BUYER - POST COMPLETION

Question 1

WHAT STAGE OF THE LSCP IS USED IN THIS STAGE OF THE TRANSACTION?

Answer 1

Stage E (completion) & Stage F (post-completion)

Question 2

WHAT ARE THE THREE STEPS FOR THE BUYER’S SOLICITOR FOLLOWING COMPLETION?

Answer 2

1. Bill and financial statement
2. Stamp Duty Land Tax (SDLT) / Land Transaction Tax (LTT)
3. Registration at the Land Registry

Question 3

WHAT IS STAMP DUTY LAND TAX?

Answer 3

SDLT is a government tax (introduced on 01 December 2003) and is payable on land transactions above a certain value

Question 4

WHAT ARE THE CURRENT RATES OF SDLT FOR FREEHOLD TRANSACTIONS?

Answer 4

VALUE BANDS RATE OF SDLT
Up to £125,000 0%
Over £125,000 - £250,000 2%
Over £250,000 - £925,000 5%
Over £925,000 - £1.5 million 10%
Over £1.5 million 12%

Question 5

FOR TRANSFERS OF FREEHOLDS, WHAT MUST THE BUYER’S SOLICITOR DELIVER TO THE HMRC?

Answer 5

A Land Transaction Return (LTR) together with any duty payable

Question 6

WHEN MUST THE LAND TRANSACTION RETURN BE SENT TO HMRC?

Answer 6

Within 14 days of completion

Question 7

WHAT ARE THE THREE PENALTIES FOR LATE FILING AND PAYMENTS?

Answer 7

a. Interest is payable on the unpaid amount of tax from 14 days after completion and is charged from the day after tax should have been paid until the date it is paid.

b. There is a flat penalty rate of £100 if the LTR is up to 3 months late and £200 in any other case.

c. If the LTR is filed more than 12 months late, there is a tax-based penalty in addition to the fixed penalty.

Question 8

WHEN DOES FIRST TIME BUYER RELIEF APPLY?

Answer 8

Where buyers are purchasing their first home and the purchase price is £500,000 or less.

No SDLT is payable on the purchase price up to £300,000 and 5% is payable on any portion from £300,001 to £500,000

Question 9

HOW IS FIRST TIME BUYER RELIEF CLAIMED?

Answer 9

• The purchase must be completed on or after 22 November 2017
• The purchase price must be £500,000 or less
• The purchaser(s) must be first-time buyers
• The first-time buyer(s) must be purchasing a single dwelling and intend to occupy that dwelling as their only or main residence.

Question 10

WHAT ARE THE HIGHER RATES OF SDLT PAYABLE ON ADDITIONAL PROPERTIES?

Answer 10

VALUE BANDS RATE OF SDLT
Up to £125,000 5%
Over £125,000 - £250,000 5%
Over £250,000 - £925,000 8%
Over £925,000 - £1.5 million 13%
Over £1.5 million 15%

Question 11

WHEN WILL ADDITIONAL SDLT NOT BE PAYABLE?

Answer 11

Where the buyer is replacing their main residence and the buyer’s previous main residence has already been sold

Question 12

WHEN WILL ADDITIONAL SDLT BE REFUNDED?

Answer 12

If the previous main residence is sold within 36 months, the buyer can get a refund of the higher rate SDLT paid

Question 13

HOW MUCH ADDITIONAL SDLT IS PAYABLE FOR NON-UK RESIDENTS?

Answer 13

An additional 2% SDLT is payable by all non-UK residents buying residential property in England and Northern Ireland

Question 14

WHAT IS LAND TRANSACTION TAX?

Answer 14

LTT replaced SDLT in relation to property purchased in Wales and the LTT regime affects the advice and financial calculations as well as the actual payment of tax

Question 15

WHAT ARE THE CURRENT RATES OF LTT PAYABLE?

Answer 15

VALUE BANDS RATE OF LTT
Up to £180,000 0%
Over £180,000 - £250,000 3.5%
Over £250,000 - £400,000 5%
Over £400,000 - £750,000 7.5%
Over £750,000 - £1.5 million 10%
Over £1.5 million 12%

Question 16

HOW DOES THE TAX WORK WHEN A PROPERTY IS PARTLY SITUATED IN ENGLAND AND PARTLY IN WALES?

