More SDLT advice from our archives

In an ordinary purchase you will pay normal SDLT, if you are purchasing a second residential property you will pay an extra 3% tax which can be claimed back in certain circumstances. We are relying on your instructions to calculate the tax and if you do not provide accurate information you can be prosecuted for misleading the revenue. It is your responsibility to make sure you tell is about anything which may affect your SDLT liability and especially second properties.
The government have introduced an extra 3% tax on all residential properties bought for more than £40,000. There are only two excemptions to this tax:-
1. You are purchasing your first residential property.
2. The land you are purchasing does not have a dwelling on it.
If you sell your residence before you buy your next residence then you will not have to pay the 3% surcharge. If you purchase your next residence before you sell (by one day only) you must pay the 3% surcharge and claim it back. You have 3 years from the purchase to claim back the surcharge if and when you sell your other house. If you keep your residence and for example change it to a buy to let and then buy another residence to live in, you must pay the surcharge.
The surcharge applies to these examples:-
1. Extending your lease of your flat (as your lease extension is a surrender and regrant of the lease at law)
2. Proposed land being developed into residential houses
3. If two or more people are buying jointly and any one of them already owns a residence anywhere in the world.
4. If you have a beneficial interest under a trust or an inheritance which is not registered at HMLR (i.e. no legal title)
5. If you purchase a holiday home
6. Companies always pay the surcharge even on the first property.
This is not an exclusive list. You must assume you have to pay the surcharge and then look for a solid excemption to apply. The fines for non payment are substantial.
Examples of non dwellings for the second excemption are:-
1. Leases of less than 7 years i.e. leases not registerable at HMLR
2. Granny annexes or granny flats (you should however check multiple dwellings relief options to save SDLT)
3. Caravans
4. Gardens
5. Bare land not intended to be developed.
Please notify us which excemption you intend to rely on, or if you are just very confused and worried please ring or email for advice and we will help. We look forward to hearing from you.
VIP – All claims for a repayment of the higher rates of SDLT must be received by HMRC within 3 months of the effective date of sale of the previous main residence or within 12 months of the filing date of the return, whichever comes later.
EXCEMPTIONS & UNUSUAL CHECKS FOR SDLT – please enquire if these apply to you as there may be able to claim a relief (but we do charge for the extra work on a time basis)
1. You are purchasing a non residential property or a ‘mixed use property’ with a flat and a shop for example in one building – lower rates may apply
2. A garden attached to a house – is residential property and not exempt from residential rates
3. A building project where the walls have not been constructed, or the property is seriously dilapidated and not habitable – this is NON residential and may qualify for a lower rate
4. Company purchase – special rules apply and the company will pay high rate tax. There are exemptions for company purchases over £500,000.
5. Granny Annex or flat – if you are purchasing one plot of land with more than one dwelling on it  – you may purchase each property individually to lower the over all rate of tax. You will not pay high rate SDLT on the annex or other dwelling if it is worth less than 1/3 of the overall price. You must get a proper independent valuation to confirm this.
6. If you are purchasing jointly and one of you already owns a house – you must pay the high rate tax
7. If you are in the process of a divorce and buying a house to move out of the family home – you may be able to avoid high rate charges – please let us know
8. First time buyers pay no SDLT up to £300,000, but 5% SDLT if you go above £500,000 and the tax is paid on the whole price.
We recommend you tax independent tax advice also to see if you recover SDLT after completion as you can often recover overpaid tax but there are strict deadlines to do this. Again if you want to instruct the firm to try to claim back overpaid SDLT please let us know.
Advice about multiple dwellings relief for Stamp Duty Land Tax.

If you are purchasing more than one property in one go, or several properties connected to each other e.g. three flats in a portfolio, a single titley with more than one dwelling, house, shop or property, or mixed use property, please notify us immediately as you may benefit from multiple dwellings relief or you may be able to apply non residential rates to your transaction

We can look at applying reliefs and or lower rate to reduce your SDLT liability in accordance with HMRC guidelines.

Multiple Dwelling relief is where you are (for example) purchasing three properties but you elect to purchase each property individually to maximise the reliefs and nil rate bands for each property. You do not generally pay high rate tax on a multiple dwelling unless the smaller dwelling is worth more than 1/3 of the value of the whole title.

There are also strict time limits to claim back overpaid SDLT – please let us know if you want the firm to do this for you. We recommend you get an SDLT specialist to advise in complex cases.

Please note – company purchases of residential property over £500,000 – there are high rates applicable, but also complex reliefs to – please let us know if this applied to you.

We look forward to hearing from you.

Capital Gains Tax – please note the firm does provide CGT advice and your refer your CGT questions to an accountant! This is a reminder and some guidance to make sure you neet the new rules –

HM Revenue and Customs (HMRC) have issued a reminder that the deadlines for paying Capital Gains Tax (CGT), where there is a liability to do so, after selling a residential property in the UK, changed on 6 April 2020.

From 6 April, any UK resident individual must now tell HMRC, in cases where CGT is due, and pay within 30 days from completion.

HMRC previously published a news item on GOV.UK about this and there is more information on GOV.UK.

This includes information on:

  • When you need to report CGT within 30 days,
  • The online service set up on 6 April allowing UK and Non-UK residents to report and pay any relevant CGT liability,
  • The amended rules for reporting and paying CGT for non-UK residents, disposing of UK property or land (including non-residential UK property),
  • Advice for agents,
  • Trusts – trustees and their advisers should also be aware of the tightened reporting and payment windows that they will face.

HMRC have issued the following reminders about the changes:

  • From 6 April 2020 the deadlines for filing and paying CGT on the disposal of an interest in UK residential property by UK residents changed.
    From then, anyone who disposes of a UK residential property, that isn’t their main home and makes a Capital Gain where there is tax to pay, must tell HMRC and pay the CGT due within 30 days of completion.
  • This doesn’t apply if the residential property is the person’s main home and it’s been used solely as their private residence during the time it was owned. This is because the disposal will be covered by Private Residence Relief (PRR).
  • The rules also changed for non-UK residents notifying HMRC of a disposal of both UK residential and non-residential property regardless of whether there is a gain or not.
  • Non-UK residents are still required to notify HMRC of the disposal via the online service but will not be able to defer any payment due to the Self-Assessment Tax Return.
  • If someone doesn’t report gains on property within the 30-day time limit they may be liable to a late filing penalty, and if the tax is not paid within the same time limit, they may have a late payment penalty and be subject to late payment interest.

This is a significant change for people who would previously only have had to enter the details on their Self-Assessment return and pay the tax due in line with the SA deadlines

Kind Regards

Clifford Smith & Buchanan Solicitors – part of Guardian Wills and Probate Services Limited, Legal Department Tel 01282 693182,


COVID-19 – We strongly recommend clients arrange all meetings via phone or video call. Documents which need signing will be emailed or downloaded from our portal. Since we use electronic systems for estate agents and legal work already our day to day work is not heavily affected by working remotely. However,  we sometimes need to witness a deed, or have two people witness a will (so that three people are in the room at the same time), or swear an oath before a solicitor in person. You will need to make your own arrangements to witness documents and make sure they are executed properly – please ask for advice if in doubt.

NB – due to the corona virus risks you will need to witness documents at home and post them to the office. Witnesses should always be independant i.e. not a spouse, and not a legal or beneficial owner of the property which is the subject of the deed or a beneficiary in a a will. For an ordinary deed the witness must be in the room with you when you sign. The witness must also sign in the witness box and print their name address and occupation. For a will you must have two independant witnesses so that all three people are together in the room at the same time when you sign the document. Both witnesses for a will should sign in the witness box and print their name address and occupation.

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