Back to blog

When Is My Stamp Duty Land Tax Paid, And How?

Posted on 1st July 2020

Stamp duty is a form of tax, imposed by HMRC, that is levied upon property purchases and acquisitions, in circumstances where the transaction value is above the current threshold. For more on stamp duty land tax, and why it is payable, see the Gov.uk website.

Alternatively, contact our property experts, at property@mglegal.co.uk, who would be delighted to discuss all things stamp duty with you, in connection with your property purchase.

The starting point would be to ascertain whether your purchase is to attract any Stamp Duty that will be payable. This can be calculated by using the Gov.uk online calculator, which asks a variety of questions, in order to confirm the amount payable, if any. This can be viewed here.

In the event that the purchase will mean that stamp duty is payable, when is it payable, you may then ask.

Fixed-fee Conveyancing Solicitors:

MG Legal's leading coveyancing solicitors offer an unmatched service, and clear, fixed-fee rates. Our team put your first, and work with care to ensure that your property matters go smoothly, with no hidden costs. Call us today so speak to a conveyancing solicitor: 01995 602129

Get in touch today to speak to a Conveyancing Solicitor.

When does the Stamp Duty fall due?

Upon Completion of the transaction, the property is yours and, it is at this time that the clock starts ticking in terms of filing a return, and paying any stamp duty that is due.

So, whilst the stamp duty is not payable until the matter has completed, you should be aware of the amount due, in order to avoid any delays and late payment penalties. This will, of course, be calculated and requested by your property solicitor well ahead of Completion, in order to avoid any issues.

HMRC impose a 14-day deadline, for filing stamp duty returns, and for making payment of the tax due. Where payment is not made within this time period, penalties can be imposed, together with interest, starting at £100.00.

It is, therefore, important to ensure that you have an efficient solicitor on board, who will attend to this matter promptly. At MG Legal, we always aim to ensure that the SDLT return is filed and any payment made on the day of Completion itself. This is to ensure that there are no delays and, should there be an issue in filing the return, there is plenty of time to have the same rectified without the need for a last-minute scramble of information.

This is just one of the many reasons that MG Legal’s property experts should always be your first choice for conveyancing. For many more reasons to help aid your choice, see the reviews of our valued clients, which we are sure will help make up your mind.

Who pays the Stamp Duty?

Once it has been established whether any stamp duty is payable, and how much, who pays this?

The stamp duty payment will be handled by your property conveyancing solicitor. Our team have access to an online portal, with HMRC, which is used to facilitate the submission of SDLT returns. It is, however, possible to attend to this individually, but why make this an added stress. Leave this a matter for your conveyancer to deal with, who can ensure the return is completed without issue.

Your conveyancer will be required to confirm the details of the transaction, in order to alert HMRC to the transaction, and any SDLT that is payable.

This will include the following, as examples:

- Name(s) and address(es) of the parties involved, inclusive of the buyer’s date of birth and national insurance number;

- The property concerned, inclusive of the address and Title Number;

- Details of the transaction itself, noting the same as a conveyance, or grant of a lease, for example;

- Confirmation of the capacity that the purchaser is acting under, for example, as an individual, as a trustee or a company;

- Confirmation of the interest acquired, such as ‘freehold with vacant possession’ or ‘freehold subject to a long lease’, as examples;

- The consideration of the transaction, i.e. what funds have been exchanged in consideration of the purchase and, if this does not take a monetary format, what arrangements have been made;

- Confirmation as to whether any relief is being claimed, for example first-time buyers’ relief or multiple dwellings relief;

- The date upon which the transaction was affected, i.e. the date of completion.

Your conveyancer will require confirmation of the above details, prior to submission of the return, to ensure that the same is lodged with HMRC without issue.

What if there is no Stamp Duty payable?

Even in instances where there is no payment due to HMRC, your property conveyancing solicitor is still required to submit a return to HMRC, noting the details of the transaction, and confirmation as to why no payment is required.

For example, first-time buyers are exempt from paying Stamp Duty, provided that the purchase price is below the current threshold. Upon Completion, your property solicitor would be required to confirm the details, noted above, pertaining to the transaction, confirming that you are now the legal owner of the same. The return would, however, make provision for the fact that you are a first-time buyer and, as such, there is no payment due.

So, as you can see, whilst there may be no payment to be made to HMRC, it is still important to ensure that details of the matter are submitted to HMRC, by way of the SDLT return. If no such return is submitted, even though payment is not required, penalties can still be imposed.

It is, therefore, vital that you are aware of what stamp duty you will be required to pay, if any. For more guidance on this matter, see our blog, in which we discuss stamp duty, and where it is due.

At MG Legal, our property conveyancing solicitors deal with stamp duty scenarios on a daily basis. So, no matter what the complexities of your property purchase may entail, our team are able to advise you of what this will mean for you in terms of stamp duty land tax.

If, therefore, you are looking to purchase a property, and require stamp duty advice, or have any other conveyancing query, get in touch with us today, where our local solicitors will be on hand to assist.