UK Law and Practice Contributed by: Colin Rodrigues and Harminder Sandhu, Hawkins Hatton Corporate Lawyers Ltd
Higher Rates of SDLT A 3% penal rate of SDLT applies on top of the standard rate for each subsequent purchase by a purchaser who owns one or more dwellings. SDLT is also payable where non-residential or mixed-use land is purchased for more than GBP150,000. For between GBP150,000 and GBP250,000, the rate is 2%, and thereafter 5%. Non-residential property includes: • commercial property (eg, shops or offices); • agricultural land; • forests; • any other land or property not used as a resi - dence; and • six or more residential properties bought in a single transaction. A “mixed-use” property is one that has both a residential and non-residential element (such as a flat above a shop). SDLT rates on non-residential and mixed-use land are: • GBP0 to GBP150,000 – 0%; • GBP150,001 to GBP250,000 – 2%; and • more than GBP250,001 – 5%. Non-residential Leasehold Sales and Transfers If a new non-residential leasehold property is purchased, in the event that the total rent of the lease over the duration of the lease is GBP150,000, SDLT at a rate of 1% is payable above GBP150,000. • GBP0 to GBP150,000 – 0%; • GBP150,001 to GBP5 million – 1%; and • more than GBP5 million – 2%.
SDLT Reliefs and Exemptions Reliefs The following reliefs can be applied for: • first-time buyer; • multiple dwellings; • a building company buying an individual’s home; • employers buying an employee’s house; • local authorities making compulsory pur - chases; • property developers providing amenities to communities; • companies transferring property to another company; • charities; • right-to-buy properties; and • registered social landlords. Exemptions SDLT is not payable and no SDLT return needs to be filed if: • no money or other payment changes hands for a land or property transfer; • property is left in a will; • property is transferred because of divorce or dissolution of a civil partnership; • freehold property is purchased for less than GBP40,000; • a new lease of more than seven years is pur - chased or assigned, provided that the pre - mium is less than GBP40,000 and the annual rent is less than GBP1,000; • a new lease of less than seven years is bought or assigned, provided that the amount paid is less than the residential or non-resi - dential SDLT threshold; and/or • an alternative property financial arrangement is used.
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