Tax Flashcards
What is the rule on owning more than one property in terms of SDLT
Additional 3% is added to each residential tax band
Advise to arrange transaction so that you’re paying SDLT on the cheaper property
Can claim relief if still own old property at time of purchase
Don’t apply if replaces main residence, or under £40k
Extra 2% for non-uk buyers
Rates of SDLT
Up to £250,000: 0%
The next £675,000 (the portion from £250,001 to £925,000): 5%
The next £575,000 (the portion from £925,001 to £1.5 million): 10%
The remaining amount (the portion above £1.5 million): 12%
How to pay capital gains tax
Submit residential property return, submit to HMRC and pay any CGT within 60 days
How do you qualify for private residence CGT relief?
1) Only home or main home during the whole period of ownership
2) No part was rented out
3) No part of property was used for business purposes during period of ownership
4) Grounds or garden no greater than 0.5 hectares
5) Did not buy it to make a gain
VAT on property
1) Sale of “new” commercial buildings (less than 3 years old) = 20% VAT
2) Resi - zero rated
3) 3 years or older, seller with option to tax
Key deductions - SDLT
Doesn’t apply to chattels, therefore separate out from purchase price
SDLT - first time buyer exemption
New CGT rules - after 20 October 2024 (but shouldn’t need this)
Lower rate - 18% (from 10%)
Higher rate - 24% (from 20%)
Income tax dividend allowance
£1000 to £500
Annual exemption CGT
£3000
SDLT on leasehold
Lease premium and net present value of total rent payable over the term of the lease
First time buyer SDLT relief
No relief if over £625,000
- 0% on £425,000
- 5% above up to £625,000
Must be resi, have intention to occupy, can own other non-resi before
NRB - SDLT - resi v non resi
£250,000 v £150,000
Look at linked transaction for SDLT
How to calculate CGT and reliefs - property
Proceeds of sale - cost of acquisition
Can deduct acquisition costs, and costs associated with enhancing value
