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Question Title: Stamp Duty Land Tax & existing tenany agreements
| Question: 383 |
| What happens in regard to Stamp Duty Land Tax (SDLT) with existing tenancies created prior to 1st December 2003? How will liability for it be enforced, particularly, if my understanding of the position is correct, tax is on tenants ?
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| Answer: |
| People acquiring interests in land, including tenants, will be required to submit a 'Land Transaction Return' to the Inland Revenue along with payment of the duty. Stamp Duty Land Tax applies (subject to some transitional provisions) to all 'land transactions' completed on or after 1 December 2003. 'Land transaction' includes the conveyance or transfer of a freehold (in Scotland, transfer of ownership), the assignment or assignation of an existing tenancy and the grant of a new tenancy. So new fixed term or a move to a periodic tenancy where the existing tenancy was created before 1st December 2003 would be covered. (For more information see Letting Facts No. 32) The draft SDLT guidance is not clear regarding the tax position with regard to the extension of tenancies already in existence. The suggestion is that SDLT would be payable if the NPV-discounted value of any rental payment for the term of the extension, if taking place after the SDLT commencement date, exceeds the published thresholds (£125,000). If this situation applies, you are advised to contact the Inland Revenue Stamp Office for further guidance. Their Helpline number is 0845 6030135 and their website is www.hmrc.gov.uk/so/online/menu.htm The liability remains on the person acquiring the interest, namely the tenant, and how the Revenue is going to know when this happens and how they will collect the tax remains a mystery.
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References:
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Pages:
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Hyperlinks:
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Letting Handbook |
Chapter 14 |
letting-handbook-and-factsheets.html
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Letting Factsheet No 32 |
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factsheet-32
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For more information, discuss on the Forum
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