Stamp Duty Land Tax Exemptions
Stamp Duty Tax Refund (SDLT) is charged on property transactions in the UK when their value is above a certain set threshold. Depending on the nature of transactions, there are some cases where the buyer will qualify for reliefs that reduce the amount of tax paid, or they will be fully exempted from paying SDLT.
As the rules on SDLT have changed in the last few years, and are also subject to annual reviews, it is pivotal to consult a professional when it comes to SDLT exemptions and reliefs, even for the most straightforward property purchases.
As of November 2017, first-time buyers are exempt from Stamp Duty on properties up to £300,000.
There are several other cases when you can be eligible for an SDLT exemption.
There are no money or other payment exchanges during the property transfer.
The property has been left to you in someone’s will
The property is transferred or split because of divorce or dissolution of a civil partnership
The purchased property is a freehold property bought for less than £40,000
When you buy an assigned lease of 7 years or more, as long as the premium is less than £40,000 and the annual rent is less than £1,000
When you buy a new or assigned lease of fewer than 7 years but the amount you pay is less than the residential or non-residential SDLT threshold
When alternative property financial arrangements have been put in practice, for example, to comply with Sharia law
SDLT Exemptions for Companies
Stamp Duty Land Tax (SDLT) is charged at 15% on residential properties costing more than £500,000 bought by companies and other corporate bodies.
In certain cases, the 15% charge may not apply. This can be when a property was bought by a company, acting as a trustee of a settlement or if the property bought by a company to be used for one of the following reasons:
When the property will be used for property rental business
When the property is used for developers and trader
If the property is made available to the public
When financial institutions are acquiring property in the course of lending
When the property is occupied by employees
Building Company Buying an Individual’s Home
In the case when a building company buys a home from someone who is buying a new home from them, the property, which is bought by the company is exempt from SDLT if certain conditions are met. These include specifications around the area size of the property and the living arrangements of the individual who is selling the property.
Employer Buying an Employee’s Home
As a result of job relocation, sometimes an employer might wish to buy the Employee’s home. In this case, the employer or property trader will be exempt from SDLT under certain conditions. These will mostly depend on the employee’s living situation, and the purchase will only be exempt from Stamp Duty Land Tax if the employee had to move as a result of a job relocation.
How to Claim SDLT Exemption?
Stamp Duty Land Tax reliefs and exemptions can be complicated to claim because of the various rules and changing requirements. Consulting a tax specialist will help you or your business assess the possibilities for SDLT exemptions and relief, prior to your property purchase, or claim an SDLT refund if you’ve overpaid tax for a property you already own.
CapEx’ Associates will investigate your purchases and offer you advice from a qualified Chartered Tax Advisor, so you have peace of mind that this is legitimately being inspected. Contact us today to find out how our experts can help.