Section 7 - Stamp Duties

Question 1

Stamp Duty Land Tax

Answer 1

Tax on land considerations

Paid by purchaser, not the seller, within 14 days of effective date of transaction

Paid under self-assessment procedures

Solicitor normally completes the forms

Question 2

Stamp Duty Land Tax (England and N. Ireland) - Rates

Answer 2

Residential land/property: £0 - £125,000
Non-Residential land/property: £0 - £150,000
Rate: 0%

Residential land/property: £125,000 - £250,000
Non-Residential land/property: £150,000 - £250,000
Rate: 2%

Residential land/property: £250,000 - £925,000
Non-Residential land/property: >£250,000
Rate: 5%

Residential land/property: £925,000 - £1,500,000
Rate: 10%

Residential land/property: >£1,500,000
Rate: 12%

Question 3

Stamp Duty Land Tax (England and N. Ireland)

Answer 3

First-time buyers:
- No SDLT is payable on first £300,000 of property’s purchase price, provided the total purchase price is less than £500,000
- No relief is available where the property’s purchase price exceeds £500,000.

This relief now includes qualifying shared ownership property purchases. The first £300,000 of the initial share bought is not liable to SDLT, the remainder is charged at 5% of the excess. No relief on further shares bought, nor where the purchase price is over £500,000. There is no liability to SDLT on the lease.

SDLT is paid at the rate of tax on the part of the purchase price within each tax band.

15% applies to the whole purchase price for corporate bodies buying residential properties costing over £500,000.

If homes are exchanged without cash payment, SDMT paid on market value.

SDLT is not paid on any part of the purchase price that is for carpets, furniture etc/however can’t put high value on these to avoid paying as HMRC would challenge

2% surcharge non-UK resident on residential property £40,000+

3% (4% in Scotland and Wales) surcharge for additional residential properties in excess of £40,000
- Doesn’t apply if main residence being replaced. Although charge made if former main residence isn’t sold at same time - refund can be claimed if sell within 36 months (18 months in Scotland)
- If main residence not replaced, charge determined by number of properties owned at end of day of transaction (if 2 or more there will be a charge)

Question 4

Land and Buildings Transaction Tax (LBTT)

Answer 4

Replaced SDLT in Scotland

LBTT is only paid at the rate of tax on the part of the purchase price within each band

For both residential and non-residential properties

0% on first £145,000, rising in steps thereafter up to 12%

First time buyers pay 0% on first £175,000

Administered by Revenue Scotland

Question 5

Land Transactions Tax (LTT)

Answer 5

Replaced SDLT in Wales

0% on first £180,000, rising in steps thereafter up to 12%

Question 6

Stamp Duty and Stamp Duty Reserve Tax

Answer 6

Payable on documents that transfer ownership of shares, stocks and unit trusts

Stock transferred electronically through a stockbroker pay stamp duty reserve tax

Rate is 0.5% of consideration paid

Stamp duty is rounded to the nearest £5

SDRT is rounded to the nearest penny

Stamp duty transactions of less than £1,000 are exempt

Payable by the purchaser

Abolished on share transactions for companies listed on growth markets such as AIM

Stamp duty and SDRT are incidental costs and are deducted from CGT gains