Lots of people associate Stamp Duty on property, but it isn’t just on property purchases.  There are 3 types of Stamp Duty:

In addition to this Stamp Duty is potentially chargeable if you transfer a mortgage debt between spouses.  Stamp Duty Land Tax is therefore an important tax not to be forgotten when property tax planning.  With the 3% surcharge on 2nd home purchases, it doesn’t just effect those in property rental businesses but it can also impact couples who both own a property.

There is also an Annual Tax on Enveloped Dwellings to consider for those who hold a property in a company in which they live.

Stamp Duty

stamp duty land tax

The most common form of Stamp duty an individual may experience personally takes the form of Stamp Duty Land Tax. There are different thresholds for residential and non-residential properties.

These stamp duty rates changed from a slab system to an incremental one, which benefitted the majority of residential transactions of £937k and below. Due to this reduction it made purchasing properties at the cheaper end of the housing market that first time buyers are often trying to purchase more attractive as the stamp duty changes cut the stamp duty land tax paid.

The Government therefore introduced a 3% surcharge for 2nd properties valued £40k and above.

Where a purchase is of a mixed property, the stamp duty rates take the form of a non-residential property. Non-residential property includes:

  • Commercial property such as shops or offices,
  • Agricultural land,
  • Forests,
  • Any other land or property which is not used as a dwelling,
  • 6 or more properties bought in a single transaction

It is important to note there are reliefs that are available

Stamp Duty can fall due on leases signed up where there is a substantial annual rent (over £1k), which is often not known and these charges can be quite substantial. It is therefore important to get professional advice before creating leases.

Partnerships have their own special rules, which may be suitable for use with the introduction to the 3% surcharge on second properties.

Non-residents now have an additional 2% surcharge to pay on a purchase of a residential property.

stamp duty land tax Planning

Up until March 2025 SDLT has increased thresholds. This means purchases up to £250k will not attract SDLT before reverting back to £125k. This gives some opportunities for spouses whom have mortgages on their buy-to-let properties to change the ownership of a property to save income tax without having to pay SDLT, which may have fallen due if there was a transfer of debt above the £125k threshold.

If you would like more assistance with tax planning around the ownership of the property between spouses we can assist, having helped many couples.

Stamp duty

Stamp Duty is also found on transfers of paper shares of a value of £1,000 or more at a rate of 0.5% (rounded up to the nearest £5) but not when a company issues new shares to its shareholders for example on the initial creation of the company or when new shares are subscribed for.

Stamp duty is not payable on certain transfers, for example:

  • Shares by way of a gift where no consideration is payable
  • Transfers made otherwise than on a sale such as a transfer to a trust or a nominee
  • On marriage or civil partnerships
  • On divorce or dissolution of a civil partnership

stamp duty reserve tax

This is a Stamp Duty tax on electronically transferred shares at a rate of 0.5%.

If you require some assistance with Stamp Duty calculations please contact us by calling us on 01234 300500, emailing us at [email protected] or directly to one of our team and we would be delighted to assist you.