Further Returns

The Finance Act 2003 provides for a further return' to be lodged with the Stamp Office in certain circumstances. When sending this return please head it FURTHER RETURN' and state the relevant legislation for example, FA03/S80.

Please note the following guidance is not relevant if you have already applied for deferment. In these circumstances you should write to the deferment team.

The form of this further return depends on the type of transaction involved:

SDLTM(tbc) - Adjustment where contingency ceases or consideration ascertained - FA03/S80 (amplification of existing SDLTM50300 and covering special cases)

1) Original transaction notified on SDLT1 with no tax due.

  • Original return notified but consideration estimated at a sum below the threshold.
  • Consideration now ascertained and actual sum is higher than estimate.
  • Further return required - this takes the form of a letter to Birmingham Stamp Office, it should contain:
    • UTRN of the original return
    • details of actual consideration
    • self assessment of tax now due (if applicable)
    • payment of any tax within 30 days of consideration becoming ascertained

2) Original transaction notified and tax paid.

  • Original return notified with consideration estimated and Stamp Duty Land Tax paid
  • Consideration now ascertained
  • Further return required - this takes the form of a letter to Birmingham Stamp Office, it should contain:
    • UTRN of the original return
    • details of actual consideration
    • self assessment of tax now due
    • payment of additional tax within 30 days of consideration becoming ascertained if estimate too low
    • claim for refund of tax if estimate too high

3) Original transaction not notified as the estimated consideration was below the notification threshold.

  • If the actual consideration is still below the current notification threshold, no action need be taken.
  • If the actual consideration is over the threshold you should complete an SDLT1, giving all relevant details of the transaction and send it to Birmingham Stamp Office. The consideration is the actual consideration and the effective date is the date of the original transaction.

The return notifying the actual consideration must be made within thirty days of it becoming known or penalties may be payable. In addition, in case three above, a penalty will be payable, calculated from the effective date of the original transaction.

Interest will be charged on tax payable due to an under estimate from thirty days after the original effective date. Interest will be added to tax repayable because of an over estimate from the date of receipt by HMRC.

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SDLTM(tbc) - Relief withdrawn - FA03/S81

Where relief was claimed in respect of Schedule 6A (certain acquisitions of residential property), parts 1 or 2 Schedule 7 (group relief/reconstruction relief) or Schedule 8 (charities relief) and a disqualifying event occurs, a further return in the form of a letter to Birmingham Stamp Office must be made within 30 days of that event.

The letter must contain the UTRN of the original notification and a self assessment as to tax now due, a cheque for this amount should be sent with the letter. The effective date of this further return for notification, penalty and interest purposes is the date of the disqualifying event.

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SDLTM(tbc) - Later linked transaction - Section 81A Finance Act

1) Original transaction notified on SDLT1 but no tax was due.

  • Original return notified but consideration below the threshold.
  • Later linked transaction takes place resulting in the need to revisit the original return and tax now due.
  • SDLT1 required for subsequent transaction.
  • Further return required in respect of original return- this takes the form of a letter to Birmingham Stamp Office, it should contain:
    • UTRN of the original return
    • details of consideration on second transaction
    • self assessment of tax now due (if applicable)
    • payment of tax within 30 days of later linked transaction

2) Original transaction notified and tax paid.

  • Original return notified and tax paid at rate applicable.
  • Later linked transaction takes place resulting in the need to revisit the original return and additional tax now due.
  • SDLT1 required for subsequent transaction.
  • Further return required in respect of original return- this takes the form of a letter to Birmingham Stamp Office, it should contain:
    • UTRN of the original return
    • details of consideration on second transaction
    • self assessment of any additional tax now due
    • payment of tax within 30 days of later linked transaction

