Anyone who is in the process of buying or selling a property will be well aware of the temporary increase to the SDLT thresholds which are due to reduce for sales after 30 June 2021.
Time is fast running out, and there will be those who will be scanning the legislation to see if they can keep the door open to the lower rates.
The legislation tantalisingly says that transactions that have been “substantially performed” before 30 June 2021 can still use the temporary rates even if they complete after the date.
However, what does this actually mean??
In the context of a purchase, HMRC say that a contract has been substantially performed when the buyer has either
- Taken occupation of the premises or
- Has paid a substantial part of the proceeds (taken to be 90%+)
It is difficult to think of many circumstances where a purchaser who has exchanged but not completed will be permitted to take occupation or would be able/willing to pay the proceeds in advance – however, there may be some transactions that can take advantage of this.
Unfortunately for everyone else, the only route may be to resort to pleading with the conveyancers and rest of the chain to simply get a move on……
The residential rates for SDLT applicable to purchases other than higher rates purchases can be summarised as below:
| Relevant consideration | Sales up to 30 June 2021 | Sales between 1 July 2021 – 30 Sept 2021 | Sales after 1 October 2021 | |
| So much as does not exceed £125,000 | 0% | 0% | 0% | |
| So much as exceeds £125,000 but does not exceed £250,000 | 0% | 0% | 2% | |
| So much as exceeds £250,000 but does not exceed £500,000 | 0% | 5% | 5% | |
| So much as exceeds £500,000 but does not exceed £925,000 | 5% | 5% | 5% | |
| So much as exceeds £925,000 but does not exceed £1,500,000 | 10% | 10% | 10% | |
| The remainder (if any) | 12% | 12% | 12% |
SDLT has become a hugely complex area with different rates for mixed-use properties, multiple dwellings, first-time buyers, second homeowners, partnerships and non-UK residents, to name a few!
However, BHP has a specialist tax team who can help you navigate the rules, please contact Zoe if you have any queries
