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Her Majesty’s Revenue & Customs has revealed the new rates of tax for non-UK residents seeking to buy property in England and Northern Ireland.
Purchases of land and buildings in England and Northern Ireland are subject to Stamp Duty Land Tax (SDLT), and is charged on the purchase price of a property and must be paid within 14 days of the purchase to HMRC.
From 1 April 2021:
SDLT residence tests
HMRC said buyers can apply the following SDLT Residence Tests to determine if they’re a non-UK resident. Both nationality and residence status under the UK Statutory Residence Test are not relevant for this purpose.
Partners in a business partnership buying a residential property together will be treated as joint buyers and if any partner is non-UK resident the new rates will apply.
Claiming a tax refund/relief from this tax charge
Individual buyers may be able to claim a tax refund if – after the purchase – they are present in the UK for at least 183 days in the two year period beginning a year before the purchase and ending a year after the purchase, HMRC said.
Also, if they’re a crown employee and/or their spouse or civil partner is one, they’ll be able to claim an up-front relief from this tax charge.
The new SDLT rates remain subject to approval by UK Parliament but they are expected to be as shown in the table below:
Property, lease premium or transfer value |
|
SDLT rate for UK residents |
Up to £125,000 |
2% |
0% |
From £125,001 to £250,000 |
4% |
2% |
From £250,001 to £925,000 |
7% |
5% |
From £925,001 to £1.5 million |
12% |
10% |
Over £1.5 million |
14% |
12% |
Example – SDLT payable by a non-UK resident.
In May 2021, if an individual buys a house in England for £275,000. The SDLT they owe will be calculated as follows:
Total amount of SDLT you pay = £9,250
Special rates of tax
HMRC also said special rates of tax will apply if:
Details of the current rates of SDLT can be found on GOV.UK, with information about the new rates to be published there soon.