Chapter 12: Stamp Duty Land Tax

Question 1

When must a person who buys or leases land or buildings in the UK must send a SDLT return?

Answer 1

• Within 14 calendar days of completion.
• SDLT payment must also be made within the same 14 day period.

Question 2

What is SDLT based on?

Answer 2

The purchase price of land and/or the value of any other consideration
E.g. Work done in exchange for property

Question 3

If no SDLT is payable, must a person still submit a SDLT return?

Answer 3

Yes.

Question 4

How is the value of a property calculated if it was transferred to a company in exchange for shares?

Answer 4

The transaction is deemed to be at market rate value.

Question 5

Which transactions are exempt from SDLT?

Answer 5

• Property transfered as a gift
• Property transferred to a spouse
• Property transferred to former spouse on divorce
• Property transferred under a variation of a will

Question 6

What is the conequence of late payment of SDLT / submission of the SDLT form?

Answer 6

Fixed penalities may apply if the SDLT form is submitted late, even if no SDLT is payable

Question 7

What is the current nil rate band for residential properties?

Answer 7

The first £250,000 is taxed at a 0%

Question 8

What is the current nil rate band for non-residential properties?

Answer 8

The first £150,000 is taxed at a 0%

Question 9

What are the tax consequences if a person already owns a residential property and buys an additional residential property?

Answer 9

An extra 3% is added to each residential tax band

Question 10

When will additional charges for additional residential purchases not apply?

Answer 10

• When a transaction is below £40,000
• If the new property replaces the purchaser’s only or main residence

Question 11

Is SDLT chargeable on the grant of a new lease?

Answer 11

Yes

Question 12

How is SDLT on the grant of a new lease calculated?

Answer 12

The tax may be based on either or both of:
1. Lease premium paid
2. Total rent payable over entire term of the lease

Question 13

What is first-time relief for purchase of first residence?

Answer 13

0% on the first £425,000
5% on £425,001 - £625,000

Question 14

When will first-time home buyers’ relief not apply?

Answer 14

• When the purchase price exceeds £625,000
• If the purchase price exceeds this amount, no relief is given

Question 15

What is the position when there are several linked transactions?

Answer 15

The consideration for each transaction is taxed collectively opposed to taxing each individual transaction

Question 16

What are the two types of tax relief available for linked transactions?

Answer 16

1. Pay tax on the mean consideration (aggregate consideration ÷ by the number of dwellings) - available if more than one residential property purchased
2. Pay the non-residential propety rates if more than six residential properties are purchased in a single transaction