SDLT holiday is over
A number of coronavirus support schemes came to an end in September, including the SDLT holiday. What does this mean for transactions which have not yet completed?
The SDLT holiday in England initially ran from 8 July 2020 to 31 March 2021, increasing the 0% band for residential properties from £125,000 to £500,000. It was then extended until 30 June 2021. However, rather than abruptly returning to £125,000, there was a tapering period from 1 July 2021 where the 0% band became £250,000. This ended on 30 September 2021. But what is the SDLT position if a buyer has exchanged contracts before 30 September, but completion doesn’t take place until later on?
The date that triggers the SDLT charge is the completion date, not the date of exchange (which is generally the most important date when looking at capital gains tax). This means that the 0% band is limited to £125,000. Of course, if the individual is a first time buyer, the 0% band is £300,000 and so this may take the sting out of the holiday ending to a certain degree. There is a similar relief in Scotland, though the enhanced 0% band is £175,000. Wales has no first time buyer relief, but the standard 0% is a more generous £180,000 in any case.
Related Topics
-
Practical guide: Tax-efficient will planning with residential property
An individual has a significant property portfolio which provides them with their sole source of income. They want to gift shares in some property to their daughter but retain the income. Can they do this without triggering the reservation of benefit rules?
-
Will HMRC treat late processed invoices as errors?
Your business processes invoices when they have been approved by budget holders, so some will be processed a month late, delaying your input tax claim. How might HMRC’s updated guidance help here?
-
Are redundancy payments tax deductible?
A seemingly simple question we’re often asked is how much tax relief a business is entitled to for redundancy payments. The answer is that it depends on the situation. How might the circumstances of a redundancy affect the tax deduction?