Stamp Duty and Stamp Duty Reserve Tax: transfer schemes of arrangement and restructuring plans
Stamp Duty and Stamp Duty Reserve Tax: transfer schemes of arrangement and restructuring plans
This guidance explains the changes to Companies Act regulations which were introduced from 4 March 2015, and has been updated to reflect temporary measures put in place due to coronavirus (COVID-19).
Changes to the Community Infrastructure Levy (CIL)
Changes to the Community Infrastructure Levy have been made by the Community Infrastructure Levy (Coronavirus) (Amendment) (England) Regulations 2020. A copy of the draft legislation will be available on the www.legislation.gov.uk website shortly. The regulations were laid on 30 June 2020 and will come into force later in the summer. MHLG has also updated its guidance for local authorities This guidance will be finalised when the regulations come into force.
The Regulations were introduced to supplement the financial measures that the government has put in place to help small and medium sized businesses during the COVID-19 outbreak. They give CIL charging authorities a discretion which is applicable for a limited time (in certain prescribed circumstances and if it is considered appropriate) to defer CIL payments, to disapply late payment interest and surcharge payments; and to credit interest already charged to developers.
The regulatory changes apply to England only.
Stamp Duty Land Tax: temporary increase to the nil rate band for SDLT on residential property
In the Summer 2020 Economic Update the Chancellor of the Exchequer announced temporary increases to the Stamp Duty Land Tax nil rate bands for residential property. The new rules increase the nil rate band from £125,000 to £500,000. The measure applies to transactions that are completed or substantially performed between 8 July 2020 and 31 March 2021 inclusive. The temporary rates do not apply where the transaction was substantially performed before 8 July 2020. This page on GOV.UK contains more information and the new rates and bands tables. The policy paper (published 10 July 2020) on the changes is here.
Welsh Land Transaction Tax (LTT) - temporary increase in the nil rate band for LTT main rate (only) residential transactions
The Minister for Finance and Trefnydd has announced the increase of the LTT nil rate band for main rate residential transactions to £250,000. This will take effect from 27 July 2020 and end on 31 March 2021. The temporary LTT change will not apply to the higher rates. The new rates and bands tables have been published on the Welsh Revenue Authority website here.
The Written Statement issued by the Minister for Finance and Trefnydd is here.
The regulations effecting this change have been published – see here.
Land and Buildings Transaction Tax – temporary extension of nil rate band for residential property transactions
The Scottish Government has confirmed that it is to temporarily increase the nil rate band for Land and Buildings Transaction Tax (LBTT) residential property transactions from £145,000 to £250,000. This change will be introduced from Wednesday (15 July 2020) and will remain in place until 31 March 2021 2021.
Rates for the Additional Dwelling Supplement (ADS) and non-residential LBTT remain unchanged.
Residential transactions for consideration of £40,000 or more will still require to be notified to Revenue Scotland even if no tax is due.
|Up to £250,000||0%|
|Above £250,000 to £325,000||5%|
|Above £325,000 to £750,000||10%|
Revenue Scotland has updated its guidance to reflect these changes. The guidance – which includes information on calculating the amount of tax that is due, information on making an online LBTT return and guidance for users of the Scottish Electronic Tax System (SETS) on identifying first-time buyers and corrections that should be made to such returns – can be found here.
Revenue Scotland would welcome feedback from users of SETS on the operation of the system.
SDLT Higher Rates on Additional Dwellings refunds - exceptional circumstances
A Written Ministerial Statement was published on 3 June.
In addition HMRC has issued the following:
When a person buys a dwelling, they pay a higher rate of Stamp Duty Land Tax where the property is not the only dwelling that they own. This is known as the Higher Rates for Additional Dwellings (HRAD). A payment of HRAD will be refunded where the new property replaces the person’s main home and the previous main home is sold within three years of buying the new home.
For most people, three years is and remains enough time to sell a previous main dwelling. However, the government recognises that there will sometimes be exceptional circumstances not in the control of the buyer or seller which mean that the previous dwelling cannot be sold within three years. As an example, the Ministry of Housing, Communities and Local Government issued guidance in response to the COVID-19 pandemic, advising against the marketing of properties in most cases from 26 March to 13 May 2020. This meant that some people could not sell their properties during this time. In addition, some sellers have found that prospective buyers have had to pull out of transactions directly as a result of COVID-19. Other individuals have been unable to undertake house sales because they need to self-isolate.
The Government does not want people to face an additional tax charge as a result of exceptional circumstances outside of their control, such as the government’s recent instructions relating to the housing market. As a result, the government has announced its intention to change the HRAD legislation. This will mean that people can receive a refund where they sell their previous main residence outside the three year period because exceptional circumstances made it impossible to sell the property within three years. The COVID-19 pandemic is an exceptional circumstance, and other examples might include action taken by a public authority preventing the sale of the property.
