Stamp Duty Land Tax (SDLT) is charged on property transactions in the UK when their value is above a set threshold. Depending on the nature of these transactions, there are some cases when the buyer will qualify for SDLT relief or Stamp Duty exemptions. The rules on SDLT are subject to annual reviews and have continued to change over the last few years. Therefore, consulting a professional for SDLT exemptions and reliefs is paramount, even for the most straightforward property purchases.
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SDLT Exemptions

As of November 2017, first-time buyers are exempt from paying Stamp Duty Land Tax on properties up to £300,000.

There are several other cases in which you can be eligible for an SDLT exemption.

  • There are no money or other payment exchanges during the property transfer. In these circumstances, you also don’t need to file an SDLT return.
  • You are named as property owner in someone’s will. This includes properties with outstanding debts, like mortgages.
  • The property is transferred or split because of divorce or dissolution of a civil partnership
  • The transaction is for a freehold property with a purchase price 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 (e.g. to comply with Sharia law)

*NOTE*

In light of Covid-19, the Government has introduced new temporary rules on SDLT exemptions in England and Northern Ireland. As of July 2020, you are not required to pay Stamp Duty Land Tax on residential properties of up to £500,000. These rates will remain in place until 31st of March 2021. Find out more information here .

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 corporate organisations.

In certain cases, the 15% charge may not apply. This applies to properties bought by a company acting as a trustee of a settlement. SDLT exemptions are also valid if a company buys a property to use it for one of the following reasons:

  • When the property will be used for property rental business
  • When the property is used for developers and traders
  • If the property is made available to members of the public
  • When financial institutions are acquiring property in the course of lending
  • When the property is occupied by employees
  • For farmhouses
Building Company Buying an Individual’s Home

When a building company buys a home from someone who, in turn, is buying a new home from them, the property 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

Sometimes, an employer may wish to buy an employee’s home. In this case, the employer or property trader will be eligible for a SDLT exemption under certain conditions. These will mostly depend on the employee’s living situation. The purchase will only be exempt from Stamp Duty Land Tax if the employee had to relocate for their job.

How to Claim SDLT Exemption?

Due to the various rules and changing requirements, it can be complicated to claim Stamp Duty exemptions. Consulting an experienced tax specialist will help you assess the possibilities for SDLT exemptions and relief prior to your property purchase.

If you’ve overpaid stamp duty tax for a property you already own, you could claim an SDLT refund . You may also be entitled to an SDLT return if there are outstanding stamp duty exemptions which were omitted during the purchase process.

CapEx Associates will carry out a comprehensive assessment of your purchases and provide advice via a qualified Chartered Tax Advisor. This will ensure your land and buildings transaction tax is being legitimately inspected. Contact us today to find out how our experts can help.

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Frequently Asked Questions

If you are buying a home that you will live in for the first time and the property is valued at under £300k then you may be eligible for Stamp Duty Land Tax Exemptions. If the property is valued at under £500k, you will only pay tax on the balance over £300k.
There are various other reasons you may also be eligible for SDLT exemptions. These include; when there is no payment involved in the property transfer, when you are named as a property owner in a will, or when a property is split or transferred as a result of divorce.

Under certain circumstances, companies that purchase property may be eligible for tax exemptions. These are often centred around the proposed use of the property.
For example, if the property is going to be accessible by the public, if the property is used by traders or when employees occupy the building. These are just a few potential circumstances under which your company may be eligible.

Claiming tax exemptions can be a long and time-consuming process. Due to various policy changes and constant rule amendment, it is highly recommended that you seek professional assistance. Contact CapEx Associates today and begin your SDLT exemption claim.