Stamp duty land tax ― basic rules for companies

Produced by Tolley in association with Grant Thornton's stamp taxes team
  • (Updated for Budget 2020)
Stamp duty land tax ― basic rules for companies

The following Corporation Tax guidance note Produced by Tolley in association with Grant Thornton's stamp taxes team provides comprehensive and up to date tax information covering:

  • Stamp duty land tax ― basic rules for companies
  • Introduction
  • Temporary increase in nil rate band for residential property purchases due to the coronavirus (COVID-19) pandemic
  • Acquisition of chargeable interest
  • Contracts to acquire a chargeable interest
  • SDLT rates and thresholds ― overview
  • SDLT rates and thresholds ― residential land or property
  • Residential property purchase 8 July 2020 to 31 March 2021 ― corporate purchaser
  • Residential property purchase 1 April 2016 to 7 July 2020 and 1 April 2021 onwards ― corporate purchaser
  • Residential property (rent) ― corporate purchaser
  • More...

Introduction

Stamp duty land tax (SDLT) is generally payable on the purchase or transfer of interests in land and buildings in England and Northern Ireland where the amount paid is above a certain threshold. In addition, most of these land and property transactions must be notified to HMRC on an SDLT return, even if no tax is due. Please refer to the SDLT ― administration guidance note for further commentary on notifiable transactions.

From 1 April 2015, land and buildings transaction tax (LBTT) applies to land transactions in Scotland. For details of LBTT, see Sergeant and Sims on Stamp Taxes AA12–AA22 (SSSD, AA[AA351]–SSSD, AA[AA851]). See also the Revenue Scotland website.

From 1 April 2018, land transaction tax (LTT) applies to land transactions in Wales. For details of LBTT, see Sergeant and Sims on Stamp Taxes AA23–AA34 (SSSD, AA[AA901] – SSSD, AA[AA2101]. See also the Welsh Government website.

Whilst the underlying rules applying to LBTT, LTT and SDLT are broadly similar in nature, the taxes are not identical. The rest of this guidance note covers the law that applies to transactions in England and Northern Ireland.

For details of the 2% proposed SDLT surcharge on purchases of residential property in England and Northern Ireland by non-residents that is expected to apply from 1 April 2021, see the end of this guidance note.

This guidance note focuses on the rules for transactions where the purchaser is a company. For the rules that apply to individuals, see the SDLT on property acquisitions by individuals guidance note.

Temporary increase in nil rate band for residential property purchases due to the coronavirus (COVID-19) pandemic

The Government announced a change to the SDLT rules as a result of the coronavirus pandemic. There is a temporary increase to the nil rate band on residential property purchases from £125,000 to £500,000 where the acquisition of a chargeable interest takes place between 8 July 2020 and 31 March 2021. This is discussed further below.

Acquisition of chargeable interest

A

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