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NOTES ON STAMP DUTY LAND TAX (SDLT):

Stephen Wegg-Prosser

1. SDLT is a new tax effective from December 1st 2003 to replace Stamp Duty and is chargeable on all transactions for Sale of Land.

2. In theory the Tax Return SDLT 1 is to be completed by The Client (the Tax Payer) who MUST SIGN a Declaration like any other Tax return. In practice we as Solicitors must complete most of it. WHY? Because we are answerable to Mortgage Lenders and we have a duty to ensure Registration of Title and cannot be left with a situation where the Return is not completed, the Tax not paid, the Tax Paid Certificate is not returned by the Revenue and we cannot register your title and the Mortgage.

3. Here are some practical points about completion of the return.

• The boxes must be completed in black ink in capital letters.
• If a box doesn’t apply leave it blank. Do not strike through or put N/A.
• Do not write outside the boxes – there is no ‘white space’.
• A separate return must be completed in respect of each separate transaction


 

IN THE FORM WE (OR THE CLIENT) NEED TO COMPLETE THE FOLLOWING INFORMATION

• About the transaction
· Box 2 – Description of transaction
This is identified by a series of Codes which we will complete.
· Box 4 – Effective Date
Almost certainly The Date of Completion as shown on the TR1

• About the tax calculation
Box 9 – Tax Relief ???
Not much used by us mainly the Designated Disadvantaged Area Relief
Box 10 – What is the total consideration?
For a straightforward property purchase, just the full purchase price. .
Box 12 – What form does the consideration take?
Normally cash.
Box 13 – Is this transaction linked to any other(s)?
Usually NOT
Total amount of tax due?
The rates of tax are just as they were for stamp duty i.e. 0% (-£60K), 1% (£60K-£250K), 3% (£250K-£500K) or 4% (£500K+).

• About New Leases
THIS IS COMPLEX AND WE WILL COMPLETE WHEN REQUIRED
· Box 31 – NLPG UPRN
This is the National Land and Property Gazette Unique Property Reference Number. Please enter it if you know it, IGNORE BOX if you do not
· Box 33 – Is a plan attached?
No plan is needed where there is a full address for the property.

• About the Purchaser
· Purchaser (1) will not be responsible for anything more than any other purchasers It simply means the first named purchaser on the transfer document.
· Box 50 – National Insurance Number, if you have one.
This is now required. Only the Client will have this. If the purchaser is employed the number can be found on the latest payslip. The Revenue realise that not everyone will have one.
· Box 59 – “I authorise my agent to handle correspondence on my behalf”
In almost all cases this Box will be completed. The return has to be signed by ALL CLIENTS but Solicitors acting on their behalf will complete most of the return and will deal with queries and will receive the Certificate of Payment SO THE CLIENT MUST SIGN the completed return. As Purchasers and Lenders will want and expect Solicitors to deal with issues arising from the Return, without the Agent Authority Box completed the Revenue cannot send copies of correspondence to Solicitors
· Box 71 – Declaration
As stated above, the return must be signed by the purchasers.

PAYSLIP
N.B.1 We will lodge the return with the Revenue
N.B.2 We must have a completed SDLT1 by the Completion Date. We must send it to the Revenue within 30 days, must get the certificate back and lodge the Revenue Certificate with the TR1 within the H.M.L.R priority period. The best idea seems to be to get the SDLT1 completed with the Mortgage Deed and keep the two together ready for completion.
N.B.3 Each SDLT1 Form is UNIQUE as it carries a Tax Code Number attributable to ONLY A SINGLE TRANSACTION. We must use ORIGINALS . COPIES CANNOT BE USED.





 

 

  
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