As the whole nation is talking about Stamp Duty Land Tax (SDLT) we thought it would be a good idea to explore what exactly SDLT is and what our role is as property solicitors in relation to SDLT.
The world of SDLT is a complex and ever changing one and one in which we are not experts in despite our many years of experience in property law and therefore, separate expert advice should be sought to address any concerns you may have.
What exactly is SDLT?
SDLT is a self-assessment tax on land transactions to be paid by the buyer of the property which must be paid within 14 days of completion. SDLT was introduced in 2003 as a ‘replacement’ for stamp duty, which was a tax on documents used in a transaction which would be evidenced by a stamp.
The amount of tax payable is dependent on the value of the property, which in most cases will be the amount you pay for the property and on the type of property, residential or commercial, as well as a multitude of other factors.
A failure to submit the SDLT return within the specified period will lead to an automatic fine of £100 and if the tax is not paid will result in interest on the amount payable. The property that you have purchased cannot be registered into your name until the SDLT return has been submitted.
How much will I pay?
How much you will pay is dependent on the amount you are paying for your property and is calculated on a percentage value. There are also many reliefs such as the ‘first time buyer’ relief. People who have never held an interest (owned) in a property are charged at 0% up to £300,000.00. There are also circumstances in which you will be charged more. Such as if you are buying a second property and retaining your main residence.
Solicitors and conveyancers are not experts in this field and the more complex your personal situation is the more imperative it is that you seek specific advice in this matter.
To calculate your specific payment or to check the complexity of your circumstances the government website, https://www.gov.uk/stamp-duty-land-tax/residential-property-rates, can be used. However, there are so many permutations to calculate SDLT accurately, the HMRC online calculator may not calculate the tax correctly.
This is why, when we act for buyers of a property, the details will be referred to a company we work alongside called ‘SDLT Check’. This company has expertise in calculating SDLT on each matter correctly. This involves buyers completing a questionnaire to provide full details of the purchase. A more complex matter will involve a telephone discussion with SDLTCheck.
What exactly is your legal expert’s role?
Not being tax experts, we will not comment or advise on the rate payable by yourself or what reliefs are available to yourself. This requires expert advice from a tax specialist which is why we refer all SDLT calculations to SDLTCheck.
Not all transactions will attract SDLT and SDLT Check will advise if this is the case. However, on those on which any SDLT is payable we will submit an ‘SDLT return’ and pay the amount calculated on the day of completion on your behalf. This then enables us to make the application to Land Registry to register the property in your name.