SDLT
Hannah Mackinlay
LLB MA Solicitor
www.propertylaw.guru
IT'S NOT
STAMP DUTY
There is no Stamp Duty
•
There is no Stamp Duty on deeds any more
•
But there is a new tax on land transactions
•
A Self-assessed tax not a voluntary duty
• Just like all the other taxes with the same HMRC
powers to investigate
Not a duty on docs
•
A transfer for £255 k could be taxed at:
•
Market value if connected company
•
0% if relief or exemption
•
1% if averaged - multiple resi. purchases
•
3% if standalone and up to ..
•
5% or more if linked with another transaction
Communication
•
Clients must know it is not Stamp Duty
•
And that it is like Income Tax
•
Call it SDLT on everything esp. statements
•
Make it clear that the figures stated can be
reviewed by HMRC
•
And that it isn’t part of your fee to deal with queries
raised
The taxpayer is key
•
Dangers of automated systems
•
Need to ask questions of the clients
•
If there are other Linked Transactions
•
Connected Parties
•
Fixtures and other consideration
•
Other parts of the deal not revealed to you
SDLT5 - not finality
•
Land Registration is not the aim of submitting an LTR
•
Long time to catch up
•
Warning bells being rung by HMRC
•
More investigations likely of ordinary conveyancing
transactions – Orsman v HMRC ([2012] UKFTT 227
•
You might end up paying the extra tax, penalties and
for thecosts of the investigation!
ITS NOT
STAMP DUTY
Risk management
•
Hurlingham Estates v Wilde & Partners 1997
•
Enquiry window - up to 20 years
•
New penalties regime - 30% to 100% of tax
Self Assessment
•
Just like all the other taxes
•
Voluntary Disclosures
•
Don’t get caught underwriting the amount of the
tax
•
Or you will end up paying it!
•
Make it clear that it is subject to enquiry or
variation
Structure
•
‘A land transaction’
•
‘Chargeable Interest’
•
Exempt interest vs. Reliefs
Effective Date
•
Effective Date
•
Substantial Performance
•
Examples
Commercial or Residential?
•
Significance - Multiple property relief if
Residential for example
•
Definition is an ‘exhaustive’ one
•
When do you apply the test?
•
Rates of tax and Enveloped Dwellings - ATED
IT'S NOT
STAMP DUTY
Linked Transactions
•
Example - easy to miss or be misled
•
Linked transactions, enquiries and warnings
•
Linked even if no contractual linkage
•
Linked even on different months
•
Client has to self-assess if linkage
•
But Multiple Dwelling relief for Residential properties
Connected Parties
•
Example - easy to miss or be misled
•
Care with close or extended families and nonnative speakers
•
Also businesses, companies, etc.
•
Can be very hard to work out
•
Don’t end up underwriting the risk
Self assessment
•
What if the answer isn’t clear
•
You aren’t acting for the taxman
•
But you are a tax agent
•
Voluntary disclosures?
•
But don’t try to be too crafty
Consideration
•
R v Orsman
•
Chattels, works, cash
•
Quantification and apportionment
•
Goodwill
•
Put the risk on the client, not you!
Risk Management
•
‘Arrangements’, deals, etc.
•
Intrusive questioning?
•
Are you the right one to make the decision
•
Accountants involved?
Reliefs from SDLT
•
Long list of possible reliefs
•
Still notifiable if consideration exceeds threshold
•
Right to Buy relief
•
Shared ownership
•
Worked examples
Exemptions from SDLT
•
Not notifiable
•
Self Assessed whether exempt
•
Penalties for not filing a return if you got it wrong
•
Examples
Conclusion
•
Its not stamp duty!
•
Greater responsibilities on you
•
You end up paying the clients tax if you don’t ask the
right questions
•
Communication is key
•
Use standard guides and checklists
•
www.propertylaw.guru for templates and examples
www.propertylaw.guru
www.propertylaw.guru
www.propertylaw.guru
IT’S NOT
STAMP DUTY