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, and
  • 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?

Failure to send a land transaction return (SDLT return) by the due date will result in an immediate penalty of £100. If the failure continues beyond six months, a further penalty of 5% of the SDLT (or £300 if greater) is due. If the failure continues for 12 months, a further penalty of 5% of the tax due (or £300 if greater) may be payable.

Also, there would be a penalty for the late payment of SDLT. Failure to pay SDLT within 30 days of the due date will result in a penalty of 5% of the unpaid tax. A further penalty of 5% of unpaid tax is applied if the tax is outstanding for more than six months and an additional 5% of unpaid tax applicable if still due for 12 months.

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.

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