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by
Kitty Pryse-Jones |
In the 2002 budget, the Government announced that it
was looking at modernising the Stamp Duty regime in order
to combat tax avoidance. As a result of this, on 1st
December 2003 "Stamp Duty" was replaced with "Stamp Duty
Land Tax".
We suspect that the Inland Revenue will now be looking
more closely at transactions showing values just under the
Stamp Duty Land Tax thresholds!
For residential properties the bands are as follows:
| Value not
exceeding £125,000 |
nil |
| £125,001 -
£250,000 |
1% |
| £250,001
- £500,000 |
3% |
| Over
£500,000 |
4% |
For non-residential properties the 0% threshold has
been raised to £150,000. |
Before completion can take place, a Land Transaction
Return (an eight-page document) now has to be completed
and signed in black ink by each buyer.
Up until this change, we had always been permitted to
sign the relevant forms on behalf of our clients, but this
is no longer acceptable to the Inland Revenue. All
purchasers not only now have to self-assess the tax due
but also supply their National Insurance numbers.
Once completed, each form together with the duty itself
has to be forwarded on to the appropriate authority.
Provided it appears prima facie to comply with the rules,
a certificate will be issued to us as proof of payment. As
you can see, the tax now has to be paid up front, whereas
the declaration form itself is not fully checked out by
the Inland Revenue until later. In many ways this is
similar to the personal Tax Return process -written
confirmation from the buyers themselves that the
information given is correct is mandatory. If the Revenue
does not receive a Return within 30 days of completion an
automatic penalty is triggered.
Penalties are as follows:
- Between 30 and 120 days - £100
- After 120 days - £200
Interest will also be charged in addition to the
automatic penalty if the payment itself is made late. |
