Stamp Duty Land Tax: Rates and Thresholds
The Finance Bill will introduce a higher rate of stamp duty land tax of 5% for purchases of residential property where the consideration exceeds £1m. This rate will apply to residential purchases where the effective date (normally the date of completion) is on or after 6 April 2011.
Stamp Duty Land Tax: First-Time Buyers
For a limited period of two years, the Finance Bill will introduce relief from stamp duty land tax for purchases of residential property up to £250,000 where the purchaser (or all the purchasers) are first-time buyers and intend to occupy the property as their only or main home. This relief will be available for residential purchases where the effective date (normally the date of completion) is on or after 25 March 2010 and before 25 March 2012.
Stamp Duty Land Tax and Partnerships
The rules relating to stamp duty land tax and partnerships have been exploited to contrive a partnership relationship between the vendor and purchaser in order to reduce the chargeable consideration and thus the tax due. The Finance Bill will introduce legislation to prevent the exploitation of these rules, broadly with effect from 24 March 2010.
Overpayments of Stamp Duty Land Tax and Petroleum Revenue Tax
The error or mistake relief rules relating to stamp duty land tax and petroleum revenue tax will be amended with effect from 1 April 2011. The time limit for claiming repayments will be reduced from six years to four years. The requirement that the overpayment must be the result of a mistake in a return, and that it must be made under an assessment, will be removed. The current restrictions on the right of appeal will also be removed. These changes will bring the rules for these taxes into line with those already applying for income tax, capital gains tax and corporation tax.
Clearing Houses and Stamp Duty
The Finance Bill will include legislation to make it explicit that the power to make regulations under FA 1991 to remove multiple charges to stamp duty or stamp duty reserve tax extends to regulations providing relief to members of clearing houses and their nominees. This had been questioned by a recent Select Committee Report, leading to some confusion and uncertainty among participants in financial markets. This clarification will take effect from the date of Royal Assent to the Finance Act, but to provide clarity in respect of regulations that have already been made, the amendments will be regarded as always having had effect.