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Stamp Duties

Stamp duties are charged on transfers of shares, land and interests in partnerships.

Shares

The rate of stamp duty/stamp duty reserve tax on transfers of shares and securities is 0.5%.

Situations where stamp duty is not chargeable include:

  • Where the consideration is less than £1,000
  • Transactions carried out orally
  • Gilt-edged securities

Land

Residential properties

Under new rules, announced in Autumn Statement 2014, Stamp Duty Land Tax (SDLT) on the purchase of residential properties is charged at each rate on the portion of the purchase price which falls within each rate band.

The new rates and thresholds are:

Property value band (£) Rate (%)
0 - 125,000 0
125,001 - 250,000 2
250,001 - 925,000 5
925,001 - 1,500,000 10
1,500,001 and over 12

Non-residential properties

The rules for non-residential properties remain unaltered. If the value is above a threshold, SDLT is charged at that rate on the whole amount of the consideration. The rates and thresholds are:

Property value band (£) Rate (%)
0 - 150,000 0
150,001 - 250,000 1
250,001 - 500,000 3
Over 500,000 4

New Leases

SDLT is charged according to the net present value of all the rental payments over the term of the lease (NPV), with a single rate of 1% on residential NPV's over £125,000 and on non-residential NPV's over £150,000.

VAT is excluded from treatment as consideration provided the landlord has not opted to charge VAT by the time the lease is granted.

Lease premiums

SDLT on premiums is the same as for transfers of land (except that the zero rate does not apply where the annual rent of a non-residential property is £1,000 or more).

Partnerships

Stamp duty continues to apply to transfers of partnership interests, but the amount payable will not exceed the amount that would have been payable on the value of any shares or securities included in the transfer.

SDLT applies to the transfer of an interest in land into or out of a partnership (where the partnership property includes an interest in land). The charge is based on the market value of the land and the proportionate interest transferred, and it applies only to partnerships whose sole or main activity is investing in or dealing in land. There is no longer an SDLT charge on transfers of partnership interests in other partnerships such as professional partnerships, farming partnerships or partnerships carrying on a trade which is not land-related.

Devolution

Scotland

The Scotland Act 2012 gives the Scottish Parliament the power to set a Scottish rate of income tax and to raise taxes on land transactions and waste disposal to landfill. From April 2015 SDLT will no longer apply to land transactions in Scotland. The Scottish Government is introducing Land and Building Transaction Tax (LBTT) to replace SDLT.

The proposed rates and bands of LBTT for purchase of residential land or property are currently:

Property value band (£) LBTT Rate (%)
0 - 125,000 0
145,001 - 250,000 2
250,001 - 325,000 5
325,001 - 750,000 10
750,001 and over 12

For non-residential property transactions, the rate of tax is determined in the same manner as for residential property transactions, but by reference to different proposed rates and bands:

Property value band (£) LBTT Rate (%)
0 - 150,000 0
150,001 - 350,000 3
350,001 and over 4.5

Wales

The Wales Act 2014 paves the way for new tax powers to come to Wales. A consultation document has recently been issued setting out proposals for a Land Transaction Tax to replace SDLT in Wales from April 2018.

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