Following announcements made in the 2016 Budget on 16 March, HMRC have published further guidance on the changes that are being made to stamp duty land tax (SDLT), and how they affect non-residential property transactions from 17 March 2016.
The changes mean that:
- on or after 17 March 2016, the SDLT rate for non-residential freehold and leasehold transactions will only be payable on the portion of the consideration which falls within each band (rather than tax being due at one rate on the entire value);
- SDLT on the rental element of non-residential leasehold transactions is already taxable on the portion of the consideration that falls within each band. From 17 March 2016 a new 2% rate applies for transactions with a net present value (NPV) above £5 million;
- from 17 March 2016, the ‘£1,000 rule’ no longer applies.
In addition, HMRC have also published further guidance on the changes that are being made to stamp duty land tax (SDLT), announced in Autumn Statement on 25 November 2015, which apply from 1 April 2016 to purchases of additional residential properties, such as second homes and buy-to-let properties.
Broadly, higher rates will apply, which will be 3% above the standard rates of SDLT but will not apply to purchases of property under £40,000 or purchases of caravans, mobile homes and houseboats.
The guidance can be found at https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/509184/GuidanceNote_Final.pdf.