Residential Properties above £2 million
SDLT on the purchase of a residential property will be charged at 7% of the chargeable consideration, where this is more than £2 million.
This measure will apply for new transactions entered into from 22 March 2012.
Contracts that have been entered into before 22 March 2012, but complete after this date, will not be affected, and the old rate of 5% will apply.
Properties acquired by Companies (and other non-natural persons)
Where a UK residential property, for consideration in excess of £2 million, is acquired by a non-natural person 1, a higher rate of SDLT at 15% will be charged. These structures have been used as a way of avoiding SDLT on future purchases.
In addition, there will be an introduction of an annual charge in 2013 on such property owned by the same sorts of non-natural persons, which the Government hopes will result in a reduction in the number of high value properties owned in such structures.
The measure will apply from 21 March 2012.
Where transactions which are already in progress and contracts have been signed, on or before 21 March 2012, the higher rate will not apply.
1 Non-natural persons include companies, collective investment scheme (including unit trusts), and partnerships in which a non-natural person is a partner. There are exclusions from the charges for property developers and corporate trustees in certain circumstances.
SDLT Avoidance
Users and promoters of tax avoidance schemes that seek to avoid paying SDLT on the purchase of an interest in land, will be affected by a change in legislation.
The measure will amend the SDLT sub-sales rules, involving sub-sales and an option to purchase land, to make it clear that the grant or assignment of an option cannot satisfy the requirements of the sub-sale rules and, therefore, renders the planning ineffective.
This measure will apply for transactions on or after 21 March 2012.