Stamp Duty Land Tax (SDLT)

The threshold for SDLT on residential land transactions is increased from £60,000 to £120,000, effective on or after 17th March 2005. Tax will be payable at 1% if the consideration exceeds £120,000 but does not exceed £250,000.

The higher threshold of £150,000 for residential transactions in designated disadvantaged areas has not changed.

Commercial Disadvantaged Areas Relief

After 16th March 2005, disadvantaged areas relief will no longer be available for non-residential land transactions.

Disclosure Rules Extended To SDLT

Disclosure rules were introduced for promoters or users of schemes or arrangements, a main benefit of which was expected to be a tax advantage, under the Finance Act 2004. Effectively this applied to direct taxes. The rules have now been extended to ensure that promoters or users provide details to the Inland Revenue of schemes and arrangements whose use might be expected to provide, as a main benefit of using the scheme, an SDLT advantage concerning property which:-

• is not residential property as defined in s116 FA2003 and,
• which has a market value of at least £5 million.

Anti-Avoidance

SDLT avoidance schemes have been blocked in relation to:-

• Use of group relief
• Use of acquisition relief
• Grants of leases by bare trustees to their principal
• Certain variations of leases to remove restrictive covenants
• Use of repayable loans or deposits as consideration
• Reduction of market value by encumbrance
• Use of 'sub-sale relief' in alternative finance transactions
• Use of partnerships