Stamp Duty Land Tax Changes

By Amy Cornelius

Stamp Duty Land Tax:   Important changes to timescales for filing returns

From 1 March 2019 the period of time to file a Stamp Duty Land Tax (“SDLT”) return, and pay any SDLT due, will reduce from 30 days to 14 days, from the effective date of the transaction.

The reduced filing window will apply to all transactions with an effective date on or after 1 March 2019.  Businesses and lawyers will need to ensure that internal processes are updated in line with this change to avoid late filings.

As a reminder, generally the “effective date” is the date of completion.  However, where a contract for the sale of land or (for example) an agreement for lease is “substantially performed” before completion, the effective date is the date of that substantial performance. Examples of substantial performance include where a purchaser takes possession of the property, or pays the majority of the consideration for the transaction, before completion.  HMRC’s objective with the reduced window is to improve efficiency in the SDLT system.

HMRC assert that there will be “no significant impact on business, charities or voluntary bodies as the majority of returns are already filed within 14 days of the transaction”.  However, SDLT remains a complicated tax and in time-pressured transactions it is now going to be even more important for all involved, to engage at an early stage with the approval of the large amount of information which still needs to be included on the return form.

However, HMRC are also now consulting on the proposed changes to the return form itself and, this week, have published draft legislation including the reduced number of questions. This would result in a helpful reduction in the amount of information supplied currently, particularly in relation to new leases granted and occupational leases to which a property is subject.

Should you have any queries in relation to anything contained in this article, please contact Amy Cornelius on 01604 609560 or by email: amy.cornelius@dfalaw.co.uk