SDLT

What is SDLT?

Stamp duty land tax is a tax that is payable by an in individual or business in a transaction that involves land or property. A percentage of the purchase is paid to HMRC and is based on the value of the land or property as a whole. The higher the price, the more SDLT there will be to pay. Stamp Duty Land Tax can be paid on either residential and non-residential properties and generally only applied to purchases over £125,000. After this price the percentage paid can rise as far as 15% for some purchases over £2 million. There are some exceptions to these rules though.

What are the exceptions to SDLT?

There are different circumstances that can change the amount or if you have to pay any stamp duty land tax at all. In some cases, you may be exempt from Stamp Duty Land Tax. These circumstances could be:

• You are buying a residential home as a first time buyer that is priced at £125,000 or less (This has been increased to £500,000 from now until June 2021 due to COVID-19)
• The transfer of land is a gift
• The transfer of property is left as part of a will
• The transfer of land is part of divorce settlement
• The transfer of land is to a charity
• The purchase of multiple dwellings in one transaction

SDLT on second homes

Changes were made in April 2016, where anyone planning to purchase additional property including buy-to-lets and second homes, had to pay an extra 3% of the purchase price in stamp duty. This is particularly important for individuals wanting to grow a rental portfolio or those replacing their residence without disposing of the current home.

SDLT is an extremely complicated area of tax with a constantly changing legislation. It is important to ensure you are aware of any reliefs before you purchase land and property and are confident you are paying the correct amount of tax. You may also be entitled to a refund if you have overpaid but there are time limits to make a reclaim from HMRC.

Our team of experts will be able to help you work out how much Stamp Duty Land Tax you will have to owe and make sure that you are paying the correct amount.