3) Original transaction was not notifiable

  • Original return not notified as below notification threshold.
  • Later linked transaction takes place resulting in the need to revisit original, notification may now be required and additional tax may be due (if notification still not required no further action need be taken in respect of the transactions).
  • If notification is required - SDLT1 should be lodged for subsequent transaction, in the normal way and Stamp Duty Land Tax 1 is now required for original transaction, this should be sent to Birmingham Stamp Office, accompanied by a letter containing the following details:
    • UTRN of the subsequent return
    • details of consideration on second transaction
    • self assessment of any additional tax now due
    • payment of tax (within 30 days of later linked transaction)
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SDLTM(tbc) - Leases that continue after a fixed term - FA03/Sch17A/Para3

The grant of a lease for a fixed term is notifiable (if required) as a lease for that term. If it continues after the fixed term, either as provided for in the lease or by operation of law, it is treated as a lease for a fixed period of one year longer than the original and if it continues after that year, two years longer etc.

When the lease continues after the end of a fixed term a further return, in the form of a letter to Birmingham Stamp Office, should be made within 30 days of the end of the term already notified or an SDLT1 when the lease first becomes notifiable.

1) Original transaction notified on SDLT1 but no tax due.

  • Lease continues after end of fixed term.
  • Further return required having recalculated tax due based on a lease one year longer than the original.
  • Letter should contain:
    • UTRN of the original return
    • details of new tax calculation
    • self assessment of tax now due
    • payment of tax within 30 days of end of term already notified

2) Original transaction notified and tax paid.

  • Lease continues after end of fixed term.
  • Further return required having recalculated tax due based on a lease one year longer than the original.
  • Letter should contain:
    • UTRN of the original return
    • details of new tax calculation
    • self assessment of tax now due
    • payment of additional tax (that is, new tax calculation less tax paid on original notification) within 30 days of end of term already notified

3) Original transaction was not notifiable

  • Original return not notified as below notification threshold.
  • Lease continues after end of fixed term.
  • As a result of the continuation lease becomes notifiable.
  • SDLT1 now required, effective date is the date of the original transaction (penalties will not be charged if return is made within 30 days of continuation which results in the requirement to notify), this should be sent to Birmingham Stamp Office, not Netherton RDC, accompanied by a letter containing the following details:
    • Details of tax calculation
    • Self assessment of tax now due
    • Payment of any tax now due within 30 days of end of the term that did not previously need to be notified
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SDLTM(tbc) - Lease for indefinite term - FA03/Sch17A/Para4

The grant of a lease for an indefinite term is taxed as a lease for a fixed term of one year. If it continues after the end of that first year, it is taxed as a lease for a fixed term of two years and so on.

1) Original transaction notified on SDLT1 but no tax due.

  • Lease continues after end of first year.
  • Further return required having recalculated tax due based on a lease for two years (and on subsequent anniversaries, for the appropriate term).
  • The return is made by way of a letter to Birmingham Stamp Office and should contain:
    • UTRN of the original return
    • details of new tax calculation
    • self assessment of tax now due
    • payment of any tax within 30 days of end of term already notified

2) Original transaction notified and tax paid.

  • Original return notified and tax paid.
  • Lease continues after term notified.
  • Further return required having recalculated tax due based on a lease for one year longer than already notified.
  • The return is made by way of a letter to Birmingham Stamp Office and should contain:
    • UTRN of the original return
    • details of new tax calculation
    • self assessment of additional tax now due
    • payment of tax within 30 days of end of term already notified

3) Original transaction was not notifiable

  • Original return not notified as below notification threshold.
  • Lease continues after end of first year.
  • As a result of the continuation the lease now becomes notifiable.
  • SDLT1 now required, effective date is the date of the original grant (penalties will not be charged if return is made within 30 days of continuation which leads to the requirement to notify), this should be sent to Birmingham Stamp Office, accompanied by a letter containing the following:
    • details of new tax calculation
    • self assessment of tax now due
    • payment of any tax within 30 days of end of the term that did not previously need to be notified
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SDLTM(tbc) - Uncertain rent becomes certain - FA03/Sch17A/Para8

1) Original transaction notified on SDLT1 but no tax was due.

