Stamp duties are charged on transfers of land, shares and interests in partnerships.
The rate of stamp duty/stamp duty reserve tax on transfer 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
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.
Stamp duty land tax (SDLT) applies to the transfer of an interest in land into or out of a partnership or the transfer of an interest in 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.
For non-residential property, if the value is above a threshold, SDLT is charged at that rate on the whole amount of the consideration.
|Consideration (£)||Rate (%)|
|0 - 150,000||Nil|
|150,001 - 250,000||1|
|250,001 - 500,000||3|
A 15% rate will apply to properties over £500,000 purchased by certain non–natural persons.
In Autumn Statement 2014, the chancellor announced changes in the rules for calculating the stamp duty land tax (SDLT) chargeable on purchases of residential properties. The existing SDLT rules for non-residential or mixed properties remain unaltered. Also unaltered are the provisions relating to non-natural persons.
Under the old rules, SDLT was charged at a single percentage of the price paid for the property, depending on the rate band within which the purchase price fell. From 4 December 2014, SDLT will be charged at each rate on the portion of the purchase price which falls within each rate band.
The new rates and thresholds are:
|Consideration (£)||Rate (%)|
|0 - 125,000||Nil|
|125,001 - 250,000||2|
|250,001 - 925,000||5|
|925,001 - 1,500,000||10|
|1,500,001 and over||12|
This new measure will have effect on and after 4 December 2014. The measure will apply in Scotland until 1 April 2015, when SDLT is devolved.
Where contracts have been exchanged but transactions have not completed on or before 3 December 2014, purchasers will have a choice of whether the old or new rules apply. HM Revenue & Customs have produced an online calculator to help in calculating the duty payable under both sets of rules: http://www.hmrc.gov.uk/SDLT/calculate/calculators.htm
Duty 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 NPVs over £125,000 and on non-residential NPVs 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.
Duty on premiums is the same as for transfers of land (except that the zero rate does not apply where rent of over £1,000 annually is also payable).
The legislation relating to stamp duties is very complex, mainly because of anti-avoidance provisions, and professional advice is essential.