From 1 March 2019, the deadline for filing Stamp Duty Land Tax returns and paying SDLT will be reduced to 14 days from the effective date of the transaction.
In a move to put tax revenue into the coffers more quickly, HMRC has shortened the period in which to submit SDLT returns and make payment from 30 days to 14 days. SDLT returns delivered after the deadline will incur penalties, and interest will arise where payment is made late. Certain scenarios will still be subject to the 30 day deadline, but the longer deadline mainly applies to follow-up returns.
The cases where the new 14 day deadline applies and where the existing 30 day deadline will continue to apply are summarised below. Where they apply, the changes will apply to all transactions in English land with effective date on or after 1 March 2019, or which become notifiable on or after this date.
Broadly, the 14 day deadline will apply to all first notifications.
SDLT returns and payment will need to be made within 14 days of the effective date for the following:
- Delivering an SDLT return and making payment in respect of a notifiable transaction (ie the standard deadline);
- Cases where a previously non-notifiable transaction becomes notifiable as a result of a contingency ceasing or consideration becoming ascertained;
- Cases where a previously non-notifiable transaction becomes notifiable as a result of a later linked transaction;
- Cases where, as a result of holding over a lease for a period (or further period) of one year after the end of a fixed term lease, a previously non-notifiable transaction becomes notifiable;
- In respect of a lease for an indefinite term, where a continuation of a lease after the end of a deemed fixed term causes a previously non-notifiable transaction to become notifiable;
- Where a previously non-notifiable transaction becomes notifiable as a result of determining the actual rent for the first five years of the lease; and
- In respect of alternative finance investment bonds, in cases where interest is due on the first transaction where relief is withdrawn and where the bond-holder acquires control of the underlying asset and no relief is available.
Broadly, the 30 day deadline will apply to follow-up notifications.
This change in legislation does not affect all types of returns. The deadline will continue to be 30 days for the following:
- Applications to defer payment of SDLT and the subsequent payment of SDLT once the deferred amount becomes payable and/or quantifiable (although the SDLT return and payment for the non-deferrable SDLT will be due within 14 days);
- Cases where SDLT (or additional SDLT) is due in respect of a previously notified transaction as a result of a contingency ceasing or consideration becoming ascertained (for example where the original return was based on a reasonable estimate);
- Cases where SDLT (or additional SDLT) is due in respect of a previously notified transaction as a result of a later linked transaction (for example where an acquisition of a later phase in a development causes more SDLT to be due on the earlier phase(s));
- Cases where relief is withdrawn and a further return is required under section 81 of the Finance Act 2003 (such as withdrawal of group relief or charities relief);
- Cases where, as a result of holding over a lease for a period (or further period) of one year after the end of a fixed term lease, SDLT (or additional SDLT) becomes payable in respect of a previously notified transaction;
- In respect of a lease for an indefinite term, where a continuation of a lease after the end of a deemed fixed term causes SDLT (or additional SDLT) to become payable in respect of a previously notified transaction; and
- Where SDLT (or additional SDLT) becomes payable in respect of a previously notified lease as a result of determining the actual rent for the first five years of the lease.
- As always, it is recommended that SDLT advice is sought before the effective date of your transaction. If the effective date has passed, it will not be possible to mitigate any potential tax liability and, now that the deadline has been shortened, there will be less time to prepare and submit SDLT returns and make payment.
Effective date of a transaction
As a reminder, SDLT will be triggered on the effective date of a transaction, being the earlier of completion and the date when:
- the purchaser (or their connected party) takes possession of 90% or more of the property (including under licence);
- 90% or more of the consideration is paid or provided; or
- any rent is paid.
Wales and Scotland
SDLT no longer applies to acquisitions of land in Wales and Scotland, but equivalent taxes have been created in these devolved jurisdictions. The deadline for Welsh land transactions that are subject to Land Transaction Tax and Scottish transactions that are subject to Land and Buildings Transaction Tax remains 30 days from the effective date of that Welsh or Scottish transaction. However, particular care should be taken in cross-border transactions, as different deadlines would apply to the English and non-English acquisitions.