Stamp Duty Land Tax
Stamp Duty Land Text exemption
Between 3 September 2008 and 31 December 2009 the Stamp Duty Land Tax starting threshold for residential property acquisitions was £175,000. The threshold reverted to £125,000 for transactions with an effective date of 1 January 2010 or later.
Changes including abolition of the SDLT60
Budget 2008 introduced a number of changes with the aim of reducing the administrative burden relating to Stamp Duty Land Tax (SDLT). The notification threshold has been simplified and the SDLT60 self certificate has, in effect, been abolished.
When is SDLT evidence required?
No SDLT evidence is required for the following situations where the transaction was completed on or after 12 March 2008:
- An acquisition (other than the grant, assignment or surrender of a lease) where the chargeable consideration for that acquisition (together with any linked transaction) is less than £40,000. This includes, for example, transfers of freehold land, deeds of gift and deeds of grant of easements. This covers the noting of interests as well as their substantive registration.
- The grant of a lease for 7 years or more where:
- the premium is less than £40,000 and
- the annual rent is less than £1,000.
- The assignment or surrender of a lease where:
- the lease was originally granted for a term of 7 years or more; and
- the consideration for the assignment or surrender, other than any rent, is less than £40,000.
- The grant, assignment or surrender of a lease for a term of less than 7 years where the chargeable consideration does not exceed the zero-rate threshold, i.e. £125,000 for residential properties and £150,000 for commercial properties.
- SDLT evidence is also not required for transactions exempted under Schedule 3 to the Finance Act 2003.
When is SDLT evidence required?
An SDLT5 (including submission receipts (electronic SDLT5) and third-party vendor certificates) is required for all other transactions, which are not non-major transactions.
The acquisition of a chargeable interest other than a major interest in land remains notifiable only where there is chargeable consideration for which SDLT is due at a rate of 1% or more.
The acquisition of an easement, for example, is an acquisition of a chargeable interest other than a major interest in land. So, if the chargeable consideration on it was at the rate of 1% or higher, the transaction would be notifiable.
SDLT evidence is not required if the consideration is between £40,000 and £125,000 for residential land and between £40,000 and £150,000 for commercial land.
Any application being stood over by Land Registry awaiting an SDLT60 will be completed regardless of when the transaction was completed, subject to other outstanding requisitions.
Land Registry is in the process of updating its internal and external guidance. Affected Practice Guides will be updated at the earliest practical opportunity.
Further details of the SDLT Budget changes can be found on the HM Revenue & Customs website.
Revised Stamp Duty Land Tax arrangements for transactions affecting 100 or more properties
From 1 February 2008 HM Revenue & Customs introduced a new arrangement to enable users of Stamp Taxes Online and other online packages to submit SDLT applications for transactions affecting more than 100 properties.
Land Registry staff that deal with applications of this nature have been advised of the new procedure and have been instructed to perform the necessary checks on the new 'property schedule' and the submission receipt. Crucially they will look for the presence of the reference number supplied by HM Revenue & Customs and will check that the properties listed on the schedule match those being the subject of the Land Registry application.
Further information about the new arrangements can be found on the HM Revenue & Customs website.
General advice on Stamp Duty Land Tax
Information is available from both HM Revenue & Customs and Land Registry.
Land Registry's Practice Guide 49 section 6.3 sets out in full Land Registry's requirements. In brief
- A Land Transaction Return has to be submitted to HM Revenue & Customs.
- HM Revenue & Customs will then issue a certificate that must be produced to Land Registry before the transaction can be registered (Finance Act 2003 section 79).
Some transactions are not be liable to Stamp Duty Land Tax either because they are below the threshold or because the transaction qualifies for relief. HM Revenue & Customs will still require notice of some of these transactions. Please note that Land Registry cannot help you decide whether your transaction needs a land transaction return or is exempt.
Stamp Taxes Online
Stamp Taxes Online is a fast, efficient service providing practitioners with a secure method of viewing data and sending a Land Transaction Return online. It allows greater convenience as you can file a return at any time, and in the majority of cases the tax liability is calculated for you.
The submission receipt that online customers receive when they successfully submit their returns to HM Revenue & Customs can be printed off and sent to Land Registry, along with the necessary documents, for registration.