Partner Katja Wigham, head of our Commercial Property team, explains the the Stamp Duty Land Tax (Administration) (Amendment) Regulations 2018 and a reduction of the Stamp Duty Land Tax (SDLT) filing and payment window from 30 days to 14 days.
On 7 December 2018, the Stamp Duty Land Tax (Administration) (Amendment) Regulations 2018 were created to amend the current Stamp Duty Land Tax (Administration) Regulations 2003. The effect of these Regulations has led to the reduction of the SDLT filing and payment window from 30 days to 14 days from the “Effective Date” of the relevant transaction. Therefore, transactions with an “Effective Date” or which become notifiable, on or after 1 March 2019 will be subject to this change, resulting in considerably less time to submit SDLT Returns and pay any tax due to HMRC.
The current legislation stipulates SDLT Returns must be submitted and tax paid to HMRC within 30 days of the “Effective Date” of the transaction, otherwise you will be required to pay a standard £100 penalty and/or interest accrued on a daily basis. The standard penalty may increase if there is any further delay. In addition, HMRC has the power to impose additional levies/penalties of up to 100% of the tax where the tax payer fails to take proper care in preparing the SDLT Return, conceals information or fails to make relevant disclosures. In order to avoid this, it is therefore imperative SDLT Returns and any tax due are paid on time.
Even if no tax is due, a SDLT Return is still required in the following circumstances:-
- Purchase of a property or land at a purchase price of £40,000 or more
- Grant, assignment or surrender of a lease for a term of 7 years or more, where the premium is £40,000 or more and the annual rent is £1,000 or more
If you are considering buying or leasing a property or land it is worth making a note of this change and ensuring your conveyancer/lawyer provides you with a SDLT Return and details of any tax due prior to completion or as soon as possible once completion has taken place, to ensure you are not caught out by this reduced timescale and become liable for any penalties levied. You can also help by making prompt payment when requested.
For further information or legal advice, please contact law@blandy.co.uk or call 0118 951 6800.
This article is intended for the use of clients and other interested parties. The information contained in it is believed to be correct at the date of publication, but it is necessarily of a brief and general nature and should not be relied upon as a substitute for specific professional advice.
