Stamp Duty Land Tax (SDLT) is a complex area of legislation and can have a significant tax impact if calculations are not correctly prepared.
For example, where the purchaser is a company and the seller is a connected person, then the Deemed Market Value is used for determining the SDLT liability.
A ‘Company’ includes not only Limited Companies but also Limited Liability Partnerships.
Sale at under value or gift
The market value of a transaction on the effective date is used for the calculation of SDLT.
Renting or Leasing
Both a ‘Tenancy at Will’ and a ‘Licence to Occupy’ are normally exempt from SDLT, with all other forms of lease being subject to SDLT.
Sub-leases
For a Limited Company to be able to create a ‘sub-lease’, it must have the right to exclusive possession of the land to be able to pass this on to a third party in that sub-lease. Therefore, the head lease can no longer be a ‘Tenancy at Will’, as the sub-lease is not, and so SDLT will be due on the head lease on the date that the sub-lease is created.
At Lambert Chapman LLP we can review your planned transaction to determine the SDLT position, to ensure that it is being taxed correctly.
Disclaimer
The views expressed in this article are the personal views of the Author and other professionals may express different views. They may not be the views of Lambert Chapman LLP. The material in the article cannot and should not be considered as exhaustive. Professional advice should be sought in connection with any of the issues contained in the article and the implementation of any actions.