Stamp duty land tax

Stamp duty land tax (‘SDLT’) was introduced with effect from 1 December 2003: at the same time, stamp duty was abolished.

SDLT is a tax on land transactions that requires the taxpayer to self-assess the SDLT liability. The tax applies to any transaction in land: defined as ‘the acquisition of a chargeable interest in land’. For the purposes of SDLT, an acquisition encompasses a surrender, release, or variation, as well as the creation of a chargeable interest. The term ‘chargeable interest’ is widely defined, being ‘an estate, interest, right or power in or over land in the UK; or the benefit of an obligation, restriction or condition affecting the value of any such estate, interest, right or power’.

From 1 April 2015 SDLT has ceased to apply in Scotland, where it has been replaced by Land and Buildings Transaction Tax.

The rates of SDLT effective from 4 December 2014 applying to non-corporate buyers, to corporate entities for the purposes of a property rental business or where the property is to be made available to the public are shown below. They are based on a fixed percentage of chargeable consideration and differ depending on whether the land is to be used solely for residential or for non-residential or mixed purposes. Corporate entities purchasing land for other purposes may be liable for SDLT at 15% (subject to some further exclusions) on residential properties costing over £500,000.

Certain transactions are exempt from SDLT of particular relevance to the charitable sector include gifts where there is no chargeable consideration, such as a gift of property left under the terms of a will.

There is also no SDLT liability in cases where a registered social landlord grants a lease either containing an indefinite term or which is terminable by notice of one month or less to one or more individuals, provided that the grant results from arrangements between the registered social landlord and a housing authority where the authority nominates the tenants.

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