Stamp Revamp: What You Need to Know

December 4, 2014

Describing the Stamp Duty Land (SDLT) as “one of our worst-designed and most damaging of all ,” Chancellor George Osborne yesterday abolished the “single slab rate” SDLT regime and replaced it with a new “marginal rates” system. Like , the rates of the new system will apply only to the part of the property price that falls within that band. In his Autumn Statement, Chancellor Osborne described SDLT as a “badly-designed tax on aspiration” and said it was time for it to be “fundamentally” changed. Consequently, SDLT has been restructured and will take effect at midnight on 3 December 2014. The changes apply to all property transactions which complete on or after 4 December 2014. If an exchange took place before 4 December and the contract is completed after that date, you can elect which regime you want to use. Please see the draft explanatory notes prepared by HM Revenue & regarding the Stamp Duty and Land Tax Bill – specifically section 12 − which gives the new rates. SDLT is now staggered in various bands. As an illustration, a client buying a £2 million property would pay £53,750 more in SDLT than they currently would pay (please see below for a graph which compares the rules before and after 4 December).

To see how you may be affected, you can input your information into a calculator provided by HMRC. Should you have any queries about these changes, please do not hesitate to contact the real estate team at McGuireWoods London LLP.

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