Stamp Duty Land Tax (SDLT) is an additional charge which is applied to most purchases of land and buildings in England and Northern Ireland. For those based in Wales and Scotland, different land taxes have been imposed on purchases. However, in the instance where any of the joint purchasers is not a UK resident, there will now be a 2% surcharge as of the 1st April 2021.
Who Qualifies For The New Surcharge?
The 2% surcharge covers individuals, partnerships, companies and trusts that are not defined as UK residents at the time of the purchase. This surcharge will be added on top of the 3% surcharge already in place when purchasing a second home.
With this new surcharge, there has been some confusion as the definition of a UK resident for SDLT is different from the statutory residence test, which is used to define non-residence for other taxes. This means that it is possible for an individual to be classed as a UK tax resident but not meet the criteria to be a resident for SDLT purposes. Those who are returning to the UK are the most likely to be caught by this new surcharge.
If you have any questions regarding the surcharge or need guidance before committing to a property purchase, please contact our team.