Q:

What is stamp duty land tax?

A:

Quick Answer

Stamp duty land tax, or SLDT, replaced stamp duty in the UK and took effect on Dec. 1, 2003. Land and building transactions in the UK require payment of SLDT.

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Full Answer

When SLDT was applied in 2003, it resulted in higher charges on leases of rents, according to the Financial Times. SLDT on a residential purchase worth more than £2m increased from 5 per cent to 7 per cent. Effective March 14, 2014, a residential property acquired by a non-natural person, such as a company, has pertinent SLDT charge of 20 percent from the former stamp duty of 15 percent on the consideration that the property amounts to at least £500,000.

Other than SLDT, such property is also rated with the Annual Tax on enveloped dwellings, according to Out-Law. UK shares transfers, irrespective of value, are levied at 0.5 per cent of the price. Electronic share dealings taxed at the same 0.5 percent of the property amount is instead charged with a Stamp Duty Reserve Tax and not stamp duty. However, the Financial Times reports that a provision taking effect on April 28, 2014 abolished both stamp duty and Stamp Duty Reserve tax on quoted shares transacted in legitimate growth markets, including the ISDX Growth Market and the Alternative Investment Market. Over 1,000 quoted businesses in the UK stand to benefit from this alteration.

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Related Questions

  • Q:

    Do I have to pay stamp duty on my property?

    A:

    Stamp Duty Land Tax, or SDLT, is charged on all property bought in the United Kingdom, including houses, flats, other buildings and land. However, the SDLT rate is zero percent until the price of the property is higher than ?125,000, notes GOV.UK.

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  • Q:

    Do you pay stamp duty when you sell a property?

    A:

    Stamp duty land tax is paid by the buyer of a property on a transaction of more than 125,000 British pounds. The stamp duty tax charged is typically between 1 percent and 7 percent of the entire purchase price.

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  • Q:

    What are the stamp duty thresholds?

    A:

    The threshold on stamp duty land tax varies depending on the property and value of the transaction. For residential transactions up to 125,000 GBP, the stamp duty tax is zero, as of 2014. Residential transactions between 125,001 and 250,000 GBP have a stamp duty tax of 1 percent.

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  • Q:

    When is Stamp Duty payable?

    A:

    As of June 2014, Stamp Duty is payable either at the time of purchase or within 30 days of document execution, according to HM Revenue & Customs. If the Stamp Duty is not paid within 30 days, additional penalties and interest may be applicable.

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