Property Practice - Stamp Duty Land Tax Flashcards

1
Q

Return

A

To be filed within 14 calendar days of completion even if no SLDT is due

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2
Q

Tax payable

A

On purchase price of the property (inclusive of VAT)

Amount of tax payable based on money or money’s worth - can be paid on any form of consideration given (e.g. mortgage, work performed)

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3
Q

Exempt transactions

A
  • Property transferred as a gift
  • Property transferred to a spouse or former spouse on divorce
  • Property transferred under a variation of a will within two years of the decedent’s death
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4
Q

Rates

A
  • Depend on whether land for residential or non-residential properties and value of consideration
  • Bands are:
  • 0%: up to £250k (residential); up to £150k (non-residential)
  • 2%: £150,001 - £250,000 (non-residential only)
  • 5%: £250,001 - £925,000 (residential); Over £250k (non-residential)
  • 10%: £925,001 - £1.5m (residential only)
  • 12%: Over £1.5m (residential only)
  • If a person already owns a residential property and buys an additional residental property an additional 3% is charged in each band (including nil rate bracket) - higher rates not charged for transactions under £40,000
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5
Q

Leases

A

SDLT owed on premium and on net present value of rent payment

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6
Q

Premium

A

Taxed the same way as residential or commercial sales

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7
Q

Net present value

A

Rates will be given in the exam but are:

  • 0% for first £150k
  • 1% for NPV amounts greater than £150k but not more than £5m
  • 2% for amounts over £5m
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8
Q

Reliefs

A
  1. First-time buyer relief: provided it will be used as main or only residence
  2. Multiple dwellings relief
  3. Six or more residential properties
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9
Q

First-time buyer relief

A
  • 0% on first £425,000
  • 5% rate on any remainder up to £625,000
  • Normal rates if cost greater than £625,000 (i.e. no relief applies)
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10
Q

Multiple dwellings relief

A
  • SDLT calculated on average (mean) price paid
  • SDLT then multiplied by number of properties purchased
  • Paid on account of each property as if it was purchased separately
  • Each band increased by 3% as multiple residential properties being purchased
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11
Q

Property given in exchange for shares in a company

A

Amount of SDLT payable based on the fair market value of the land

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12
Q

Penalties

A

Interest may be charged if SDLT paid late

Penalty may be imposed if the land transaction form is submitted late (irrespective of whether SDLT is actually payable):

  • Up to three months late: penalty of £100 is automatically imposed
  • Over three months late: penalty of £200 is automatically imposed
  • Over one year late: penalty up to the amount of SDLT due may be imposed
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13
Q

Six or more residential properties

A
  • If six or more residential properties are purchased in a single transaction the purchaser can choose to apply the non-residential property rates
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