Non-resident purchasers to pay more SDLT on residential property April 2021

HMRC has announced from 1st April 2021, there will be additional stamp duty Land Tax (SDLT) 2% surcharge for purchasers Who are not resident in the UK.

The charge will apply to freehold and leasehold property, It also includes certain UK resident companies that are controlled by non UK residents.

Who is counted as Non Resident for SDLT surcharge ?

UK Statutory Residence Test are not relevant for SDLT surcharge purpose. If you are UK citizen or have UK nationality you are not exempt from this SDLT surcharge.

What basis SDLT surcharge is determined ?

Buyers have to apply SDLT residence tests to determine if they are non residence in relation to the transaction. Buyers can be non residence for one transaction and can be residence on another transaction.

The rule will apply on individual basis if they are present 183 days in UK during the 12 months before their purchase take place.

It is also notable if two or more people are buying the residential property, if even one person is counted as non residence then the surcharge apply even other person is residence.

Example:

Accountant John lives in Spain. He Purchases a freehold residential property in England on 1 May 2023 for £800,000. Between 2 May 2022 and 1 May 2023,Accountant John spent 202 days in the UK. He is therefore UK resident in relation to the transaction and does not need to pay 2% surcharge.