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Stamp duty surcharge - details emerge for non-resident purchases

The government has published draft legislation giving further details on the two per cent stamp duty surcharge on non-residents purchasing residential property in the UK. 

As expected the government has confirmed that from April 1 2021 the surcharge will apply to non-UK resident companies, trusts and individuals who have not been resident for 183 out of a continuous 365 day period that falls within the "relevant period". 

The "relevant period" in this case is 364 days before, and 365 days after, the effective date of the transaction.

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An advice note from property tax consultancy Mishcon de Reya sets out what a company is in this instance. 

“A company will be non-resident where it is not UK resident for corporation tax purposes or where the company is UK resident but is a ‘close company’ controlled by a small number of non-UK investors. The latter is intended to stop non-resident investors circumventing the surcharge by simply setting up a UK company buyer” the note specifies.

Mishcon says: “Most non-residents (and certain rental sector investors in particular) should therefore aim to complete any pending residential property purchases before April 1 2021, given the double benefit of both the temporary SDLT holiday and the two per cent surcharge not yet applying.”

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