  • Original return notified but rent estimated at a sum giving rise to an NPV below the threshold.
  • Rent now ascertained and actual sum is higher than estimate.
  • Further return required - this takes the form of a letter to Birmingham Stamp Office, it should contain:
    • UTRN of the original return
    • details of actual rents
    • self assessment of tax
    • payment of any tax due

Interest is payable on tax remaining unpaid more than thirty days after the date the rent is known.

2) Original transaction notified and tax paid.

  • Original return notified with rent estimated and Stamp Duty Land Tax paid.
  • Rent now ascertained.
  • Further return required - this takes the form of a letter to Birmingham Stamp Office, it should contain:
    • UTRN of the original return
    • details of actual rent
    • self assessment of tax
    • payment of any additional tax within if estimate too low
    • claim for refund of tax if estimate too high

Interest is payable on tax remaining unpaid more than thirty days after the date the rent is known. Any repayment of tax is made with interest from the date the original payment was received by HMRC.

3) Original transaction was not notifiable as the estimated rent was below the notification threshold.

  • If the actual NPV is still below the current notification threshold no action need be taken.
  • If actual NPV is over the threshold you should complete an SDLT1, giving all relevant details of the transaction and sent to Birmingham Stamp Office. The rents should be the actual rents and the effective date is the date of the original transaction (penalties will not be charged if return is made within 30 days of actual rent becoming known)
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SDLTM(tbc) - Completion following Substantial Performance of agreement for sale

When an agreement for the sale of a freehold interest, or the assignment of an existing lease, is substantially performed, a further return may be due on actual completion.

A further return will be required where there have been changes between substantial performance and actual completion resulting in a different amount of tax now due.

This further return should be a letter to Birmingham Stamp Office and should contain the following details:

  • UTRN of original return (if applicable)
  • details of the new calculation
  • if additional tax is due, an appropriate payment
  • if a refund is due, claim for the amount overpaid

Interest is payable on tax remaining unpaid more than thirty days after completion. Any repayment of tax is made with interest from the date the original payment was received by HMRC.

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SDLTM(tbc) - Completion following Substantial Performance of agreement for lease

If an agreement for the grant of a new lease was substantially performed (notional transaction), a further return will be due on actual completion. In these circumstances the grant is treated as a completely separate transaction (although linked to the notional transaction), overlap relief will be available. As a result, the further return will be a new SDLT1 sent to Netherton RDC and not a letter. However, if the NPV is nil because of the overlap relief, no notification is required and no action need be taken. Please note that application of overlap relief cannot lead to a negative figure, so no refund will be available if the tax calculation on the grant of the lease is less than that paid on substantial performance.

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SDLTM(tbc) - Zero carbon homes relief

Zero carbon homes relief is a relief from Stamp Duty Land Tax for new homes that meet a specified standard of energy efficiency.

The relief was announced at Budget 2007 and was introduced from 1 October 2007. The relief initially only applied to houses but was extended to cover all eligible flats bought from 1 October 2007 in August 2008.

Since 1 October 2007 all zero-carbon homes (including flats) under £500,000 are exempt from Stamp Duty Land Tax. Zero-carbon homes over £500,000 have their Stamp Duty Land Tax bill reduced by £15,000.

The legislation is at FA03/S58A and 58B. The definition of what a zero-carbon home is and how a home can be assessed for the relief can be found in The Stamp Duty Land Tax (Zero-Carbon Homes Relief) Regulations 2007 (PDF 60K) which were laid in Parliament on 18 October 2007 and came into force on 7 December 2007. The legislation dealing with flats can be found in The Stamp Duty Land Tax (Zero-Carbon Homes Relief) (Amendment) Regulations 2008 which were laid in Parliament on 22 July 2008 and came into effect on 13 August 2008.