Changes to the Stamp Duty Payment Window
The government has confirmed its plans to reduce the time limit for filing Stamp Duty Land Tax (SDLT) returns and paying any tax due.
First announced in 2015, the measure was due to come into effect in 2017/18, but was subject to a delay. The publication of the draft Finance Bill 2018-19 in the summer has confirmed the plans.
The new timescales
SDLT is payable on the purchase of land and buildings in England and Northern Ireland. Under the existing rules, purchasers currently have 30 days from the effective date of the transaction (usually the completion date) to file an SDLT return and pay the tax due.
Following the changes, for transactions with an effective date on or after 1 March 2019, the time period for filing and paying tax will be reduced to 14 days.
Separate rules apply in Scotland and Wales, where the Land and Buildings Transaction Tax (LBTT) and Land Transaction Tax (LTT) apply respectively. LBTT and LTT returns must currently be made, and tax paid, within 30 days of the effective date of the transaction.
Other considerations
The amount of duty payable depends on factors such as whether the land or property is residential, non-residential, or of mixed use. Non-residential property includes commercial property (such as shops and offices); agricultural land; or six or more residential properties bought in a single transaction. The current starting thresholds for SDLT, LBTT and LTT are as follows:
| Residential | Non-residential | |
| SDLT | £125,000 | £150,000 |
| LBTT | £145,000 | £150,000 |
| LTT | £180,000 | £150,000 |
First-time buyers in England and Northern Ireland can benefit from a new relief on the first £300,000 of residential purchases up to £500,000, while a similar first-time buyer exemption can apply to the first £175,000 of residential purchases in Scotland.
Across the UK, residential rates may be increased by 3% on the purchase of additional residential properties. Although these are targeted at second home owners and buy-to-let landlords, the higher rates can also impact other purchasers. Care is therefore needed if an individual owns or partly owns a property, and has not disposed of the first before transacting to purchase a second. This scenario may arise where, for example, there is a delay in selling the main residence and a new purchase has completed.
We can advise on all areas of tax and property. Please contact us for further assistance.
Please note: This article is a commentary on general principles and should not be interpreted as advice for your specific situation.
