Tax and property

 

Stamp Duty Land Tax (SDLT)

SDLT on purchases of residential property is being reformed. Under the new rules, SDLT will be payable at each rate on the portion of the purchase price which falls within each band, rather than at a single rate on the whole transaction value.

The rates and thresholds are also being amended as part of the changes. The new rates of stamp duty are:

Purchase price of property (£)

New rates paid on the part of the property price within each tax band

0 - 125,000

0%

125,001 - 250,000

2%

250,001 - 925,000

5%

925,001 - 1,500,000

10%

1,500,001 and over

12%

 

The new rules are effective from 4 December 2014 but individuals who have already exchanged on a property will have a choice about whether to use the old or new rules.

In Scotland the new rates will apply until 1 April 2015, after which the Land and Buildings Transaction Tax will replace SDLT.

HM Revenue & Customs (HMRC) has developed an online calculator to help individuals calculate how much SDLT they will need to pay under the new system. The calculator can be viewed at: www.hmrc.gov.uk/tools/sdlt/land-and-property.htm

SDLT: treatment of shared ownership properties

The Government will extend the SDLT multiple dwellings relief to include superior interests in residential property, such as shared ownership. This will apply where the transaction is part of a lease and leaseback arrangement, if acquired from a qualifying body such as a housing association. The change will take effect from the date on which Finance Bill 2015 receives Royal Assent.

Annual Tax on Enveloped Dwellings (ATED)

The annual charges on the ATED will increase by 50% above inflation for residential properties worth more than £2 million for the chargeable period 1 April 2015 to 31 March 2016.

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