Legal background
- The legislation relating to Stamp Duty Land Tax is set out in Part 4 of the Finance Act 2003 and came into force on 1 December 2003.
- 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 England and Northern Ireland. The purchaser (that is, the person acquiring the interest) is liable to pay the tax.
- SDLT is charged on the "chargeable consideration" for the transaction (which is usually the purchase price for the property). Where transactions are "linked" for SDLT purposes (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) tax is charged on the aggregate consideration for the transactions.
- There are separate tables of rates for acquisitions of residential and non-residential property (which includes mixed residential and non-residential property), and residential property subject to the `higher rates`.
- Where payment for property takes the form of rent and a separate SDLT charge applies on the grant of a new lease, a further table taxes the net present value (NPV) of the rent payable over the term of the lease.
- 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.
