7. Stamp Duty Land Tax Flashcards
What is the amount of SDLT due based on?
The consideration exchanged for the property
What are the implications of first-time buyer’s relief, and who qualifies?
Provided buyer intends to occupy the property as their main residence, amount due:
- 0% on the first £425,000
- 5% on the remainder up to £625,000
Only available if buyer or both joint buyers have never purchased a freehold/leasehold anywhere in the world.
When must a SDLT return be sent to HMRC even if there is no tax to be paid?
Within 14 days of completion
- unless sale price is less than £40,000
What is the value of the transaction where land/buildings are given to a company in exchange for shares?
The market value of the land/buildings
What are the penalties imposed if SDLT return is filed (1) up to three months late, (2) over three months late, and (3) over one year late, regardless of whether SDLT is actually owed?
Up to three months: £100
Over three months: £200
Over one year: Up to 100% of the SDLT due
What do the SDLT thresholds and rates depend on?
Whether the property is residential, non-residential, or mixed
How is SDLT considered a tiered tax?
Because the applicable rate applies to the amount of consideration within the threshold, before applying higher rates to excess amounts
In what situations are the increased rates either not charged, or charged but refunded?
Where the new property replaces the purchaser’s only or main residence
How is SDLT payable on the grant of a new lease calculated?
Based on either or both of:
- Lease premium paid up front (usual rate), or
- Net present value of the rent payable (lower rate)
What is the upper limit for first-time home buyers to qualify for SDLT relief?
£425,000
When is a buyer exempt from paying and filing an SDLT return?
- gift of land/left in a will
- transferred due to divorce.
- Freehold property is bought for** less than £40,000**
What are the SDLT threshold?
1)£250,000 for residential properties;
2) £425,000 for first-time buyers buying a residential property worth £625,000 or less;
3) £150,000 for non-residential land and properties
Where there are multiple linked transactions, what is the relevant consideration, and what is the downside of this?
The total of the chargeable considerations for each transaction.
This may result in more SDLT being payable than if it was charged against each individually.
What is the key point to note where a buyer is purchasing a second residential property?
An additional 3% will be due on whatever SDLT threshold applies to property, provided the residential property they currently own is worth more than £40,000.
- same rate also applies to company buyers of residential premises.
What are the commercial SDLT rate for freehold sales?
Up to £150,000 - Zero
Next £100,000 (the portion from £150,001 to £250,000) - 2%
Remaining amount (the portion above £250,000) - 5%
