Corporate Moving Help - The Facts About Stamp Duty On Properties
With our corporate moving help we aim to help our clients know the facts about stamp duty on properties and how it can affect them when relocating.
Stamp Duty Land Tax was introduced in December 2003 and replaced the original stamp duty on purchases of flats, houses, land and buildings.
It is based on the percentage paid on the purchase price of a home or non-residential property and then graded into bands.
The bands for tax year 2010/2011 are as follows:
0% paid at 0 - £125,000 1% payable on properties costing between £125,000 and £250,000 and 3% payable on properties costing between £250,000 and £500,000 and 4% payable on properties costing over £500,000
In the 2010 Budget these bands were amended and now First-time buyers can secure a two-year temporary stamp duty relief of up to £250,000 from 25th March, 2010. In addition a new threshold of 5% of properties over £1m was introduced on the 6th April, 2010.
How stamp duty works
It is payable on the whole value of the property, thus if you purchase a property that costs £251,000 you would pay £7,530 not just the amount over the threshold as is the case with income tax. This means that is a property costs £250,000 you would pay £2,500 and if it costs £250,001 you would pay £7,500.03.
Stamp Duty some background
Before the changes to stamp duty came into effect in 2003 purchasers had to submit their documentation providing details of their purchase to the Stamp Office for stamping. Since the changes in 2003 came into force the solicitors or licensed conveyancer for the purchaser will present their client with a Land Transaction Return Form. This form contains all the relevant information required by the Inland Revenue .
This new form was far more complex than the earlier one and was designed to prevent people claiming they had to pay more for fixtures and fittings than they did, therefore bringing the cost of the house below the threshold. Thus where the previous form consisted of a single page asking for the names and addresses of parties, location of the property and the price paid, the new form consists of six pages and has 70 questions. This form, once completed, is sent to the Inland Revenue for inspection. It is also sent to the Land Registry who only register ownership once a certificate has been received from the Inland Revenue. This tightening up by the of the Stamp Duty Law by the Inland Revenue also allows the tax man to scrutinise a sale carefully and investigate it for up to nine months afterwards.
Stamp duty has never been a popular tax and this is even more apparent in the current economic climate as the thresholds have been set at specific levels and do not automatically increase with house price inflation.
If you are planning on relocating to the UK from overseas and are looking for a house to buy please contact either Amanda or Anji at Pavilion Relocation and with our corporate moving help we will be happy to help you in your search for a home and talk you through all aspects of your prospective purchase.
Contact us on 07944 305921