ICAEW's Tax Faculty's provides a summary of the announcements on stamp taxes in the Spring Budget 2021.
Stamp duty holiday
Budget 2021 confirmed that the temporary increase in the stamp duty land tax (SDLT) residential property nil rate band threshold to £500,000 would continue beyond 31 March 2021 until 30 June 2021. This will help many house buyers who were struggling to complete their transactions by the 31 March deadline. For transactions with an effective date of 1 July 2021 to 30 September 2021, the nil rate band will be £250,000 before returning to its normal level of £125,000 from 1 October 2021. This legislation for this extension will be included in FB 2021.
This extension for SDLT covers only residential property in England and Northern Ireland. However, the Welsh Revenue Authority has also announced that the temporary increase in the land transaction tax (LTT) nil rate band threshold for residential property to £250,000 would continue beyond 31 March 2021 until 30 June 2021, before returning to its normal level of £180,000 from 1 July 2021. The Scottish Budget 2021-2022 confirmed that the ceiling of the nil rate band for residential land and buildings transaction tax (LBTT) will return, as planned, from £250,000 to £145,000 for transactions with an effective date after 31 March 2021.
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SDLT surcharge for non-resident purchasers
The Budget confirmed that the 2% SDLT surcharge for non-UK residents purchasing residential property in England and Northern Ireland will apply from 1 April 2021. The definitions of residence and exclusions for this charge apply differently to other taxes. Therefore, a UK resident may inadvertently find themselves subject to this charge. There is a reclaim mechanism should circumstances change following the transaction.
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Relief for housing co-operatives from 15% SDLT rate and ATED
New reliefs from ATED and the 15% flat rate of SDLT are being introduced for certain qualifying housing co-operatives. The relevant legislation will be included in FB 2021.
Budget 2021 confirmed that for SDLT, the relief can be claimed for land transactions where the effective date of the transaction is on or after 3 March 2021. The relief was originally set to apply from a date following Autumn Budget 2020 (which was cancelled).
For ATED, the relief will apply to chargeable periods beginning on or after 1 April 2020. This will allow eligible housing co-operatives who have already paid ATED for that period to claim a refund.
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SDLT relief for Freeports
To find out more about this relief and other tax reliefs available to Freeports, read the business tax section.
Tax Faculty
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More on Budget 2021
Read the rest of the Tax Faculty's summary of the tax related announcements in the Budget on 3 March 2021.
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