Background Stamp Duty Land Tax Legislation
4.The legislation relating to Stamp Duty Land Tax is set out in Part 4 of Finance Act 2003 and came into force on 1 December 2003.
5.Stamp Duty Land Tax (SDLT) is a transaction tax which applies to acquisitions of an interest (usually a freehold or a leasehold interest) in land in the United Kingdom. The purchaser (that is, the person acquiring the interest) is liable to pay the tax.
6.SDLT is charged at a rate which corresponds with a percentage of the “chargeable consideration” for the transaction (which is usually the purchase price for the property). Where transactions are “linked” for SDLT purpose (that is, where they form part of a scheme, arrangement or series of transactions between the same vendor and purchaser or persons connected with them) then the rate of tax is that which applies to the aggregate consideration for the transactions.
7.There are separate tables of rates for acquisitions of residential and non-residential property (which includes mixed residential and non-residential property).
8.An alternative 15% higher rate charge applies to certain acquisitions of dwellings for more than £500,000 by a company, a partnership including a company or a collective investment scheme.
9.A separate SDLT charge applies on the grant of a new lease, on the net present value (NPV) of the rent payable over the term of the lease. This is charged at 1% of the excess of NPV over £125,000 (residential property) or £150,000 (non-residential property).