Ferbrache & Farrell LLP UKRE team: understanding your obligations for SDLT self-assessment

Regardless of the outcome of the much-publicised alleged underpayment of SDLT by Deputy Prime Minister Angela Rayner, property buyers in England are reminded of their legal obligations under the SDLT regime. This is particularly important in light of recent threshold changes and transitional rules.

News sources suggest that the Deputy Prime Minister apparently thought that by transferring her old home into a trust for her disabled son, then buying a new flat in Hove, that she did not own two properties. She paid SDLT at the standard rate (read more here).

However, HMRC (His Majesty’s Revenue and Customs) interpreted the position very differently, and considered that Ms Rayner actually owned two properties and an additional £40,000 of stamp duty was due and owing.

Under current HMRC guidance, SDLT must be paid when purchasing property or land above the applicable thresholds. Buyers are required to submit a self-assessment SDLT return to HMRC within 14 days of completion. This duty applies whether the transaction involves freehold, leasehold, or shared ownership property. Failure to comply may result in penalties and interest.

It is important to remember that the buyer is personally liable for the accuracy of the SDLT return.

Legal advisors typically prepare and submit the return, but buyers must review and confirm all details before submission. Errors or omissions can delay registration of ownership and may constitute fraud.

For lease assignments, buyers must determine whether the transaction is notifiable and, if so, provide HMRC with the appropriate land transaction return and certification. Additional returns may be required within five years if rent reviews or contingent rents affect the transaction.

With SDLT rates and surcharges varying based on residency status, property type, and ownership history, buyers are urged to consult the HMRC SDLT calculator and review the latest rate tables.

The above scenario is a salutary reminder to always work on the basis that more tax will be paid than less.  Specialist advice should then be taken to ascertain if that position can change.

For further guidance, please visit the Stamp Duty Land Tax overview or alternatively, please feel free to contact us.