Property law 5 - Tax

Question 1

Do SDLT and LTT rates rely on slices or thresholds?

Answer 1

Slices - i.e. if a threshold is breached the whole sum is NOT charged at the threshold amount

Question 2

What SDLT relief is available for first-time buyers?

Answer 2

No SDLT on the first £300,000 and 5% on the next £200,000

Question 3

What additional rate of SDLT is due if the property purchased is a second residential property?

Answer 3

An additional 3% is charged on the WHOLE of the purchase price

Question 4

What are the difference in the rates of SDLT and LTT?

Answer 4

• there is no relief for first-time buyers
• LTT is increased by 4% on a second home
• the rates are different.

Question 5

What are the allowable expenditure for CGT

Answer 5

• Original cost
• Incidental costs of acquisition e.g. lawyer’s fees
• Subsequent expenditure enhancing the asset’s value (i.e. not repairs)
• Incidental costs of disposal

Question 6

When is PPR available

Answer 6

• You have one home and you have lived in it as your main home all the time you have owned it
• You have not let part of it out - although one lodger is allowed.
• You have not used it for business only
• The grounds are less than 5,000 mSq
• You did not buy it just to make a gain

Question 7

What periods of absence are disregarded for PPR

Answer 7

• the last 9 months of ownership,
• the first 12 months of ownership
• any periods not exceeding 3 years in total throughout the period of ownership
• any period where employed outside of the UK
• any period not exceeding 4 years in total during which the owner was required by the conditions of their employment to live elsewhere.

Question 8

What are the requirements of a deed?

Answer 8

• must state it’s a deed
• signed and delivered
• signature needs to be attested 1 person

Question 9

What are the residential SDLT rates?

Answer 9

Under £250k = 0
Above £250k = 5%
Above £925k = 10%
Above £1.5m = 12%

Question 10

What are the residential first time buyers SDLT rates?

Answer 10

£425k = 0