The Stamp Duty Land Tax Handbook

Tony Johnson, Chris Hart

• Publisher: Estates Gazette
• Year: 2014
• ISBN:
  9781135333973
• Edition: 2
• Topic: Droit
• Subtopic: Droit des biens

Written from a practical standpoint, this new edition of the Stamp Duty Land Tax Handbook details how the updated legislation works in common practice. The book's examples and case studies will be highly useful to surveyors, valuers and anyone needs to be kept up to date with the application of tax duty on Land. Unlike most other books in this area, the Handbook is based on practical experience of the work of surveyors applying the latest legislation in making valuations. The authors explain the potential pitfalls and use examples of calculations of the amounts on which tax is payable. Complex areas like administration and enforcement are clarified and explained. The Handbook will help surveyors and property professionals provide crucial support to their invididual and corporate clients.

1

Liability to Stamp Duty Land Tax

A.	Introduction
1.1	Stamp duty land tax (SDLT) was introduced by the Finance Act 2003 (FA 2003) and took effect from 1 December 2003 in respect of land transactions, replacing the long established stamp duty. Significant changes to the tax scheme have been made by every Finance Act since, and are incorporated in this book, as are regulatory changes, and further changes made by the Finance Act 2008.
1.2	Unlike stamp duty, which was a tax on documents, SDLT is a tax on transactions. So, if a property is sold or let without any documents recording the transaction, SDLT will, none the less, be payable.
B.	Events leading to a charge
i.	Land transactions
1.3	SDLT is charged on land transactions. A land transaction is “any acquisition of a chargeable interest” (s 43 of FA 2003).
ii.	Chargeable interest
1.4	A chargeable interest means “an estate, interest, right or power in or over land in the United Kingdom” (s 48(l)(a) of FA 2003). It therefore includes freehold and leasehold interests (and their equivalent in Scotland). It also includes the benefit of an obligation, restriction or condition affecting the value of any such estate, interest, right or power (s 48(1) of FA 2003).
1.5	Her Majesty’s Revenue and Customs’ (HMRC), Stamp Duty Land Tax Manual states; chargeable interests in England and Wales and Northern Ireland include:
	•	A freehold estate (sometimes referred to as an estate in fee simple).
	•	A leasehold estate (sometimes referred to as a term of years).
	•	An undivided share in land.
	•	A right in or over land, such as an easement or profit a prendre.
	•	A rent charge.
	•	In Northern Ireland, a ground rent or fee farm rent.
	•	The right to receive rent (IRC v John Lewis Properties Ltd [2001] STC 1118).
	•	The benefit of a restrictive covenant. The benefit of a positive covenant.
	•	An equitable interest in land, such as a life interest, an interest in reversion or remainder.
	•	An executor or trustee’s power of appointment (the only likely example in practice of a power over land).
	Chargeable interests in Scotland include:
	•	Ownership of land.
	•	Any other heritable right in or over land.
	•	The tenants interest under a lease of land.
	•	A servitude.
	•	A life rent.
1.6	However, some interests, set out below, are exempt from this definition.
a.	Security interest
	These are interests held to secure the payment of money or the performance of an obligation. A typical example is a mortgage.
b.	Licences
	These are licences to use or occupy land.
c.	Tenancies at will
	These exist in the United Kingdom apart from Scotland, as do the following examples. As they are terminable without notice, they are little different from licences.
d.	Advowson
	This is the right of presentation to a beneficiary.
e.	Franchises
	These are grants by the Crown, such as the right to hold a market or fair, or to take tolls.
f.	Manors
	There are three elements to a manor:
	1.	Lordship of the manor. The owner may style himself lord of the manor (of, say, Keswick).
	2.	Manorial land. As a manor was a defined area it may include land.
	3.	Manorial rights. Sometimes rights are retained by the lord on disposal of part of the manor, for example, hunting, fishing or shooting rights.
	Prior to the Land Registration Act 2002 (LRA 2002), these rights could be registered. Since that date there can be no application for a first registration. However, dealings with an already registered title are subject to compulsory registration, eg the granting of a lease. Under LRA 2002, manorial rights are categorised as overriding interests. These rights will lose their overriding status after 12 October 2013 under s 117 of LRA 2002.
1.7	A chargeable interest also includes “the benefit of an obligation, restriction or condition affecting the value of any such estate, interest, right or power” (s 48(l)(b) of FA 2003). Typical examples are easements and restrictive covenants. Hence the surrender of the benefits for consideration would be a land transaction attracting SDLT.
g.	Partnerships
1.8	There are now a number of events where transactions involving partnerships are not treated as land transactions. Due to the comprehensive changes to the partnership regime these are dealt with in Chapter 9.
iii.	Transaction by contract and c...

Table of contents

• Cover
• Title Page
• Copyright Page
• Table of Contents
• Preface
• Table of Cases
• Table of Statutes
• Definitions
• 1. Liability to Stamp Duty Land Tax
• 2. Residential Property and Non-Residential Property
• 3. Designated Disadvantaged Areas
• 4. Tax Payable on Purchase
• 5. Tax Payable or Repayable after Purchase
• 6. Tax Payable on Start of Lease
• 7. Tax Payable or Repayable During a Tenancy
• 8. Interaction with VAT
• 9. Partnerships
• 10. Market Value
• 11. Requirement for Land Transaction Return
• 12. Deferment of Payment of Tax
• 13. Administration of Stamp Duty Land Tax
• 14. HMRC Powers and Compliance
• 15. Appeals, Relief for Overpayment, Claims not Included in LTRs
• 16. Connected Persons and Companies
• 17. Right to Buy Transactions, Shared Ownership Leases, Alternative Property Finance, etc
• 18. Stamp Duty Land Tax and Trusts
• 19. The Disclosure Regime and Other Anti-Avoidance Measures
• Appendices
• Index