We have been celebrating this festive time of year with a Christmas Selection Box of different tax reliefs and exemptions. Like all good things this must now come to an end. We hope that our "Box" have saved you pounds rather than adding them!

S is for Stamp Duty.. and other similar taxes.

Stamp duty on shares and stamp duty land tax (SDLT) on land and buildings ("stamp duties") are often forgotten when considering wider transactions.

  • The market value rule applies to stamp duties when there is a transfer to a connected party.
  • Stamp duties apply to consideration; if there is no consideration because the asset is transfered as a gift there is no duty. 
  • On a transfer of a sole trade or partnership business to your own company (incorporation) is a transfer at a market value transaction and not a gift so tax is due unless the value is below the threshold.
  • Stamp duties are payable by the purchaser/acquirer within 30 days of the transaction.
  • Higher rates of SDLT apply to residential property compared to non-residential.
  • There is a 3% surcharge on second (and more) residential properties unless you are replacing your main residence.
  • First time home buyers benefit from preferential rates.
  • SDLT does not apply to Scottish and Welsh properties, they have their own versions, Land and Buildings Transaction Tax (LBTT) and land transaction tax (LTT). The rates are slightly different.

ATED

  • The Annual Tax on Enveloped Dwellings (ATED) is an annual charge on UK dwellings held by a non-natural person (e.g. a company).
  • ATED applies unless a relief is claimed. It is most commonly payable when residential property is let uncommercially or to a connected party. It does not apply to individuals or trustees.
  • ATED is payable annually in advance by 30 April and is based on the taxable value of the property.
  • For 2017/18, ATED is due if the value of the property at 1 April 2012, or cost if acquired after 1 April 2012, exceeds £500,000.
  • For 2018/19 to 2022/23, the property value as at 1 April 2017 must be used unless it was acquired after 1 April 2017.

Whilst there are reliefs from stamp duties for many types of transactions the rules are extremely strict and the anti-avoidance legislation is very wide ranging.

You really need to make a list and check it twice and even then "You'd better watch out.." for stamp duty traps!

Our selection box is now complete!

C - H - R - I - S -T - M  - A - S

Links to our subscriber resources:

SDLT: Residential property (dwellings): higher rate

SDLT: Annexes and multiple dwelling relief

SDLT: what is residential property?

Annual Tax on Enveloped Dwellings (ATED)

At a glance

Stamp Duty Land Tax (SDLT) rates and allowances

SDLT: Residential property higher rate

SDLT: Scottish and Welsh variations (LTT)

Annual Tax on Enveloped Dwellings (ATED)

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