Stamp Duty Land Tax

Question 1

What are the typical purchasers costs deducted from the gross market value?

Answer 1

• Stamp Duty Land Tax: at prevailing rate
• Agent’s fees: 1% of purchase price (+ VAT)
• Legal fees: 0.5% of purchase price (+ VAT)

Question 2

What is the rate of stamp duty for the transfer of non-residential and mixed-use property?

Answer 2

Up to £150,000: Zero
£150,001 - £250,000: 2%
+ £250,000: 5%

Question 3

What is ATED? What does it aim to stop?

Answer 3

Annual Tax on Enveloped Dwellings (ATED)
Aims to stop on-shore and offshore individuals using companies to avoid SDLT for residential property. Current threshold is £500,000

Question 4

How is SDLT calculated on the granting of new leases and premiums payable?

Answer 4

Calculated on the Net Present Value (NPV) of the leases (using RPI as a discount rate). For commercial property the rate paid on the NPV is:

Up to £150,000: Zero
£150,001 - £5,000,000: 1%
+ £5,000,000: 2%

Calculator available on the HMRC website

Question 5

How are break clauses accounted for in SDLT calculations for the transfer or leasehold properties?

Answer 5

They are excluded from the calculations