What is Stamp Duty Land Tax?
Stamp Duty Land Tax (SDLT) is generally payable on the purchase or transfer of property or land in the UK where the amount paid is above a certain threshold (£40,000 or more). In addition most UK land and property transactions must be notified to HM Revenue & Customs (HMRC) on a Stamp Duty Land Tax return within a certain time limit - even if no tax is due.
What value is SDLT charged on?
Stamp Duty Land Tax (SDLT) may be payable when property or land is bought or transferred, whether or not the transaction involves payment of money and/or non-monetary consideration (which can include goods, services or the assumption of financial liabilities). The total value on which SDLT is payable is known as the ‘chargeable consideration’. In a straightforward deal such as the cash purchase of a house, the chargeable consideration is simply the price paid for the property. Deciding what counts as the chargeable consideration can be more complicated for other transactions. For all property and land transactions an SDLT return needs to be completed. This includes transactions where no SDLT is payable because the transaction value is below the current SDLT threshold, but is £40,000 or more. SDLT does not usually apply if the property is given and received purely as a gift and there is no chargeable consideration. Stamp Duty Land Tax relief
Some transactions are entitled to SDLT relief. In these situations you can claim the relief when you complete the SDLT return. SDLT relief is also available for properties meeting certain strict criteria. For example, new houses that meet 'zero carbon' standards for energy efficiency have an SDLT threshold of £500,000. Stamp Duty Land Tax Exempt
Some land and property transactions are exempt from Stamp Duty Land Tax (SDLT) regardless of their value and therefore don’t need to be notified to HM Revenue & Customs (HMRC) on an SDLT return. These include: * Property transactions where no money or other consideration changes hands Property or land may be given away or the ownership transferred to another person for no 'chargeable consideration'. This means that no money changes hands, and there is no other exchange which has a monetary value, such as a mortgage debt. This type of property transaction is exempt from SDLT and HMRC doesn't need to be notified.
* Property left in a will
In almost all cases, when property is left to another person in a will it's exempt from SDLT and HMRC doesn't need to be notified. This includes property that has outstanding debt on it, for example a mortgage. It also applies to a transaction which changes the terms of a will (within two years of someone dying) so that a different beneficiary receives a property. Provided the new beneficiary doesn’t make any compensation payment - including the assumption of liability for a mortgage - the transaction is exempt from SDLT and HMRC doesn’t need to be notified. (A corresponding variation in the terms of the will in favour of the original beneficiary doesn’t count as a compensation payment - for example leaving them something else instead of the property. In this case there would still be no need to complete an SDLT return.) * Divorce or dissolution of a civil partnership
When a couple get divorced or separate - or end their civil partnership - and the parties agree to split their property and land between them, or the property is split under the terms of a court order, it's exempt from SDLT and HMRC doesn't need to be notified * Freehold property purchases where the value of the transaction is less than £40,000 HMRC doesn't have to be notified about freehold land and property transactions with a total value of less than £40,000. However, remember that the total value includes linked transactions. * * Leasehold property purchases where the lease is granted for seven years or more HMRC doesn't have to be notified about the grant of a residential or non-residential lease...
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