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TODAY'S OTHER NEWS

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.

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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