Residential SDLT for Conveyancers - An Advanced Guide with Paul Clark

Introduction

There are at least fourteen possible rates of SDLT payable on a residential purchase, from complete exemption to 17%. HRAD also has to be considered, the 3% surcharge on additional dwellings; NRS, the 2% extra payable by non-residents (who may be UK citizens temporarily living abroad, or Channel Island trusts); MDR (multiple dwellings relief); FTBR (first-time buyer relief); the differing rates payable by human and non-human buyers; and combinations of all these.

In addition, a non-UK resident buying a new flat will almost always have to pay SDLT on the ground rent, however modest.

Conveyancers are not tax experts, but they are statutorily defined as ‘tax agents’ because they produce documents that are “likely to be relied on by HRMC to determine a client’s tax position”. SDLT liabilities need to be understood at the start of a transaction (as CQS core-practice-management standards require) since the structure of a transaction can alter the SDLT payable.

This advanced course assumes that you already know about the basic SDLT principles covered in the MBL SDLT Foundations course, such as: identifying land transactions; contract and conveyance; subsales; linked transactions; exchanges; chargeable consideration; exempt transactions; common reliefs; and land transaction returns.

What You Will Learn

This course will cover the following:

• Definitions
• Guidance and case law on ‘Residential property’, ‘Dwelling’ and ‘Grounds’
• Problems with mixed-use (where the law may change soon)
• Chargeable Consideration and Reliefs
• Assumption of debt as consideration - transfers of equity
• The interplay between site purchase and construction contracts
• Multiple dwellings relief - more complicated than HMRC guidance suggests (and where the law is likely to change soon)
• First-time buyer relief - ought to be called ‘first-time owner relief’
• Other reliefs, including those on part-exchanges
• Higher Rates and surcharges
• Companies buying dwellings pay either 15% or 3% HRAD (increased to 17% or 5% HRAD if the company is non-resident)
• The complex and anomalous HRAD rules and exemptions, including some helpful flowcharts
• Multiple dwellings and HRAD - even more anomalies
• NRS (non-resident surcharge). Who is non-resident and when is the 2% surcharge imposed?
• Shared Ownership Leases