Summary of Budget measures affecting Stamp Taxes

SDLT notification threshold – simplification

Budget Note 057 (PDF 70K) and legislation (PDF 96K) available on the HM Revenue & Customs (HMRC) website:

from Budget day, the current threshold for notification of non-leasehold transactions will be raised from a chargeable consideration of £1,000 to £40,000
transactions involving leases for a term of seven years or more will only have to be notified where any chargeable consideration other than rent is £40,000 or more or where the annual rent is £1,000 or more.
it will no longer be necessary to complete either a Stamp Duty Land Tax return (SDLT 1) or certificate that no SDLT is due if the transaction is below the notifiable threshold
the special rules that apply for SDLT on lease premium, where rent exceeds £600 annually will be changed – and will now apply where annual rent is £1,000 or more and the lease is for non-residential property only
from Budget day, this rule will no longer apply to residential property. This will particularly benefit many shared ownership purchasers who do not wish to make a market value election.

Stamp Duty – reduction of admin burden

Budget Note 055 (PDF 52K), and information on Reduction of Stamp Duty Administrative Burden Removal of £5 Stamp Duty Charges (PDF 65K).

From 13 March 2008, instruments transferring stock or marketable securities that were previously chargeable with £5 stamp duty will be exempt. Most will not need to be presented to HMRC for stamping – and may be sent direct to the company registrar.

This measure, heralded in the Pre-Budget report, will reduce the numbers we receive by around 230,000 – and will affect current processes.

New Civil Penalty Regime for incorrect returns (PDF 65K) - extended to SDLT and SDRT from next year.

This measure extends the new civil penalty regime (enacted in 2007 for Income Tax Self Assessment (ITSA), Corporation Tax Self Assessment (CTSA), VAT and PAYE and NICs) to other HMRC taxes – except tax credits and national minimum wage. The new provisions will have effect from a date to be appointed by Treasury order – see Budget Note.

SDLT relief for zero carbon homes extended to include flats, Budget Note 056 (PDF 46K).

The relief will apply retrospectively to all new flats on first acquisition from 1 October 2007.

SDLT anti-avoidance – Property Investment Partnerships, Budget Note 058 (PDF 49K)

As announced in PBR 2007, a measure will be introduced to amend SDLT anti-avoidance provisions introduced in FA 2007, to ensure that where there is a transfer of interest in a property held within an investment partnership, there is no charge to SDLT.

The amendment will apply retrospectively from the date Royal Assent was given to FA 2007 (19 July 2007).

Disclosure of use of SDLT avoidance schemes for residential property

The government has announced that its Tax Avoidance Scheme Disclosure Regime will extend the SDLT disclosure rules to include residential property above £1 million from later this year. The draft secondary legislation allowing this will also be the subject of consultation later in the year.

From Budget day, anti-avoidance legislation to prevent abuse where financial institutions assist parties to avoid payment of SDLT.

Budget Note 060 (PDF 41K) and legislation (PDF 81K).

Anti-avoidance legislation to close a loophole that enables groups to avoid SDLT on the sale of a property.

Budget Note 059 (PDF 44K) and see addition information (PDF 75 K).

SDLT relief for authorised unit trusts converting to, or merging with, open ended Investment companies.

Budget Note 34 (PDF 63K) and see page 37 of Statutory Instruments 2008 No. Income Tax, Corporation Tax, Capital Gains Tax, The Authorised Investment Funds (Tax) (Amendment) Regulations 2008 (PDF 302K).

Regulations will be made on Budget day and come into force on 6 April 2008.
The relief will mainly benefit authorised unit trusts investing in property which wish to enter the new Property Authorised Investment Funds (PAIFs) regime, regulations fore which are also made on Budget day. Only open-ended investment companies can become PAIFs.
However, the conditions attached to the relief replicate those of existing stamp duty and Stamp Duty Reserve Tax (SDRT) reliefs, and the relief applies to property assets of any authorised unit trust which converts to, or merges with, an open-ended investment company.