4.1 Taxation - SDLT

Question 1

How much SDLT should be paid on consideration (excluding rent) for residential properties?

Answer 1

[Purchase price/Lease premium/Transfer value] [SDLT rate] [SDLT rate > Purchase additional rental property]

x < £125,000 (zero) (3%)
£125,001 < x < £250,000 (2%) (5%)
£250,001 < x < £925,000 (5%) (8%)
£925,001 < x < £1.5m (10%) (13%)
£1.5m < x (12%) (15%)
£500,000 =< x (purchase by corporates from 20 March 2014 onwards) (15%) (15%)

First-time buyers > Exempt (first £300,000)

Question 2

How much SDLT should be paid on consideration (excluding rent) for commercial (non-residential/mixed use) properties?

Answer 2

[Purchase price/Lease premium/Transfer value] [SDLT rate]

x < £150,000 (zero)
£150,001 < x < £250,000 (2%)
£250,001 < x (5%)

[Net present value (lease)]

x < £150,000 (zero)
£150,001 < x < £5m (1%)
£500,000,001 < x (2%)

Question 3

When must SDLT returns be made?

Answer 3

SDLT returns

• Transfer freehold/Lease assignment > Consideration
• Relief claimed
• Lease >= 7 years > Charge
• Other transaction > Charge

NO SDLT returns

• Freehold transaction < £40,000
• Lease purchase > 7 years (x < £40,000)
• Lease purchase < 7 years (x < SDLT threshold)

Question 4

What is the procedure for SDLT returns?

Answer 4

Form

• SDLT2 (+2 sellers/buyers)
• SDLT3 (further space needed)
• SDLT4 (complex commercial deals/leases)
• SDLT5 (Land Transaction Return Certificate > Evidence SDLT payment)

Send to HMRC > Within 14 days of completion
- Otherwise > Penalties/Fine/Interest