Stamp Duty Land Tax (SDLT) is generally payable on the purchase or transfer of property or land in the UK where the amount paid is above a certain threshold. In addition most UK land and property transactions must be notified to HM Revenue & Customs (HMRC) on a Stamp Duty Land Tax return within a certain time limit - even if no tax is due.
Various rules apply for working out how much, if any, SDLT is payable. The calculation - which is based on a value called the 'chargeable consideration' - can vary depending on whether the land is residential or non-residential, freehold or leasehold, or on other factors such as whether several transactions are linked.
There are also some types of transactions that are exempt from SDLT, or where reliefs can reduce the amount payable.
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Broadly speaking, SDLT is charged as a percentage of the amount paid for property or land when it is bought or transferred - unless there is a relief or exemption.
Higher percentage SDLT rates apply to higher-value transactions. The amount payable can also vary depending whether the property is being used for residential or non-residential purposes, and whether the property is sold as a freehold or leasehold.
To find out about SDLT for more complicated transactions read the section below, ‘What value is SDLT charged on?'
Some transactions are entitled to SDLT relief. In these situations you can claim the relief when you complete the SDLT return.
SDLT relief is also available for properties meeting certain strict criteria.
There are some land and property transactions that don't need to be notified to HMRC because they are exempt from SDLT.
SDLT is charged on the total amount of what's known as 'the chargeable consideration'. The chargeable consideration includes everything of economic value given in exchange for the property - so as well as a payment of money, it can include a release from a debt, the transfer of an existing mortgage, or the provision of other services.
For a straightforward residential property purchase, calculating SDLT is usually easy. The chargeable consideration is simply the purchase price (excluding the value of any extras such as carpets or furniture which are not counted as fixtures and fittings) so you apply the relevant SDLT threshold and rate to the purchase price.
Calculating SDLT for other types of transaction or for new leases can be a bit more complicated. In these cases HMRC provides online calculators to help you.
Follow the link below to find out how to calculate SDLT in the following situations:
Unless a transaction is exempt from SDLT, the purchaser is responsible for notifying HMRC of the purchase or transfer by completing a Land Transaction Return - commonly referred to as the SDLT Return - and for making sure that SDLT is paid on time. In practice, most people employ a solicitor or conveyancer to complete the return for them.
When HMRC receives a valid return, it will issue a Stamp Duty Land Tax Certificate. The transfer of the property cannot be registered at the land registry without this certificate.
All transactions valued at £40,000 or more, must be notified to HMRC within 30 days of the 'effective date' of the transaction (for most land and property purchases this is the completion date). If the transaction value is above the payment threshold, you also need to send payment within this time limit.
If the return and payment aren't received within 30 days, the purchaser will incur a penalty charge and will also be charged interest on the overdue payment.
The quickest and easiest way to file a return is online (most SDLT returns are now submitted this way). There are many benefits to using this method. For example, unlike the paper return, you will be presented only with the questions relevant to your situation. You will also receive an automatically generated Land Transaction Certificate that you can send straight off to the Land Registry
Online filing helps make sure that you complete the return and pay the correct tax on time.