The Main Charge

Q. When do I need to complete a land transaction return?

  • Broadly speaking all acquisitions of freehold or leasehold property must be notified to us on a land transaction return, whether or not SDLT is payable. The main exception is for transactions where there is no chargeable consideration.
  • The grant of a lease needs to be notified if it is for seven years or more and granted for a chargeable consideration, or if for less than seven years but for a chargeable consideration which attracts 1% or more, or would be so chargeable but for a relief.

Q. What is chargeable consideration?

  • Several types of consideration may be given as consideration of Land.
  • The consideration for a land transaction may be made up of more than one type of consideration.
  • Other than cash, chargeable considerations include:
    • Shares
    • Debt
    • Other land
    • Building works
    • Services
    • Employment
    • Contingent consideration
    • Annuity

For more information on chargeable consideration please consult the SDLT Manual.

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Q. What is the effective date of transaction?

  • Normally the date of completion, whether or not by document
  • For a contract 'substantially performed' before completion, is when it has been substantially performed (this means where any rent is paid, or substantially the whole (normally not less than 90% of consideration other than rent is paid, or when the purchaser takes possession)
  • For an option and right of pre-emption, is when the option or right is acquired.
  • For more information please consult the SDLT Manual.

Q. What is a 'major interest' in land?

  • Broadly, any freehold or leasehold estate.

Q. What is 'market value'?

  • Market value is the price which the relevant assets may be expected to fetch on a sale in the open market. For more information please consult the SDLT Manual.

Q. What's this about chattels?

  • Purchasers have always been under an obligation to ensure that where chattels (carpet, furniture, & curtains) are purchased along with land and buildings the chattels are not overpriced in the documentation.
  • In particular where they buy chattels as well as land and buildings they need to ensure that the amount entered on the form as the purchase price of the land and buildings represents a reasonable apportionment of the total price they pay.

Q. What is considered chattels?

  • Chattels are items that do not form part of the land or the building, which the seller may choose not to take with them such as carpets, curtains and furniture.
  • Chattels do not include, for example, fitted kitchens and bathrooms.
  • The price attributable to a chattel (on a just and reasonable apportionment) is not chargeable to SDLT.

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Q. What are fixtures?

  • Fixtures are regarded in law as being part of the land.
  • The price attributable to a fixture is chargeable to SDLT.

Q. Do I include the payment for fixtures & fittings with the purchase price on my SDLT 1?

  • Where a purchaser agrees to buy a property for a price that includes an amount properly attributed to 'chattels or moveables', that amount will not be chargeable to stamp duty land tax & as such should not be included in Box 10 on the SDLT 1.
  • But, 'fixtures' are regarded in law as being part of the land, thus are chargeable to stamp duty land tax and as such should be included in Box 10 on the SDLT 1.
  • For more information, including examples of fixtures and chattels, please consult the SDLT Manual.

Q. Who is the liable party?

  • The purchaser is the liable party.
  • For more information please consult the ‘Who is chargeable’ section in the SDLT Manual.

Q. What is Code of Practice 10 (COP10)?

  • COP 10 covers information and advice on HMRC policy to help taxpayers, including businesses, to understand their rights & obligations, to get their tax affairs right and to pay their tax on time. This code of practice sets out the various ways in which we aim to achieve this. It includes 'pre-transaction guidance' and 'post-transaction rulings'.
  • You can obtain a copy of Code of Practice 10 by visiting our Code of Practice page.

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Q. What is an exempt interest?

An exempt interest means:

  • Any security interest such as a mortgage
  • A licence to use or occupy land
  • In England, Wales or Northern Ireland, a tenancy at will and a franchise (a grant for the Crown, for instance, the right to hold a market of fair or the right to take tolls) or manor.

Q. What is an exempt transaction?

  • A transaction for no chargeable consideration.
  • Certain leases from Registered Social Landlords ('RSLs')
  • Certain transactions that are in connection with divorce.
  • Certain transactions varying the way property passes on death
  • For more information please consult the SDLT Manual.

