Non-resident SDLT surcharge for residential property

Produced by Tolley in association with

Corporation Tax

Guidance

A 2% SDLT surcharge applies to land transactions of residential property in England and Northern Ireland by non-residents. The rates apply to purchases of freehold and leasehold property and to SDLT payable in respect of rents on the grant of a new lease (though only where the term of the lease is over seven years).

The surcharge applies in addition to various other rates, including the residential higher rates (sometimes referred to as the ‘additional dwelling supplement’) and the flat 15% rate for non-natural persons.

The existing residence rules for other taxes do not apply for SDLT. Instead, separate residence tests apply for SDLT, as discussed below. It is important to look at the detail of the test, as sometimes the outcome is counter intuitive. For example, a UK resident close company is considered non-resident for SDLT if it is controlled by one or more non-residents.

It is important to remember that if the transaction is eligible for an SDLT

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Sean Randall

Partner at Blick Rothenberg , Corporate Tax

20 years’ “Big Four” stamp duty experience, including building and running KPMG’s UK stamp duty team for five years Chair of the professional body for stamp duty advisers, the Stamp Taxes Practitioners Group (over 200 members) Editor and author of Sergeant and Sims on Stamp Taxes since 2008 Former Tax Writer of the Year Author of the Law Society’s SDLT Handbook: A Guide for Residential Conveyancers Fellow of the Chartered Institute of Taxation Barrister (non-practising) Listed in Spear’s 500

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