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All information on this page is subject to the following warnings:
Warning 1: When claiming ‘Disadvantaged Areas Relief’
it is important to check that the property / land interest being transferred
is in a qualifying area as at the ‘relevant
date’. Note that some boundaries have changed and so your
property may be within a different electoral ward as at the relevant
date. In particular care needs to be taken as some Local Authorities
have merged electoral wards. The current name of the merged ward may
match the name of a qualifying ward. Use Post
code search and Ward Search to find
the relevant information.
Warning 2: When claiming Disadvantaged Areas Relief
it is important to check that the chargeable consideration passing for
the property / land interest being acquired is within the applicable
limits as at the relevant date. More information can be found in A
Quick Guide To Disadvantaged Areas Relief.
WARNING 3: Non-residential (Commercial) Disadvantaged Area
Relief is ended for transactions with an effective date after 16 March
2005. Please see Budget News for more details on transitional provisions
where contracts were entered into before 17 March 2005.
What is Disadvantaged Areas Relief?
- Stamp Duty Land Tax (SDLT) was introduced on 1 December 2003.
It replaces the ‘old’ Stamp Duty on purchases of flats,
houses and other UK land and buildings.
For more information see ‘Disadvantaged
Areas Relief under Stamp Duty (30 November 2001 to 30 November 2003)’
- Disadvantaged Areas Relief was introduced on 30 November 2001.
It is a relief from Stamp Duty Land Tax (SDLT) provided on some residential,
and all commercial, property and land transactions situated in
Enterprise
Areas within the UK.
- Enterprise Area is the name given to 1,997 areas which qualify
for a number of tax reliefs and other measures. For more information
on help available in these areas visit the Small
Business Service (If you follow this link you will leave the HMRC
Website).
- Anyone buying a freehold residential property, costing £150,000
or less, in a qualifying area, can
claim Disadvantaged Areas Relief, resulting in a saving of up to £1500.
- Businesses willing to invest in local communities in a qualifying
area can make an unlimited SDLT saving. This is particularly valuable
for large-scale investments since SDLT is otherwise charged at
4% of the selling price for transactions worth in excess of £500,000.
How do I claim it?
- It is easy to claim the relief and, in most cases, your solicitor
or conveyancer will handle this for you. There is no need to
pay SDLT and claim it back – if the property you are buying
qualifies for relief, your solicitor or conveyancer will simply need
to complete
the relevant section of the Land Transaction Return (SDLT1).
- An SDLT1 needs to be completed for any transfer of a freehold or
assignment of a lease whether or not SDLT is payable. The only exceptions
are the exempt transactions listed on the SDLT 60 (Self-Certificate).
Please note that there are some new exemptions to be added to the
SDLT 60. Please see more information on exempt
transactions.
- The SDLT1 should be submitted within 30 days of the effective
date of the transaction. Failure to do so will result in a penalty
for late
delivery of the return being incurred.
Important
- Before making a claim customers are advised to satisfy
themselves that the relief is due and that the relevant conditions
have been met. In particular, customers should verify that the
property is situated in a qualifying area. As with all claims
the onus is on the purchaser to check whether or not the relief
is due.
- New legislation, FA
2003 Schedule 10 Part 3, gives HMRC the power to enquire into
a Land Transaction Return. These provisions permit HMRC to open an
enquiry into any aspect of a Land Transaction Return, including claims
to relief.
- Appropriate evidence should be retained to support any claim
to the relief. There is no need to create records that would otherwise
not be available. Estate agents’ specifications, site plans,
planning applications or permissions, marketing material, photographs
and print-outs of an internet postcode search may all provide
relevant information.
- The relief must be claimed
at box nine of form SDLT1 using codes 05, 06 or 07, within 30 days of the
effective date of the transaction.
- Where six or more separate dwellings are purchased as a single
transaction, none of that land counts as residential property.
(For more information on the treatment of leases see Sp1/2004
paragraphs 46 to 50)
Statutory references:
S57 Finance Act 2003
S116 Finance Act 2003
Schedule 6 Finance Act 2003
For further information about Disadvantaged Area Relief legislation,
and how it is applied to transactions at specific dates please see
A Quick Guide to Disadvantaged Area Relief.
This site contains information to help you decide whether you can
make a claim for Disadvantaged Areas Relief. But if you need any further
information please contact the Stamp Taxes Help Line on 0845 603 0135.
More information is available regarding Disadvantaged
Areas relief from 1 December 2003.
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