneurs and expats who travel widely know Eritrea.  But what about other OECD nations.  We know that under some circumstances, the non-resident citizens of the following countries still pay taxes – Australia - http://www.mooresrowland.tax/2019/11/australia-tax-residence-and-fiscal.html Canada - http://www.mooresrowland.tax/2019/11/becoming-tax-non-resident-in-canada.html UK - http://www.mooresrowland.tax/2019/10/developments-in-provision-of-private.html


Now what about continental Europe? 
Tax residency is more than the 183 day rule and specific steps and conditions are required for tax non-residency.  Failure to adhere to these rules has meant that they owe money in back taxes and face penalties and interest.  I have seen it referred to as the “nomad tax trap”
One nomad told me that the EU has no authority…
Read more

"Responsible Person" rules in the wake of Wayfair - You can be PERSONALLY Liable for Sales and Use Taxes

Image
We previously wrote on this topic -  http://www.mooresrowland.tax/2019/10/navigating-post-wayfair-world.html http://www.mooresrowland.tax/2019/10/states-business-activity-tax-nexus.html

If you're new to remote selling, then I suggest you first start here -  http://www.mooresrowland.tax/2019/11/6-steps-to-starting-your-location.html

Sales and use taxes are "trust fund taxes," or taxes that the collector holds "in trust" for the state until remittance. These taxes are imposed not on the seller but on the purchaser or user. As such, the laws passed in the wake of Wayfair do not increase tax liability for sellers but allow states to shift the collection and remittance obligation from the customer to the seller. Sales-and-use-tax obligations, however, do not necessarily stop at the entity level, so even conducting business as a corporation does not necessarily protect owners from liability. This realization can come as a shock to those who find themselves saddled with the…
Read more

Citizenship Based Taxation in Singapore?

Image
INTRODUCTION

1. An individual who is a resident of Singapore for tax purposes is taxable on his income derived from Singapore as well as income from overseas remitted to Singapore. A non-resident individual is taxable on his income derived from Singapore only. 
2. A Singaporean who goes on his own or is sent by his employer to work overseas is treated as a tax resident during the period of his overseas employment because he intends to return to Singapore. Consequently, he is taxed in Singapore on that portion of his overseas employment income which he remits to Singapore. Should his overseas employment be already taxed there, credit for the foreign tax is allowed if the country he works in has a tax treaty with Singapore or is one of the countries where credit for foreign tax is allowed without a tax treaty. 


ADMINISTRATIVE PRACTICE 
3. To remove any disincentive for Singaporeans to work abroad, IRAS has, as an administrative practice, been allowing individual taxpayers the choice o…
Read more

Tax Evasion vs Tax Avoidance

Image
I frequently have discussions on tax evasion vs tax avoidance. So many people think that any mention of using different jurisdictions, offshore accounts etc seems "suspicious".

There is tax avoidance or tax planning which is completely legal.

But tax evasion is illegal.

Within recent time however, there are cases where avoidance is declared as illegal. How does this work? Well taxation has been receiving much attention and this means that the debate has been an evolving one.  It is impossible to discuss this area in Common Law jurisdictions without reference to case law.  Impossible.  Simply reviewing code sections is insufficient. 
In the UK, we go back to 1936 where there was the famous Duke of Westminster’s case (1936) AC 1, where Lord Tomlin proclaimed:
Every man is entitled, if he can, to order his affairs so as that the tax attaching under the appropriate Acts is less than it otherwise would be. If he succeeds in ordering them so as to secure this result, then, how…
Read more