What Is Tax Relief?

In its essence, tax relief is any program or incentive, which reduces the amount of tax payable by an individual or business entity.

SDLT First Time Buyer Relief

The most popular form of Stamp Duty Land Tax relief is the SDLT first time buyer relief, which was introduced in 2017. The SDLT relief reduces the amount of tax paid on the property and it applies to residential property purchases after 22 November 2017 with a value of £500,000 or less. The property has to be intended as a main occupational residency for the buyer. Individuals may be eligible for SDLT reliefs if they are first time buyers or have purchased through approved shared ownership schemes. To claim the relief, an individual must complete an SDLT return, even if no tax is due. CapEx Associates can offer help with claiming SDLT relief for individuals and businesses alike.
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In light of Covid-19, the Government has introduced new temporary rules on Stamp Duty Land Tax 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.

To claim the relief an individual must complete an SDLT return, even if no tax is due. CapEx Associates can offer help with claiming SDLT relief for individuals as well as businesses.

SDLT Multiple Dwellings Relief

When you purchase more than one dwelling where a transaction or a number of linked transactions include freehold or leasehold interests in more than one dwelling, you can claim Multiple Dwellings Relief. The claim will have to meet certain criteria to be approved, and the minimum rate of tax under the relief is 1% of the amount paid for the dwellings.

The Stamp Duty relief is not applicable to the transfer of a freehold reversion or headlease where a dwelling has a lease of 21 years or more. The rate of tax charged for freehold reversions, headleases or any other non residential properties is set at the usual rate.

If the number of dwellings decreases within 3 years of the transaction, you may need to recalculate the tax and fill in another return.

SDLT Group Relief for Property Transfer Between Companies

Companies can claim SDLT relief within the same group that buys or sells property to or from each other. However, conditions apply to Group Relief SDLT. The buyer and seller will both need to be registered companies and be members of the same group at the effective date of the purchase.

SDLT Relief for Charities

Stamp Duty Land Tax relief may be claimed by charities that buy land and property for charitable purposes. The HMRC, however, can withdraw relief if the charity owning the property stops being a charity or stops using the property for charitable purposes within 3 years of purchase.

SDLT Relief for Compulsory Purchases

This is a specific Stamp Duty Land Tax relief for bodies with legal power to compulsorily buy land or property from individuals. Such bodies can still claim, even if the sale is not made under those powers, as long as the sale allows for development by a third party.

How to Claim SDLT Relief?

Stamp Duty reliefs and SDLT exemptions are subject to constantly changing rules and legislation. CapEx Associates will help you recognise and utilise the possibilities for SDLT relief prior to your property purchase.

If you’ve overpaid tax for a property you already own, our Chartered Tax Consultants can provide guidance on how to claim an SDLT refund . Contact our experts today!

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Frequently Asked Questions

1. First-time buyers are the most common eligible category
2. If you are purchasing multiple dwellings you may be entitled to multiple dwelling relief (MDR)
3. If you are transferring properties between companies
4. Charities buying land or buildings
5. If compulsory purchase orders have been issued

If you are entitled to multiple dwellings relief (MDR), you will be able to pay stamp duty land tax on the average cost of your properties, rather than on an individual basis.
To do this, you will need to work out the average cost of your properties and calculate the amount of tax payable on the average cost, before multiplying this amount by the number of dwellings purchased.