Q. When does SDLT have to be paid?

  • HMRC has to receive the payment within 30 days of the 'effective date'.
  • For more information please consult the SDLT Manual.

Q. Is it possible to pay in instalments?

  • Only if consideration is contingent or uncertain. Please consult the SDLT Manual for further guidance on contingent consideration.

Q. How does the connected companies' charge work?

  • Where land is transferred into a company by a person who is connected with that company, the consideration for the transfer is taken to be the market value of the land at the date the transfer takes place.

Q. How will SDLT affect trusts?

  • There will also be a charge on anyone purchasing an interest in a trust that gives them an interest in land. For example, a beneficiary of a trust might have the right to a house when the person living in it dies. If that right is sold, the purchaser will be liable to SDLT.
  • Generally, trustees will be liable for SDLT if they buy a property in the same way as other taxpayers. But this does not apply to bare trustees or nominees. In these cases (except where the transaction is the grant of a lease) the person the nominee or bare trustee acts for will be liable to pay SDLT, and will be responsible for completing the land transaction return.
  • For more information please consult the SDLT Manual.

Q. What are the rules on goodwill?

  • Under stamp duty land tax the only question is what is the 'land' being transferred. There is no specific exemption for goodwill. 'Land' includes buildings on the land and fixtures (because these are in law part of the land). It also includes goodwill that is attached to and inseparable from the land and therefore any amount that is 'attributed' to such goodwill is within the charge to stamp duty land tax.

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Q. What are the rules for partnerships?

Q. Is a transfer of equity notifiable or chargeable when there is no cash changing hands?

  • For further information please see the ‘SDLT Manual’.

Q. Will my document be admissible in court now that it cannot be stamped?

  • The Court Service is aware of the stamp duty changes from 1st December 2003, and that documents which are no longer subject to stamp duty do not require stamping in order to be admissible as evidence. The only documents subject to stamp duty from 1 December 2003 are those relating to transactions in stock and marketable securities, and to certain partnership transactions.

Q. Is an assent of property subject to a debt liable to stamp duty land tax?

  • The acquisition of property by the beneficiary of a will, or a person entitled under intestacy, is exempt from SDLT. This includes a case where consideration is given by a beneficiary in the form of the assumption of 'secured debt', that is, debt which was secured on the property at the death of the deceased individual (for example, a mortgage not paid off on death). Where the beneficiary gives any other form of consideration, then the transaction is both notifiable and chargeable. This applies to all assents made since 1 December 2003.

Q. I am currently the joint owner of 2 properties (Property A & B) with my brother. We are planning on transferring ‘Property A’ to myself and ‘Property B’ to my brother. Is there any stamp duty land tax payable?

  • Please see ‘Land partitioned FA03/SCH4/PARA6' - SDLTM04030 in the stamp duty land tax Manual.

Q. Who is liable for making a land transaction return and paying the stamp duty land tax?

  • Please see 'Liability to tax - FA03/S85' - SDLTM00060 in the stamp duty land tax Manual.

Q. I am purchasing a piece of land and building a property on it. Is stamp duty land tax payable on the purchase price of the land?

  • Please see 'Non-cash consideration: Construction or similar works FA03/SCH4/PARA10' - SDLTM04060 in the stamp duty land tax Manual.

Q. As a tenant I pay ground rent & services reserved as rent. Should I include payment for services when calculating the stamp duty land tax due on my lease?

  • Please see ‘ Non-cash consideration: Exclusions on the grant of a lease FA03/SCH17A/PARA10’ -SDLTM04090 in the stamp duty land tax Manual.

Q. I am purchasing 2 properties from the same Vendor, are these transactions linked?

  • Please see 'Linked transactions FA03/S108' - SDLTM30100 in the stamp duty land tax Manual.