As a conveyancer, you will know that Stamp Duty Land Tax (SDLT) on residential property can prove complex, presenting many traps for the unwary. This course is a timely recap of the SDLT rules and the related problems you are likely to come across in practice, whether that’s an evasive client, avoidance schemes, or the potential availability of tax reliefs.
Particular challenges you may come up against include determining whether you should classify a property as residential or commercial; the application of multiple dwellings relief; and being alert to your clients’ motives. The rules on linked transactions and connected parties can mean some clients may attempt to split a deal amongst different relatives, or associated companies or partnerships.
You must consider SDLT carefully at the start of the transaction. It is vital this is done by someone who understands the taxation issues, and to not be tempted to delegate it to a junior person and treat it simply as an admin job to do on completion. Apart from anything else, you may find that the amount on which the tax is paid may well not be the figure on the transfer itself; and the taxpayer may not even be the transferor.
The risk if you fail to explain or investigate the SDLT situation is that you could be liable should HMRC raise an enquiry – and HMRC may easily have four, six or even 20 years to do this (not the nine months you might think). The penalties can be up to 100% of the unpaid tax.
Our well known and respected SDLT expert, David Hannah of Cornerstone Tax, will explain the principles of SDLT and guide you through these challenges and pitfalls – and more.
Key learning outcomes
- Understand what amounts to residential property for SDLT purposes
- Appreciate the importance of early investigation of the SDLT situation and early advice to clients
- Know how to deal with problems areas, e.g. evasive clients, tax avoidance and linked transactions
What does this course cover?
This course takes you through SDLT and the key problem areas, and issues to consider, including:
- What amounts to residential property for SDLT purposes, and the questions you should ask of clients
- What the ‘deal’ is, and when transactions might be linked
- The ‘connected parties’ conundrum
- What you should do if you suspect the client is being evasive
- Tax planning and better structuring of the deal
- Whether SDLT avoidance schemes are dead; other tax planning possibilities
- Company purchases of residential dwellings: the additional rate, the 15% higher threshold, and tax reliefs
- Multiple dwellings relief: when it applies; how to calculate it; and when it might be reclaimed
- The additional rate: single purchases, multiple purchases – and what amounts to a main residence
- The global reach of SDLT with the higher rate: how you can be certain it doesn’t apply
- Remembering the annual tax on enveloped dwellings
- Common problems
You may also be interested in attending: SDLT for Commercial Property Lawyers (including Commercial Leases) at the same venue in the afternoon; or Land Transaction Tax in Wales.