A Complete Guide on SDLT Returns

Any acquisition of land or buildings in England and Northern Ireland is chargeable to Stamp duty and land tax (SDLT). SDLT is payable irrespective of whether the buyer is a UK resident or not. The buyer of the land or property needs to file an SDLT return to notify HMRC about the transaction. The SDLT return must include a self-assessment of the tax chargeable on the transaction.

For what types of transactions SDLT return is required?

Following are the major types of transactions that require reporting to HMRC by filing SDLT return:

• The acquisition of a freehold if the chargeable consideration is £40,000 or more.
• The grant of a lease for a term of 7 years or more where the premium is £40,000 or more.
• The assignment or surrender of a lease which, when originally granted, was for 7 years or more and the chargeable consideration for the assignment or surrender is £40,000 or more.
• The assignment or surrender of a lease which, when originally granted, was for less than seven years and the assignment or surrender gives rise to actual SDLT liability, or relief is claimed.
• The acquisition of a non-major interest in land (e.g. an easement or an option) if it gives rise to actual SDLT or would do but for a relief.

What types of transactions are exempt from filing SDLT returns?

Following are the major types of transactions which does not require the filing of SDLT return:

• A transaction where there is no chargeable consideration or nil consideration.
• Certain transactions between spouses, or between civil partners, in connection with divorce, dissolution or separation.
• Certain leases granted by registered social landlords.
• Certain assents or appropriations by personal representatives.
• Certain variations of testamentary or intestacy provisions

I am claiming SDLT Relief resulting in nil SDLT liability, should I still file SDLT return?

Yes, the relief does not exempt the purchaser from filing an SDLT return with HMRC. Even to claim relief, SDLT return must be filed with a tick on the appropriate box of SDLT return for the relevant relief.

What is the deadline for filing an SDLT return and payment of SDLT?

The purchaser must deliver an SDLT return (land transaction return) within 14 days of the effective date. The completion date is usually the effective date of the transaction. The payment for SDLT should also reach HMRC within this timeframe of 14 days.

Are there penalties for the late filing of SDLT returns?

The penalties for late filing of an SDLT (Stamp Duty Land Tax) return are as follows:

• If the return is filed within three months of the filing date, the penalty is £100.
• If the return is filed more than three months after the filing date, the penalty increases to £200.
• If the return is filed or fails to be filed within 12 months of the filing date, a tax-based penalty of up to 100% of the tax due may be imposed.
• If HMRC issues a formal notice for a return to be delivered after the filing date and there is non-compliance within the specified period (which must be at least 30 days), a daily penalty of up to £60 per day may be imposed, subject to a tribunal order.

It is important to note that taxpayers have the right to appeal with HMRC within 30 days of receiving a formal penalty notice by providing the reason for the appeal along with supporting documentation.

Additionally, interest will accrue on any unpaid SDLT tax from the due date of payment until the full payment date is made.

Is SDLT return required for the Land Registry?

As per Section 79 of Finance Act 2003, the Chief Land Registrar are not to register, record or otherwise reflect in a register entry any document effecting or evidencing any notifiable transaction unless the purchaser produces a certificate from the Stamp Office which is usually an SDLT5 certificate. So, generally, SDLT return is required by the Land Registry.