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
    differentcalculator 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
    .

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