Calculating SDLT

The party liable to SDLT is the buyer, not the seller. The buyer is also required to file any SDLT returns due.

is not simple and there is no margin for error. You should use HMRC's SDLT calculator (https://www.tax.service.gov.uk/calculate-stamp-duty-land-tax/#/intro) to calculate the SDLT chargeable in respect of any property transaction. However, other than for relatively straightforward property transactions, the online calculator may need to be supplemented by appropriate tax advice to confirm the basis for calculating the SDLT. Cases where this is generally so include the following:

• Where the property is entirely residential or there is uncertainty on the point.
• Where an SDLT relief may be available (e.g. on transfers between group companies).
• Where one transaction is linked with another.
• In the case of a dwelling, where the property is not the buyer's first/only home or the purchaser is not an individual (in which case, a 3% SDLT surcharge will generally apply).
• Transactions involving partnerships or trusts (including nominee arrangements).
• Pre-completion transactions (including sub-sales).
• Exchanges (which may include surrender and regrant and sale and leaseback),where market value consideration may be imputed, and VAT may be chargeable (on both limbs, as on a barter transaction), creating further chargeable consideration even if no cash is changing hands, unless relief is available).
• Lease extensions and holding over.
• Where the consideration payable is uncertain or unascertainable at the date of purchase, e.g. where overage or contingent consideration may be payable (when an SDLT deferral application may be, or, in the case of a lease, where turnover rents apply or there is a rent review within the first five years of the term of the lease).
• Where a tenant is assigning a lease to your client (as your client may be liable for the SDLT on the lease if it has not been paid in whole, e.g. because relief (such as group relief) was claimed in relation to the grant of the lease or the consideration for the grant of the lease or the first five years' rental is uncertain at the time of the assignment).
• With effect from April 2021, where the buyer is non-UK resident (and so liable to a 2% SDLT surcharge in addition to any 5% SDLT surcharge, as described above).
• Where the property is in Wales (in which case, as explained below, Land Transaction Tax rather than SDLT is chargeable).

In addition:

• Where you are dealing with residential property, the purchasing entity is a company, a partnership which includes a corporate partner or a collective investment scheme and the consideration for the property is greater than £500k, SDLT is chargeable at the rate of 17% (19% from 31 October 2024 in the case of a non-UK purchaser) on the full amount of the consideration, unless a relief is available).
• In the case of the transfer, assignment or grant to a company connected with the seller, market value may be imputed as the chargeable consideration if the actual consideration is less.
• With effect from 1 June 2024, multiple dwellings relief is generally no longer available in England where more than one dwelling is acquired under a transaction or a number of linked transactions, unless contracts were exchanged on or before 6 March 2024 and certain other conditions are satisfied. However, this relief is still generally available in relation to the acquisition of dwellings in Wales.
• If six or more dwellings are acquired or the properties acquired include non-residential property, the non-residential SDLT rates may, alternatively, apply.
• Where there is a lease surrender and regrant, overlap relief may be available to reduce the SDLT chargeable on the new lease so that SDLT is not paid twice, i.e. in respect of the period common to the original term of the surrendered lease and the term of the new lease.
• Where market value is imputed, this will need to be shown as the consideration in the SDLT return even if relief is available.
• SDLT returns may be required to be filed even where SDLT is not chargeable.
• If you are acting for a purchaser on a transaction where you are advising on the SDLT, but, on the Effective Date, the consideration payable is uncertain, you should make it clear in the engagement letter that your responsibility is in relation to the SDLT obligations arising from the facts as known as at the Effective Date and completion (if later), and that you are not responsible for advising in relation to any SDLT or further SDLT which becomes due when the uncertain consideration (or any part of it) is subsequently determined or in relation to any return or further return which is required to be submitted as a result, and that the onus is on the client to alert and instruct you if it wishes you to act in relation to any SDLT obligations arising as a result of such further determination.

You are well advised to seek advice from our tax colleague, Michael Fluss, when it is not 100% clear to you what SDLT will be payable or whether reliefs or alternative rates of SDLT may apply. It is a good idea to have a tax colleague added to your file when you set the matter up. This will give you the option of taking tax advice quickly and seamlessly and will generally reflect well on you and the firm. This can be complex, so do not leave this to shortly before completion. Rather, address it as early as possible (especially given the reduction of the SDLT filing and payment window in most cases from 30 days to 14 days).

Where you want to know if there is an issue on SDLT, then you should allow £500 for a tax check. This service simply gives you the all-clear or, where that is not possible, highlights the possible issues. This service is offered by our tax colleague. As costs are very tight here, you should ensure to include all relevant details and documents with your initial email of enquiry. Chasing for the right documents is not part of the capped fee. Please email Michael Fluss in the first instance so he can consider the matter properly and mark the email as urgent if necessary. If there are complexities, a discussion on fees may be needed.

If you decide not to take internal tax advice, then you should be at pains not to be advising the client on any tax matters at all. The SDLT return should be the client's return, approved by them and, where possible, submitted by them - or where not possible, submitted by you on an execution-only basis. You should make this very clear in writing in terms that by not taking tax advice the calculation may not be accurate and potential reliefs may be lost in order to defeat any later claim for failure to advise on tax matters. Please use the template letters that can be found in Tools - Stationery and Templates on Keyed-In.