About Stamp Duty Land Tax

Contents

When SDLT applies

SDLT is a tax on transactions, not documents. When you buy a property or land, you must fill in a land transaction return (SDLT1) and send it to HMRC. Your conveyancer/solicitor will normally complete the return for you as part of handling the transaction. But legally, you are responsible for the information submitted.

Once the return has been processed and the appropriate amount of tax has been paid, a 'land transaction return certificate' (SDLT5) is issued (this replaces the old impressed stamp.) You’ll need this certificate for the Land Registries in UK and Northern Ireland, or for the Registrars of Scotland when applying for registration of title or documents.

What forms do I need to use?

The land transaction return has six pages. For most transactions - simple residential conveyances for example - less than half the boxes need to be completed. And in the vast majority of straightforward cases, completing the return and sending it to HMRC along with the appropriate payment is all you have to do.

There are other returns for occasions when more information is necessary:

  • SDLT 2 - Where there are two or more sellers and or/two buyers
  • SDLT 3 - Where land is involved and more space than that provided on the SDLT 1 is needed
  • SDLT 4 - For complex commercial transactions and leases.

You can get land transaction returns 1, 2, 3, 4 and guidance notes from the St Austell Orderline.

You can also submit these forms electronically. Details of the online services available can be found at Software and online forms.

Substitute land transaction returns from approved forms and software providers are also acceptable. Again information can be found on the Recognised List of Suppliers pages.

Each return has a unique reference number, so photocopies can't be used.

Please see further information about the available Stamp taxes forms.

Completing and signing the land transaction return

The land transaction return must be:

  • completed in black ink (to enable HMRC's scanners to read them)
  • signed by the purchaser (or purchasers, if there’s more than one)

This is a legal requirement. Any returns that are not signed will be sent back. As a purchaser or lessee you are legally responsible for the notification and payment of SDLT (and any extra tax, interest or penalties that might arise later on.) By signing the return, you confirm that you are satisfied that the information on it is correct.

Where do I send my completed Return?

Her Majesty’s Revenue & Customs
Stamp Taxes
Comben House
Farriers Way
Netherton
Merseyside
L30 4RN

By DX:
Rapid Data Capture Centre
DX: 725593
Bootle 9

The overwhelming majority of land transaction returns should be forwarded to the Rapid Data Capture Centre in Netherton (as above) for processing. However, in a small number of situations Returns should be submitted to the Birmingham Stamp Office.

Request for further information (SDLT8)

When a land transaction return SDLT 1 form has been received and the data captured, an SDLT 8 letter will be issued where items of information are missing or unclear. An SDLT 8 may also be issued when the information on the form contradicts other information contained within the form i.e. a ‘yes’ answer given but no further details are supplied.

The SDLT 8 is issued so that the practitioners or their clients can provide or correct the missing / erroneous information on the land transaction return. When an SDLT 8 is issued, the SDLT notification remains on the system, incomplete, and a land transaction return certificate, SDLT 5, will not be produced until the correct or missing information is provided. Further details are available.

Are there circumstances when no Return is required?

Yes, it is no longer necessary to complete either a Land Transaction Return (form SDLT 1) or self-certificate (form SDLT 60) if the transaction is below the new notification threshold.

Reliefs

Stamp duty land tax is not charged on residential transactions in 'designated disadvantaged areas' if the price of the property doesn’t exceed £150,000. A full list of qualifying areas is available.

There are also other reliefs available. Your conveyancer/solicitor can advise you about those. You can also get information from the Stamp Taxes Helpline.

Late Returns

If the land transaction return and/or payment isn’t sent to HMRC within 30 days of the effective date of the transaction, penalties and interest might be payable. Leaflet SD7 (PDF 146K) has the details (an HTML version is also available). A copy of the rates of interest are also available.

Making sure people pay the right amount of SDLT

HMRC makes enquiries into a selection of land transaction returns (though not all) to ensure you don’t pay too much tax - or too little. Either way, they’ll tell you if they find something wrong. Codes of Practice leaflets COP 24 (for individuals) (PDF 304K) (an HTML version is also available)and COP25 (for companies) (PDF 245K) (an HTML version is also available) explain how enquiries are handled. If you are a purchaser or lessee, it’s your responsibility to ensure that records of transactions are kept - and to keep them for six financial years from their effective dates.