Stamp Duty Tax
on the Transfer of Property

The Stamp Duty Land Tax (SDLT) replaced the Stamp Duty Tax in December of 2003. It is a tax on the documents that transfer ownership of a property.

When you buy a property, you may have to pay SDLT. But guess what? If you purchase the property for less than £120,000, or buy it in an area that is exempt from the stamp duty (known as a 'disadvantaged area'), no stamp duty tax is due if the property is valued up to £150,000. Unfortunately, not all solicitors are aware of this.

Always make sure you check with HM Revenues and Customs to find out whether the property you are buying is exempt from the stamp duty tax.

The Stamp Duty Loophole Is Closed

Did you know that not so long ago, Inland Revenue closed a stamp duty loophole?

It was only a matter of time before Inland Revenue closed this loophole, since so many people had been using it. The loophole was that home-owners and property investors would pay excess for a home’s fixtures and fittings. This was done to lower the house’s purchase price so that the stamp duty could be dramatically reduced.

I’ll show you an example:

Inland Revenue’s Avoidance Measures

Alas, things changed in December of 2003. Homebuyers now have to complete an SDLT form and send it to the Inland Revenue within a certain timeframe.

This form gives details about the property and other matters. It lets Inland Revenue know how much was paid for the property and its fixtures and fittings.

This means that Inland Revenue now scrutinizes all transactions with values around the stamp duty thresholds. They can investigate the sale for up to nine months after the deal has been completed. This means you might end up with an unexpected stamp duty tax bill.

• Stamp Duty Land Tax Manual (opens new window)

Return from Stamp Duty Tax to Property Tax

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