Autumn Budget Summary 2024
Stamp Duty Land Tax (SDLT) is a compulsory tax which must be paid if you buy a property over a certain price in England. The current SDLT threshold for residential properties is £500,000; however, this is changing from the 30thJune 2021.
From 1st April 2021, a new SDLT rate was introduced for buyers of residential property who are non-UK residents. This adds 2% rate of tax to all rates of SDLT payable on the purchase of residential property. It also applies to companies if they are owned by a non-UK resident. The surcharge does not apply to non-residential or mixed-use properties.
The test for residency is set out on the HMRC website. In essence, an individual is not considered a UK resident unless they spend at least 183 days in the UK in the 12 months leading up to the purchase of property, even if they intend to live full-time in the property.
Conditions:
- If you are married or in a civil partnership, as long as you are not separated and neither of you is acting as a trustee of a settlement, if one of you is UK resident then you are both treated as UK residents.
- Corporate buyers are non-UK resident if they are not UK resident for Corporation Tax purposes at the effective date of the transaction.
- Partners in a business partnership buying a residential property together are treated as joint buyers.
- Trusts are treated as non-UK resident if any trustee is a non-UK resident under the SDLT residence tests. This rule does not apply where the trust is either: a bare trust, or one in which any beneficiary is entitled to remain in the property for life or entitled to income arising from the purchased property. In such cases, the residence status of the beneficiaries of the trust is used to establish whether the purchase is subject to the surcharge or not.
If you would like any further information on residential sales or purchases, please contact Piers Meadows on 01932 852057 or piersmeadows@meadowsryan.com
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