Stamp Duty Land Tax

What is Stamp Duty?

It is a tax payable on the creation, surrender, release or variation of a land interest and was introduced in 2003. Most people pay Stamp Duty Land Tax (Stamp Duty or SDLT for short) on the purchase of a property. There is no Stamp Duty payable on properties up to £125,000. Above this level, every purchase of a property will attract a payment of Stamp Duty as follows:

Purchase priceStamp Duty rate
£0 to £125,000 0%
£125,000.01 to £250,000 1%
£250,000.01 to £500,000 3%
£500,000.01 to £1,000,000 4%
£1,000,000.01 to £2,000,000 5%
£2,000,000,01 and over 7%

Which transactions are not subject to Stamp Duty Land Tax?

  • Transfers of property resulting from divorce or the dissolution of a civil partnership
  • Property bequeathed in a Will
  • Transactions where no money is paid
  • Certain lease transactions

Can you reduce the Stamp Duty Land Tax?

Often solicitors are asked if their clients can pay a reduced price for a property and pay separately a price for moveable items included in the price. Purchasers must be really careful here not to be found to be defrauding H M Revenue & Customs. You will have to convince your solicitor that the second hand value of the items is actually no more than the sum you are paying. Your loan will be based on the price you pay for the house and you will have to pay the additional sum yourself. You should be aware that H M Revenue & Customs are entitled to investigate such transactions and will take you to court if they consider that you are guilt of defrauding them.

The Scottish Parliament will have new financial powers from 2015 over taxes on land and property transactions and the law and probably the rates of Stamp Duty paid will change.

We hope you find this useful.

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