Answer 16

SDLT will be payable on the part of the property situated in England and LTT will be payable on the part of the property situated in Wales

Question 17

IS THERE RELIEF FOR FIRST TIME BUYERS UNDER THE LTT REGIME?

Answer 17

No

Question 18

WHAT ARE THE HIGHER RATES OF SDLT PAYABLE ON ADDITIONAL PROPERTIES

Answer 18

Buyers of additional properties are subject to higher rates of LTT of 3% higher on each band

Question 19

WHAT IS THE FIRST REAON WHY IT IS VITAL THAT THE BUYER’S SOLICITOR MUST APPLY TO THE LAND REGISTRY TO REGISTER THE CHANGE OF OWNERSHIP?

Answer 19

The LRA 2002 provides that certain dispositions of registered land must be completed by registration to take effect.

The legal ownership of the estate will only pass to the buyer once they are registered as the registered proprietors

Question 20

WHAT IS THE SECOND REAON WHY IT IS VITAL THAT THE BUYER’S SOLICITOR MUST APPLY TO THE LAND REGISTRY TO REGISTER THE CHANGE OF OWNERSHIP?

Answer 20

The registration application must be completed within the priority period of the Land Registry pre-completion search as failure to do so means that third parties might register entries on the title

Question 21

WHAT DOCUMENTS MUST BE SENT TO THE LAND REGISTRY WITH FORM AP1?

Answer 21

• Form DS1 or appropriate reference to discharge by electronic means
• Certified copy of the transfer to the buyer
• Certified copy of the buyer’s new mortgage deed
• The correct Land Registry fee
• LTR certificate (SDLT5)
• Evidence of identity, where necessary
• Form DI where there are disclosable overriding interests

Question 22

WHAT ADDITIONAL DOCUMENTS MAY BE SENT TO THE LAND REGISTRY WITH FORM AP1?

Answer 22

• A certified copy of the grant of probate where the sale is by executors
• A certified copy of the marriage certificate to evidence a change of name
• Form JO, where this has been used to declare trust information

Question 23

HOW CAN FORM AP1 BE SENT TO THE LAND REGISTRY?

Answer 23

Using hard copies or lodged electronically via the Land Registry’s electronic document registration service (e-DRS)

Question 24

WHAT DOCUMENT DOES THE LAND REGISTRY ISSUE ON COMPLETION OF REGISTRATION?

Answer 24

Title Information Document

Question 25

WHAT INFORMATION DOES THE TITLE INFORMATION DOCUMENT PROVIDE?

Answer 25

• State that an official register copy is attached
• Provide information on how to obtain official copies in the future
• Stress the importance of keeping the address of the proprietor up to date
• Give the details of the relevant Land Registry office responsible for the title
• Stress that the document is for information purposes only

Question 26

WHAT DOES THE LSCP STATE ABOUT THE TITLE INFORMATION DOCUMENT?

Answer 26

That the buyer’s solicitor must provide the client with a copy of the TID

Question 27

WHEN DOES THE LAND REGISTRY EARY COMPLETION POLICY APPLY?

Answer 27

Where there is an application to the Land Registry to remove entries relating to a registered charge from the register but where no evidence of discharge has been supplied

Question 28

HOW DOES THE LAND REGISTRY EARY COMPLETION POLICY WORK?

Answer 28

The Land Registry will complete the registration of the new owner and the new mortgage, leaving the old mortgage on the register.

This will necessitate a further application to discharge the seller’s old mortgage once discharge evidence is available.

Question 29

WHERE WILL TITLE DOCUMENTATION BE KEPT?

Answer 29

• If there is a new mortgage, the title documentation must be sent to the lender
• If there is no mortgage, the clients’ instructions should be sought

Question 30

WHAT IS PROPERTY ALERT?

Answer 30

A free monitoring service aimed at preventing fraud.

Once the registered property owner has signed up to the service, they will receive an email alert from the Land Registry when certain activity occurs with the property, enabling them to act if the activity seems suspicious