Consultation On New Stamp Duty Surcharge For Non-UK Residents


Following an announcement in the 2018 Budget, HMRC has launched a consultation seeking views on the design of a 1% Stamp Duty Land Tax (SDLT) surcharge to be levied on non-UK resident home buyers who are purchasing residential property in England and Northern Ireland.

The government has indicated that the proceeds of the new surcharge will be put towards measures to tackle rough sleeping – the government has committed to end rough sleeping by 2027.

Key points from the consultation

  • The surcharge will apply to all residential property acquisitions by non-resident individuals and corporate bodies.
  • An individual will be non-UK resident under these rules if they have spent fewer than 183 days in the UK in the 12 months prior to the property purchase. This is a different residence test to the one used for other UK tax purposes.
  • The normal tax residence rules apply to determine the residence of a corporate buyer, so the surcharge will apply to companies and unit trusts which are established and managed outside of the UK.
  • Under these rules, 1% will be added to the relevant rate of SDLT, including where the flat rate of 15% is currently payable under the rules for companies acquiring property for private purposes.
  • It will also apply in addition to the 3% surcharge introduced in 2016 for individuals buying second homes, and which currently applies to all corporate acquisitions of residential property.
  • In cases where there are multiple purchasers of a property, (including partnerships), the surcharge will apply to the whole of the price where any of the buyers are non-resident.
  • Multiple Dwellings Relief will be available for transactions that are subject to the surcharge, which means where two or more dwellings are purchased in single or linked transactions, the SDLT due can be calculated based on the average residential property price rather than on the total price paid for all the dwellings
  • UK resident close companies under the direct or indirect control of one or more non UK resident participators will also be caught by the surcharge.

The consultation ends on 6 May 2019.


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