HMRC SDLT: SDLTM07300 – Scope: who is chargeable: joint purchasers

Principles and Concepts of Joint Purchasers Chargeability

This section of the HMRC internal manual outlines the chargeability of joint purchasers under SDLT (Stamp Duty Land Tax) regulations. It provides guidance on who is considered chargeable when multiple parties are involved in a property purchase.

  • Defines the scope of SDLT chargeability for joint purchasers.
  • Explains the criteria for determining chargeable parties.
  • Offers examples to illustrate different scenarios.
  • Clarifies legal obligations and responsibilities of joint purchasers.

HMRC Guidance: SDLTM07300 – Who is Chargeable: Joint Purchasers

Understanding Responsibility for Submission of the Land Transaction Return

When you purchase a property with one or more people, you are considered a joint purchaser. This includes situations where you own the property as joint tenants or tenants in common. Here’s how the submission of the land transaction return works in these cases:

– Only one land transaction return is needed for all joint purchasers.
– This return can be completed by any one of the joint purchasers.
– All purchasers must sign the declaration on this return.

According to FA03/S103(3), joint purchasers must submit one return. This means that individual joint purchasers cannot submit separate returns for their shares.

What if the Purchaser is a Partnership?

If the joint purchasers are part of a partnership, the rules for signing the declaration change slightly:

– All partners can sign the declaration.
– Alternatively, one partner can be nominated by the partnership to sign on behalf of all. This nominated person must inform HM Revenue & Customs (HMRC) about their role.

The Role of Trustees in Joint Purchases

When trustees are listed as joint purchasers, the process is fairly straightforward:

– Any one of the trustees can sign the declaration on the land transaction return.

However, it is important to note that:

– A nominee or a bare trustee does not count as a purchaser in this context.
– As a result, they cannot sign the declaration. Only the actual purchaser in this situation must sign.

Who is Responsible for Paying the Tax?

In the case of joint purchasers, all parties share the responsibility for paying the tax related to the property purchase. Here are the main points to remember:

– All joint purchasers are jointly liable for the tax.
– Any one of the joint purchasers can take care of the tax payment.

This means that if there are two or more purchasers, one person can pay the total amount owed, even if each purchaser’s share of the obligation may differ. It’s important to keep records of how payments are made among joint purchasers for future reference or in case of any disputes.

Examples of Joint Purchasers and Tax Responsibilities

To illustrate the processes described above, consider the following examples:

– Example 1: Joint Tenants
Alice and Bob are joint tenants who decide to purchase a house together. They only need to file one land transaction return. Alice fills it out, but both Alice and Bob must sign it. They are both responsible for paying the associated stamp duty tax, but Bob could choose to pay the entire amount himself.

– Example 2: Tenants in Common
Karen and John purchase a flat as tenants in common. Like Alice and Bob, they only submit one transaction return. John completes it and both sign the necessary declaration. They are both responsible for the tax, and either can pay it, regardless of their ownership shares in the property.

– Example 3: Partnership Purchasing a Property
A group of friends forms a partnership to buy a shop. As purchasers, the partnership needs to submit a single return. One partner, Sarah, is designated to sign the declaration. All partners share the tax bill and any one of them can pay the full amount.

Key Takeaways on Joint Purchasers

Here are some key concepts to keep in mind regarding joint purchasers:

– Only one land transaction return is needed, which simplifies the process.
– Each purchaser must sign the declaration to validate the return.
– Joint purchasers are collectively responsible for the payment of tax, but any one of them can settle it.
– In cases where a partnership or trustees are involved, specific rules apply for signing.

This understanding of joint purchasing helps clarify responsibilities and obligations when buying property as a group, ensuring compliance with HMRC requirements.

Useful article? You may find it helpful to read the original guidance here: HMRC SDLT: SDLTM07300 – Scope: who is chargeable: joint purchasers

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Written by Land Tax Expert Nick Garner.
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