Everyone is talking about Stamp Duty, or its temporary absence so here are a few key facts on this often debated Tax:
- Stamp Duty is thought to have originated in Venice in 1604. Its name comes from the physical stamp which had to be attached to, or impressed upon a document to show that stamp duty had been paid before the document was legally effective.
- Stamp Duty Land Tax (SDLT) was introduced in England in 1694 during the reign of William and Mary to raise money for war against France.
- SDLT receipts in 2019 totalled £15.5 billion with most regions reporting a fall in the value of SDLT receipts
- In 1985, SDLT only applied to properties worth over £30,000 and it was applied at a blanket rate of 1%
- Total SDLT transactions in Q2 2020 were 39% lower than in Q1 2020 and 44% lower than in Q2 2019, mainly due to the impacts of COVID-19
- There are some exemptions to SDLT including property that is left in a will, property that is gifted and transfers of property in a divorce or when a civil partnership is dissolved
- The Labour party issued a white paper, in 2019 entitled ‘Land for the Many’ which proposed the phasing out of SDLT for people buying homes to live in, themselves.
- Solicitors or Conveyancers usually pay Stamp Duty on behalf of Buyers and complete the Stamp Duty return. They have 14 days after completing the purchase of a property to complete this process.
- If HMRC suspect stamp duty avoidance, they may investigate an individual property transaction and the suspect’s entire tax affairs. HMRC can do this up to six years after a house purchase and the penalty for bending the rules are repayment of the full stamp duty bill plus a penalty of up to 100% of the tax owed plus interest.