The government has launched a consultation on plans to introduce a Stamp Duty Land tax (SDLT) surcharge for non-residents buying residential UK land and property.

As announced at Budget 2018, it is proposed that a 1% SDLT surcharge will apply to all freehold and leasehold purchases of residential land and property in England and Northern Ireland by non-UK residents. The date from which this new measure will take effect has yet to be determined.

The surcharge is a response to evidence that purchases of property by non-UK residents is pushing up house prices for UK residents and follows the introduction of non-resident CGT for residential property in 2015.

It is proposed that it will:

The government has decided not to use the Statutory Residence test to determine individual residency for the purposes of the surcharge, and have instead proposed a separate, less complex, test:

  • Individuals will be non-UK resident if they spent fewer than 183 days in the UK (not just England and NI) in the 12 months ending with the date the transaction occurs.
    • Where an individual subject to the surcharge spends 183 days or more in the UK in the 12 months following the effective date of the transaction, they will be eligible for a refund.
  • Companies will be resident in the UK if they are incorporated in the UK, or their central management and control is in the UK, at the time they acquire the residential property.
  • Trusts will be subject to the existing trust residency rules.

There will be special rules for joint purchasers and partnerships. There will be no new refunds or reliefs for companies, partnerships or trusts.

List of consultation questions

Q1: Do you have any views on the proposed SDLT residence test for non-UK resident individuals?

Q2: Would you prefer to see a different residence test applied? If so, what test and why?

Q3: How will the proposed surcharge on residential properties affect purchase decisions of non-UK resident individuals in England and Northern Ireland?

Q4: Do you agree that a rate of 1% for the surcharge strikes the right balance between the government’s objectives on home ownership and the UK remaining an open and dynamic economy?

Q5: Do you have any views on the proposed company residence test for the surcharge?

Q6: Would you prefer to see a different residence test applied? If so, what test and why?

Q7: Do you have any views on non-UK resident individuals using UK resident companies to purchase residential properties?

Q8: Do you have any views on the suitability of using the close company test as the basis for determining whether a company is under the control of non-UK resident persons?

Q9: Do you have any views on applying the attribution of rights rules at section 451 CTA 2010 between persons of differing residence status?

Q10: Do you have any views on potential problems which might arise when using the definition of control at section 450 CTA 2010?

Q11: Do you have any views on whether any of the exemptions at S442 to S447 CTA 2010 should remain in place or be removed for the purposes of the surcharge?

Q12: Would you prefer to see a different test applied? If so, what test and why?

Q13: Do you have any comments on the proposed treatment of partnerships as joint purchasers?

Q14: Do you think there should be different test applied for purchases by partnerships? If so, what test and why?

Q 15: Do you have any views on the proposed SDLT treatment where the acquisition is made by a trust?

Q 16: Do you agree that the Statutory Residence Test for individual trustees will work for SDLT if references to tax year are replaced by references to the 12month period ending with the date of the transaction? If not, why not? What alternatives would you propose?

Q17: How will the proposed surcharge on residential properties affect purchase decisions of non-UK resident non-natural persons (companies, trusts and partnerships) in England and Northern Ireland?

Q18: Do you have any comments about the proposed reliefs from the surcharge?

Q19: Are there any other categories of individual which you think the Government should consider providing a relief for and, if so, why?

Q20: Do you have any views on the proposed refunds available for those who have paid the surcharge?

Q21: Do you have any views on the criteria the government is suggesting determining whether a purchaser would be eligible for a refund?

Q22: Do you have any views about how the reliefs will apply in relation to the surcharge?

Q23: Do you have any views on the proposed treatment where there is an interaction between existing SDLT rules and the surcharge?

Q24: Do you have any views on the proposed approach for administration and compliance for the surcharge above?

Q25: Are there any other changes to the administrative and compliance provisions in SDLT that the government should consider changing for the purposes of the surcharge?

The deadline for responding to the consultation is 6 May 2019. Response should be sent to: This email address is being protected from spambots. You need JavaScript enabled to view it.

Links to our useful guides:

SDLT: What is residential property

SDLT: Residential property (dwellings): higher rate

Non-resident CGT: UK residential property

Non-residents tax toolkit

Permanent establishment and residence

External link:

Stamp Duty Land Tax: non-UK resident surcharge consultation

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