Q&As

A landowner is selling self-build serviced plots on a multi-unit site. The landowner will not be responsible for construction of the units. The construction will be undertaken by a third party building contractor under a separate agreement from the plot sale agreement. The buyer of each plot will be required under the plot sale agreement to enter into a building contract on or before completion of the plot sale to ensure consistency of development across the site. Will SDLT be due on the payments under the building contract as well as under the plot sale agreement?

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Published on LexisPSL on 14/08/2019

The following Tax Q&A provides comprehensive and up to date legal information covering:

  • A landowner is selling self-build serviced plots on a multi-unit site. The landowner will not be responsible for construction of the units. The construction will be undertaken by a third party building contractor under a separate agreement from the plot sale agreement. The buyer of each plot will be required under the plot sale agreement to enter into a building contract on or before completion of the plot sale to ensure consistency of development across the site. Will SDLT be due on the payments under the building contract as well as under the plot sale agreement?

Stamp duty land tax (SDLT) is generally calculated by reference to the chargeable consideration given for the subject matter of a chargeable transaction, directly or indirectly, by the buyer or a person connected with the buyer. This is subject to market value charges that apply in certain circumstances. For further details of the market value rules, see Practice Note: SDLT chargeable consideration.

Chargeable consideration has a particular meaning for SDLT purposes. Chargeable consideration includes not only money or money’s worth but also other means by which value is given to the seller of the land.

The chargeable consideration that a buyer gives on the acquisition of a building plot and whether that includes the value of the works to build the house will depend on the precise contractual terms of the sale contract and building contract. Set out below are some general issues

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