The person must sell their previous main residence as soon as possible after the exceptional circumstances no longer apply in order to qualify for the refund. The legislation will apply where the three year period ended on or after 1 January 2020 and the previous main residence is sold after the three years.
The HRAD pages on GOV.UK and the SDLT manual have been updated to reflect this change. The guidance sets out that customers who sold their previous main residence on or after 1 January 2020 and outside the three year period due to reasons outside their control should write to HMRC with an explanation of why they were unable to sell their previous main residence within the three year period and the following information:
the name, address and daytime telephone number of the person making the request (either the main buyer of the property which attracted the higher rate of SDLT or their agent)
the main buyer’s name and address, if they are not the person making the request
details of the property that attracted the higher rates of SDLT, including the effective date of purchase and the SDLT unique transaction reference number
details of the previous main residence that has been sold, including the effective date of sale, the address of the property and the name of the buyer
the amount of tax paid on the property that attracted the higher rates of SDLT
the amount of the requested repayment of tax
the bank account and sort code details of the person to receive the payment
If the repayment is to go to an agent rather than the purchaser HMRC will need a signed purchaser authority. If an agent is making the request HMRC also needs a signed letter of consent from the lead purchaser.
The request should be sent to:
BT Stamp Duty Land Tax HM Revenue and Customs BX9 1HD
HMRC will consider each customer’s amended return on a case-by-case basis.
This applies to homes sold in England and Northern Ireland. Wales and Scotland have their own land and property transaction taxes.
The links to the HRAD pages on GOV.UK and the SDLT manual are below:
Additional Dwelling Supplement repayment claims Scotland
Revenue Scotland has updated its guidance to reflect the changes to the timeframe for repayments of the Additional Dwelling Supplement (ADS) contained in the Coronavirus (Scotland) (No.2) Act 2020.
The legislation increases the timeframe by which some buyers can dispose of their previous main residence and still be eligible for a repayment of ADS from 18 to 36 months. It will apply to buyers who purchased a new main residence prior to 25 March 2020, with an effective purchase date of between 24 September 2018 and 24 March 2020.
More information is available on the Revenue Scotland website: COVID-19 ADS Repayment Claims.
Land and Buildings Transaction Tax
The Coronavirus (Scotland) (No 2) Bill has been introduced to the Scottish Parliament and contains provisions to extend the time period for selling a previous main residence in order to claim repayment of the Land and Buildings Transaction Tax (LBTT) 4 per cent Additional Dwelling Supplement (ADS). This period has been extended from 18 months to 27 months, where the effective date of the purchase of the new main residence fell within the period beginning with 24 September 2018 and ending 24 March 2020. The provisions also enable Scottish Ministers to extend this period further by order. The Bill is expected to be agreed by the Scottish Parliament by Wednesday 20 May.
|Query||Status / response|
How will the Stamp Duty on shares processes work as forms cannot be ‘stamped’ as this is a physical process which requires HMRC staff present at the Stamp Office?
A temporary electronic process has been introduced by HMRC. Changes have also been made to cover the adjudication process, and the process for schemes of arrangement.
Links to guidance are:
Relief from Stamp Duty in respect of documents effecting intra-group transfers of stock or marketable securities
What is the position regarding repayments of Stamp Duty in the current circumstances of the Covid-19 pandemic?
HMRC have provided an update on the temporary Stamp Duty repayments process which they are putting in place for the Coronavirus (COVID-19) pandemic. The information on the repayments process provided in the attached note and will only apply to Stamp Duty on shares and pre-December 2003 land transactions.
What is the position for Stamp Duty on Pre 2003 Land Transactions?
A HMRC have put in place temporary procedures covering these transactions due to Covid-19. Where they would usually accept only hard copy posted documents, they are now accepting signed and dated documents by email instead. Currently HMRC can only accept electronic payments. They will provide a confirmation letter in place of a stamped document to allow the transaction to be registered. HM Land Registry have agreed to accept the confirmation letter in place of the stamped document, and HMRC have agreed a temporary process with VOA for L(A)451 forms. Further information can be found here.
Which helpline number should be used for SDLT debt enquiries, including time to pay arrangements?
The SDLT debt enquiries helpline number is 0300 200 3844. There is a small team of HMRC officers trained on SDLT debt who can be reached on this number.
What are the temporary arrangements for refunds of Stamp Duty Reserve Tax (SDRT) due to coronavirus?
HMRC have temporarily changed the way they deal with SDRT refunds.
An electronic version of a refund request should be emailed to HMRC at: mailbox.sdrt [at] hmrc.gov.uk. Refund requests should not be sent by post. See Stamp Duty Reserve Tax: getting a refund for full details
All stamp duty post should be emailed to HMRC using the dedicated stamp duty mailbox: stampdutymailbox [at] hmrc.gov.uk while the temporary COVID-19 processes are in place.
HMRC have reiterated that currently physical stamp duty post should not be sent to Birmingham Stamp Office or to the SDLT postal address. Doing so will lead to delays in that post being sent to the correct teams for processing.