7 - Stamp Duties Flashcards
How is stamp duty land tax paid for, who is liable and responsible to pay it and who usually makes the payment on behalf of the liable person?
Paid via self-assessment
Buyer is liable and responsible
Solicitor often completes the stamp duty land tax payment
For the purposes of stamp duty land tax, what is meant by the term ‘effective date’ and when will this date be for a particular property transaction?
The effective date is the date that sets the time limit on paying SDLT.
The purchaser has to pay SDLT within 14 days of the effective date.
The effective date is usually completion. However, if the purchaser has paid for or taken possession of the property before completion, the date of payment or possession is the effective date.
What is the stamp duty land tax treatment for the transfer of property during divorce of legal separation?
No liability, as long as the property is exchanging between spouse/ex-spouse
What is the stamp duty land tax charge on residential leasehold property?
1% on the present value of rent over the term of a lease when this value exceeds £250,000. SDLT is paid only on the excess over the threshold and is in addition to SDLT on any premium received.
How is the present value calculated when calculating stamp duty land tax for leasehold properties?
Present value = annual rent multiplied by lease term, then apply discount factor
How is stamp duty land tax calculated if the property price given includes freestanding furniture or appliances?
Value of these goods are removed from the property price before calculating SDLT. i.e., SDLT is not paid on furnishings, only the land or property
Why might HMRC challenge a valuation of freestanding furniture or appliances in a property when selling as part of the overall cost?
Because the seller may take advantage of this to avoid paying SDLT
Who is classed as a first-time buyer for stamp duty land tax purposes?
Someone who has never owned a property anywhere in the world and are intending to occupy the property as their only or main residence
Will the first-time buyer relief apply if in a joint application for purchase or mortgage, only one party to the couple if a first-time buyer?
No, they both need to be first-time buyers to get the relief
What is the stamp duty land tax surcharge and threshold for non-UK residents buying property in the UK?
2% over £40,000
Who is a non-UK resident as far as stamp duty land tax is concerned?
Not been resident in UK for at least 183 days during the 2 year window spanning the date of the property transaction
If you pay an stamp duty land tax surcharge for buying a second home, in what circumstances can it be refunded?
If you sell your other home within 36 months of the transaction, and the second home then becomes your only home
When do annexes and self-contained property become separate to the main residence for stamp duty land tax purposes?
When it’s worth at least 1/3 of the value of the home
When is stamp duty and stamp duty reserve tax charged?
The transfer of ownership on of shares, stock and unit trusts
When is stamp duty reserve tax applied and when is stamp duty applied? State the thresholds.
SDRT = electronic transactions, no threshold
SD = paper transactions over £1,000
