Stage 10: Post-completion Flashcards
what are the post-completion steps?
- discharge of seller’s mortgage
- payment of tax
- registration of new charge
- HMLR applications
re: discharge of seller’s mortgage
what procedure will be followed?
- Procedure will have been agreed on the completion information form
re: discharge of seller’s mortgage
what happens once the lender receives the mortgage money?
Once the lender has received the mortgage money, they will either:
1. Complete LR form DS1 and send to the seller’s solicitor who transmits this to the buyer’s solicitor
2. Submit e-DS1 electronic discharge through the LR portal; or
3. Use the electronic discharge system (automatically removes the charge)
With options 1 and 2, Form DS1 is not sent, but the seller’s solicitor will send confirmation to the buyer’s solicitor
re: tax
where is SDLT paid?
England
re: tax
where is LTT paid?
Wales
re: tax
when will SDLT and LTT rates be higher?
Below rates are higher if the buyer is not a UK resident/owns 2nd home
re: tax
what are the consequences of failure to pay?
Fines for non-payment of SDLT/LTT and any LR application will be rejected if it is not accompanied by the correct proof of payment
re: tax
what tax is paid in a residential transaction?
o Buyer SDLT / LTT
o Seller CGT if a gain has been made & it is not their only/main residence
re: tax
what tax is paid in a commercial transaction?
o Buyer SDLT / LTT + (possibly) VAT
o Seller corporation tax
re: tax (SDLT)
what is this payable on?
SDLT is payable on the land (inc. VAT) and fixtures (not chattels). A purchaser might try to argue some fixtures are chattels to pay less SDLT.
This must be a fair reflection otherwise this is fraud
re: tax
how is this calculated?
- Calculated like other tax i.e. property £300k. First £0 - £250k @ 0%, remaining £50 at 5% = £2.5k tax payable
re: tax (SDLT)
what are the 2024/2025 rates for first time residential buyers?
First residential time buyers - intend to occupy the home as their main residence no SDLT up to £425k o & 5% from £425 - £625k
re: tax (SDLT)
what are the 2025/2026 rates for first time residential buyers?
no SDLT up to £300k & 5% on £00k - £500k
re: tax (SDLT)
what are the 2024/2025 rates for other residential buyers?
£0 - £250k 0%
£250k - £925k 5%
£925k - £1.5m 10%
£1.5m + 12%
re: tax (SDLT)
what are the 2025/2026 rates for other residential buyers?
£0 - £125k 0%
£125k - £250k 2%
£925k - £1.5m 10%
£1.5m + 12%
re: tax (SDLT)
what are the 2024/2025 rates for commercial / mixed used property buyers?
£0 - £150k 0%
£150k - £250k 2%
£250k + 5%
re: tax (SDLT)
when and how is this paid?
- SDLT payment and Form SDLT1 (i.e. the tax return form) must be sent to HMRC within 14 days of completion.
re: tax (SDLT)
what is proof of payment?
- HMRC give form SDLT5 as proof of payment