Stamp taxes and ATED

16 Mar 2021

Temporary changes to the nil rate band

Stamp Duty Land Tax: Temporary changes to the nil rate band – further extension


At the Spring Budget 2021, the government announced the temporary increase in the nil rate band for residential purchases in England and Northern Ireland will be extended. The £500,000 nil rate band will now apply to transactions with an effective date on or after 8 July 2020 but before 1 July 2021.Then a nil rate band of £250,000 will be in place for transactions with an effective date on or after 1 July 2021 but before 1 October 2021.The nil rate band threshold for residential property acquisitions will return to £125,000 for transactions with an effective date on or after 1 October 2021.First Time Buyers’ Relief will therefore resume from 1 July 2021.


These measures will be legislated for in the Finance Bill 2021.


The SDLT online calculator has been updated for the new rates of SDLT.

Welsh Land Transaction Tax (LTT) - temporary increase in the nil rate band for LTT main rate (only) residential transactions : further extension


On 3 March 2021 the Welsh Government announced that it will extend the temporary increase of the LTT residential nil rate band to £250,000 for transactions that have an effective date on or before 30 June 2021. The threshold will return to £180,000 for transactions with an effective date on or after 1 July 2021. The regulations making the change are here. The WRA guidance on rates is here.


The Land Transaction Tax (Temporary Variation of Rates and Bands for Residential Property Transactions) (Wales) Regulations 2020 formalised the changes.


Land and Buildings Transaction Tax – temporary extension of nil rate band for residential property transactions


The Scottish Government confirmed the temporary increase in the nil rate band for LBTT residential property transactions from £145,000 to £250,000. This change applies from 15 July 2020 to 31 March 2021.


Rates for the Additional Dwelling Supplement (ADS) and non-residential LBTT remain unchanged.


The change is implemented by the  Land and Buildings Transaction Tax (Tax Rates and Tax Bands) (Scotland) Amendment (No 2) (Coronavirus) Order 2020 (SSI 2020/215).


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.


Changes to repayment claims for Stamp Duty Land Tax, Land and Buildings Transaction Tax


SDLT Higher Rates on Additional Dwellings refunds - exceptional circumstances


The Higher Rates for Additional Dwellings (HRAD) pages on GOV.UK and the SDLT manual reflect changes made by Finance Act 2020 to provide for a refund where the previous main residence is sold outside the usual three year period because ‘exceptional circumstances’ made it impossible to sell the property within three years.


The legislation applies where the three year period ended on or after 1 January 2020 and the previous main residence is sold after the three years. 


The links to the HRAD pages on GOV.UK and the SDLT manual are below:


Scotland Land & Buildings Transaction Tax - Additional Dwelling Supplement repayment claims


Revenue Scotland guidance on the changes to the timeframe for repayments of the Additional Dwelling Supplement (ADS) contained in the Coronavirus (Scotland) (No.2) Act 2020 is available on the Revenue Scotland website: COVID-19 ADS Repayment Claims.


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 eighteen to thirty-six months. It applies to buyers who purchased a new main residence between 24 September 2018 and 24 March 2020.


Process changes


All stamp duty post should be emailed to HMRC using the dedicated stamp duty mailbox: stampdutymailbox@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.


SDLT process queryStatus/response
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.


Stamp Duty/ SDRT process queriesStatus / 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:

Completing a stock transfer form

Stamp Duty and Stamp Duty Reserve Tax: transfer schemes of arrangement

Stamp Duty and Stamp Duty Reserve Tax: transfer schemes of arrangement - guidance document

Stamp Duty: reliefs and exemptions on paper shares

Stamp Duty: getting an opinion about a payment or penalty

Relief from Stamp Duty in respect of documents effecting intra-group transfers of stock or marketable securities

Relief from SD when documents effect 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?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.
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@hmrc.gov.uk. Refund requests should not be sent by post. See Stamp Duty Reserve Tax: getting a refund for full details

What temporary process applies to schemes of arrangement?

HMRC’s guidance is here. You should not post schemes of arrangement to HMRC - you should email your documents to HMRC at stampdutymailbox@hmrc.gov.uk.

If you have already posted your documents you should resubmit them electronically.


 

Annual Tax on Enveloped Dwellings (ATED)Status / response

How do the current restrictions affect relief from Annual Tax on Enveloped Dwellings (ATED) under FA 2013 section 137 (Dwellings opened to the public)?


HMRC have confirmed the following:

In response to your enquiry - the legislation which deals with the relief from ATED for dwellings opened to the public is in section 137 of FA2013. 

Section 137(1) says that relief is due on any day if either of two conditions is satisfied: -

Condition 1 - is that the dwelling is being exploited as a source of income in the course of a qualifying trade in the normal course of which the public are offered the opportunity to make use of, stay in or otherwise enjoy the dwelling as customers of the trade on at least 28 days in any year (per Section 137(2)), or

Condition 2 - That steps are being taken for it to be open to the public (for at least 28 days) (in that or a future chargeable period) and that it will be so exploited without delay, except so far as delay is justified by commercial considerations or cannot otherwise be avoided (per section 137(3)). 

Such a dwelling will not now be able to open because of the COVID19 current restrictions  However, we do not yet know when the current restrictions will end.

Say, for example, the current restrictions ended in August -

If the dwelling is opened for 28 days before 31/3/21 relief is due per section 137(2).

If for some reason (and I don’t know what that might be) for commercial reasons etc it cannot be opened in the remaining months of the year, relief would be due under s137(3). 

If the COVID19 current restrictions last all year (i.e. to 31 March 2021), relief will be due so long as it is opened thereafter without undue delay, other than the delays excepted by section 137(3). 

In terms of filing an ATED return by the 30 April 2020 deadline, Section 100(1) says that a claim to interim relief may be made before the end of the chargeable period if one or more days in the period is relievable by virtue of sections 133 to 150. This means that if at the point the company files its ATED return, the company has met either of the conditions set out in Section 137, the company can claim interim relief in that return for the remaining days in the chargeable period.  If the position changes so that relief is no longer due (i.e. either of the two conditions above are no longer met), the company must submit a further return (per section 160).   

In summary, as long as the company is opening the dwelling to the public on any day, or is taking active steps to do so without undue delay once the crisis is over, then the COVID19 situation does not affect eligibility to this relief.