Stamp duty and SDLT

Rates

The main rates and thresholds for stamp duties and stamp duty land tax (SDLT) on both residential property and non-residential property remain unchanged for 2020/2021. However, the Government has confirmed that it will introduce a 2% surcharge on non-UK residents purchasing residential property in England and Northern Ireland with effect from 1 April 2021. This was a Conservative Manifesto pledge (albeit at a 3% rate).

See our table of the main tax rates and allowances for 2020/2021.

Stamp duty and SDRT deemed market value rule

The Government introduced a targeted deemed market value rule in Finance Act 2019 to prevent the reduction of stamp duty or SDRT due on share acquisitions when listed shares are transferred to a connected company for less than their market value. The Government has announced that this rule will be extended to unlisted shares in Finance Bill 2020, though only where there is an issue of shares by way of all or part consideration for the transfer of the unlisted shares.

This is likely to affect certain company reorganisations involving swamping structures, where shares in a valuable UK subsidiary are exchanged for shares of lesser value. The Government has indicated that it will amend the relevant legislation to exclude most share for share exchanges which are part of a partition demerger arrangement from the scope of the new rule.

Non-UK resident SDLT surcharge

Following a previous consultation, the Government has announced that it will introduce a 2% SDLT surcharge on non-UK residents purchasing residential property in England and Northern Ireland from 1 April 2021. This is intended to help control house price inflation and to support UK residents to get onto and move up the housing ladder. The money raised from the surcharge will be used to help address rough sleeping.

Housing co-operatives: ATED and SDLT

To make the taxation of housing co-operatives fairer, the Government has announced that it will introduce a relief for qualifying housing co-operatives from the ATED and the 15% flat rate of SDLT on purchases of dwellings over £500,000 by non-natural persons. The SDLT relief in England and Northern Ireland will take effect from Autumn Budget 2020 and the UK-wide ATED relief from 1 April 2021 with a refund available for 2020/21.