Budget 2021: Stamp Duty Land Tax

Given the high take up of property purchases following the temporary increase of the 0% SDLT rate to £500,000 which was due to end on 31 March 2021, there are many property transaction which were unlikely to complete in time to enjoy the break.

Initially this was to be a finite break and the band would have dropped to £125,000 on 1 April 2021.

In his Budget Speech on 3 March 2021 the Chancellor, Rishi Sunak, announced a much anticipated extension to the break.

The scheme is extended as follows:

The £500,000 will now end on 30 June 2021.

Then it will reduce to £250,000 for July to September 2021, returning to £125,000 on 1 October 2021.

The relevant date for SDLT is not necessarily the completion date but may be earlier if the transaction is substantially performed at an earlier date.

Substantial performance is defined as:

  • Payment of rent under a lease. When any payment of rent is made, the contract is substantially performed on that date.
  • Payment of most of the consideration other than rent is made. This is taken as 90% or more of the consideration
  • The purchaser is entitled to possession of the subject matter of the transaction. This is when the purchaser “obtains the keys to the door” and is entitled to occupy the property.

These dates may be earlier than the legal completion of the transaction and are a good planning point if a deadline is rapidly approaching.

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