BUYER - POST COMPLETION Flashcards
WHAT STAGE OF THE LSCP IS USED IN THIS STAGE OF THE TRANSACTION?
Stage E (completion) & Stage F (post-completion)
WHAT ARE THE THREE STEPS FOR THE BUYER’S SOLICITOR FOLLOWING COMPLETION?
- Bill and financial statement
- Stamp Duty Land Tax (SDLT) / Land Transaction Tax (LTT)
- Registration at the Land Registry
WHAT IS STAMP DUTY LAND TAX?
SDLT is a government tax (introduced on 01 December 2003) and is payable on land transactions above a certain value
WHAT ARE THE CURRENT RATES OF SDLT FOR FREEHOLD TRANSACTIONS?
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%
FOR TRANSFERS OF FREEHOLDS, WHAT MUST THE BUYER’S SOLICITOR DELIVER TO THE HMRC?
A Land Transaction Return (LTR) together with any duty payable
WHEN MUST THE LAND TRANSACTION RETURN BE SENT TO HMRC?
Within 14 days of completion
WHAT ARE THE THREE PENALTIES FOR LATE FILING AND PAYMENTS?
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.
WHEN DOES FIRST TIME BUYER RELIEF APPLY?
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
HOW IS FIRST TIME BUYER RELIEF CLAIMED?
- 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.
WHAT ARE THE HIGHER RATES OF SDLT PAYABLE ON ADDITIONAL PROPERTIES?
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%
WHEN WILL ADDITIONAL SDLT NOT BE PAYABLE?
Where the buyer is replacing their main residence and the buyer’s previous main residence has already been sold
WHEN WILL ADDITIONAL SDLT BE REFUNDED?
If the previous main residence is sold within 36 months, the buyer can get a refund of the higher rate SDLT paid
HOW MUCH ADDITIONAL SDLT IS PAYABLE FOR NON-UK RESIDENTS?
An additional 2% SDLT is payable by all non-UK residents buying residential property in England and Northern Ireland
WHAT IS LAND TRANSACTION TAX?
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
WHAT ARE THE CURRENT RATES OF LTT PAYABLE?
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%
HOW DOES THE TAX WORK WHEN A PROPERTY IS PARTLY SITUATED IN ENGLAND AND PARTLY IN WALES?
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
IS THERE RELIEF FOR FIRST TIME BUYERS UNDER THE LTT REGIME?
No
WHAT ARE THE HIGHER RATES OF SDLT PAYABLE ON ADDITIONAL PROPERTIES
Buyers of additional properties are subject to higher rates of LTT of 3% higher on each band
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?
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
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?
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
WHAT DOCUMENTS MUST BE SENT TO THE LAND REGISTRY WITH FORM AP1?
- 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
WHAT ADDITIONAL DOCUMENTS MAY BE SENT TO THE LAND REGISTRY WITH FORM AP1?
- 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
HOW CAN FORM AP1 BE SENT TO THE LAND REGISTRY?
Using hard copies or lodged electronically via the Land Registry’s electronic document registration service (e-DRS)
WHAT DOCUMENT DOES THE LAND REGISTRY ISSUE ON COMPLETION OF REGISTRATION?
Title Information Document
