Updated from 23rd September Growth Plan Chancellor of the Exchequer, Kwasi Kwarteng There have been several changes to UK Stamp Duty. These changes came about because of the Growth Plan and Kwasi Kwarteng on 23rd September 2022. One of the changes to tax made by Kwasi Kwarteng was Stamp Duty. These changes were announced in the mini-budget. Kwasi Kwarteng’s idea is to stimulate the housing market and the economy at large. Stamp Duty was changed from 23rd September 2022 and was effective as of that date. 0% Stamp Duty rate for property under £125,000 was increased to £250,000. All other rates apply as normal. Please note that there was no change to the 3% SDLT surcharge for any residential property purchased over £40,000. There was no change to the 2% foreign surcharge either. First-time buyers also benefitted from Kwasi Kwarteng mini budget announcement. First-time buyers Stamp Duty also increased. Use our Stamp Duty tax calculator to check how much you need to pay. 0% Stamp Duty rate for first-time buyers increased from £300,000 to £425,000 SDLT Return when purchasing a buy-to-let An SDLT Return when buying a buy-to-let are mandatory. A Stamp Duty (SDLT1) is submitted to HMRC on behalf of the Government. The form must be submitted within 14 days of a property or home purchase in the UK. Depending on the size of the buy-to-let purchased, there are different rates to pay to the government. It can be completed by paper or online and is usually conducted for the buyer by a conveyancer or solicitor. What are the basics of a Stamp Duty submission? Any purchase of property, buildings or land in England and Northern Ireland is chargeable to Stamp Duty Land Tax (SDLT) rates in the UK by the Government. This is documented and submitted to HMRC on the SDLT1 return. This tax is payable irrespective of whether the buyer is a UK resident. The buyer must file and notify HMRC of the transaction. Different rates are applicable. SDLT Return when buying a buy-to-let are mandatory. An SDLT1 return submission can be filed online or by paper. SDLT (often referred to as Stamp Duty) is a form (return) of Government taxation that applies to freehold or leasehold. The purchaser/recipient of the property must pay the correct stamp duty to the Government within 14 days of completing the purchase. Even if no stamp duty payment is due, the SDLT Return usually must be submitted at the correct rates. A late submission can incur penalties at increasing rates that HMRC collects on behalf of the Government. The current SDLT rates in the UK are: – between £250,001 and £925,000 5% – between £925,001 and £1.5 million 10% – over £1.5 million 12% You must pay an additional 3% Stamp Duty on top of the SDLT value if you purchase a residential property whilst you already own another. This is also included on the SDLT return when submitted to HMRC This additional 3% surcharge rate does not apply if you buy a residential home to replace your primary residence. How do I file a Stamp Duty form? When you buy a property or land, you must fill in a Land Transaction Return (SDLT1) and send it to HMRC. Your conveyancer/solicitor will usually complete this for you. You cannot use the online service if you’re an individual buying property and aren’t represented by a UK solicitor, agent or legal conveyancer. Do I need to submit a Stamp Duty return form? You can give property or land away or transfer ownership to another person. If there is no ‘chargeable consideration’ you do not have to pay SDLT rates or file an SDLT1 Return to HMRC. The chargeable consideration is a payment that can be cash or another type of payment, including goods. The following are the main types of transactions that require reporting to HMRC: – the acquisition of a freehold if the chargeable consideration is £40,000 or more – the grant of a lease for a term of 7 years or more where the premium is £40,000 or more – the assignment or surrender of a lease which, when originally granted, was for 7 years or more and the chargeable consideration is £40,000 or more – the assignment or surrender of a lease which, when originally granted, was for less than seven years and the assignment or surrender gives rise to actual SDLT liability, or relief is claimed It is worth reviewing Stamp Duty legislation from the Government and taking advice on the right rates. Who is responsible for an SDLT1 Return? The purchaser is responsible for making an SDLT Return and paying the Stamp Duty to the Government at the correct rates. Read the Government guidance on and how to file. What transactions are exempt from an SDLT1 form submissions? Some transactions are exempt from an SDLT1 Return in the UK. This means no Stamp Duty tax is due. It is worth taking advice on Stamp Duty to ensure you are not paying SDLT unless you have to and at the correct rates. The significant transactions which do not require the filing: – a transaction where there is no chargeable consideration or nil consideration – certain transactions between spouses, or civil partners, in connection with divorce, dissolution or separation – certain leases granted by registered social landlords – certain assents or appropriations by personal representatives – certain variations of testamentary or intestacy provisions It is also worth reading up on how to reduce Stamp Duty for property developers in the UK to ensure you are paying the right amount at the correct rates. Are there penalties for late filing of an Stamp Duty Return? Failure to send an SDLT1 Return by the due date will result in an immediate penalty of £100. If this failure continues beyond six months, a further penalty of 5% of the Stamp Duty (or £300 if greater) is also due to the Government. If the failure continues for 12 months, a further penalty of 5% of the Stamp Duty tax due (or £300 if greater) may also be payable to the Government.