10. Taxation of property transactions through SDLT, LTT, VAT and CGT

Question 1

When does SDLT/LTT apply?

Answer 1

Applicable to both residential and non-residential/commercial property.

Note: if VAT is payable on non-resi/commercial property, then SDLT/LTT is also chargeable on the VAT element of the transaction.

Question 1

When does CGT apply?

Answer 1

Disposal of main residence is usually exempt under prinicpal private residence relief.

For those that do not fall within this exception, CGT (resi)/Corporation (companies) will apply.

Paid by the seller.

Question 2

When does VAT apply?

Answer 2

Does not usually apply to residential property.

May apply to non-resi/commercial property if its up to three years old, or the owner has opted to tax.

Buyer pays and it is also made chargeable on rent paid by tenants if an opt to tax has been made.

Question 3

What is SDLT?

Answer 3

A tax on land transactions over a certain threshold. Such as:
- Purchase of freehold property.
- Grant of a new lease.
- Assignment of an existing leases.

Question 3

Who pays SDLT?

Answer 3

The buyer/tenant.

Question 4

What is LTT?

Answer 4

Introduced in 01 April 2018.

Welsh version of SDLT.