Posted by James Pearson on 03 Dec 2014
Stamp Duty Land Tax (SDLT) Changes
The Chancellor’s Autumn Statement set out changes to Stamp Duty Land Tax (SDLT) that were introduced from midnight 4 December 2014.
SDLT will now be charged on residential property at the rate applicable for each slice of the property value falling in each band, rather than the whole value at the applicable rate. The bands and rates are:
- 0% paid for the first £125,000.
- 2% on the portion from £125,000 up to £250,000.
- 5% from £250,000 up to £925,000.
- 10% from £925,000 up to £1.5m.
- 12% on anything above £1.5m.
Relief for disposals of multiple dwellings still has a minimum rate applicable to the total proceeds of 1%.
SDLT Banded System
While we are pleased to see the change to a banded system that will avoid the market distortion around the thresholds caused by the previous system, it is disappointing to see that SDLT is still being charged on properties worth as little as £125,001.
Additionally, commercial and mixed use properties are still subject to the previous system of a single rate applicable to the entire purchase price. If a banded system is deemed more equitable for residential property, it seems inconsistent to not extend that treatment to also cover commercial property. High-value residential properties purchased by companies are also still subject to a flat rate of 15%.
The introduction of the banded system for residential properties is a welcome modernisation, but the failure to include commercial and mixed use properties means the Chancellor’s changes fall short of being the full update that this controversial tax requires.
Contact Tax Innovations about SDLT
If you would like any advice regarding the above article or would simply like to discuss other ways in which we could help you or your business, please contact us on 01962 856 990 or firstname.lastname@example.org.
- HMRC EFRBS Settlement Opportunity
- Non-Resident Landlords – UK Tax Update
- Tax Relief For Residential Mortgages
- Property Partnership Incorporation and SDLT
- Top 10 Expat Tax Tips for Individuals Moving to the UK