ATTENTION NON UK PURCHASERS OF DOMESTIC PROPERTIES
NEW STAMP DUTY SURCHARGE FROM 1ST APRIL
From 1st April 2021, all “non-UK residents” purchasing a residential property in England & Northern Ireland, will be subject to a 2% Stamp Duty Land Tax (SDLT) surcharge. This will not apply to property Scotland and Wales. The term “non-UK resident” is still being questioned by many.
In very basic terms, a person not a resident in the UK for purposes defined by Her Majesty’s Revenue & Customs (HMRC) or a person not treated as being a resident of the UK, will be calculated to pay an additional 2% in tax on certain residential property purchases/acquisitions.
This rule will only apply to residential property transactions and at this stage, not to commercial property. As such, this may leave scope for people to argue whether a property is a “dwelling” or “suitable for residential purposes” when purchasing a non-standard property. Similarly, questions may be raised on “mixed use” properties.
The rules around “non-UK resident” are complex and will depend on the actual purchaser. The 2% additional SDLT payment will apply to:
There are also exceptions to the rules where the individual is an employee of the Crown and is based outside of the UK as part their employment.
In circumstances where the purchaser becomes entitled to a refund of the 2% surcharge SDLT paid, they can apply to a refund within 2 years of the completion date of the transaction.
No doubt the above mentioned rules, will raise more questions and another layer of complexity to an already complex tax system with residential property transactions. As such, for those who do think they may be affected, should take separate tax advise at the time of considering purchasing/acquiring a residential property as well as instructing a Solicitor to deal with the transaction.
If you would like advice on these points, please contact Kathryn Frisby at Borneo Martell Turner Coulston Solicitors [email protected] 01604 622101