HMRC SDLT: SDLTM09656 – Scope: when is Stamp Duty Land Tax (SDLT) chargeable: higher rate charge for acquisitions of residential property by certain non-natural persons FA03/S55/SCH4A: withdrawal of relief and the ‘Homes for Ukraine’ Sponsorship Scheme

Stamp Duty Land Tax (SDLT) Chargeability and Relief Withdrawal

This section of the HMRC internal manual discusses the conditions under which Stamp Duty Land Tax (SDLT) is chargeable, particularly focusing on the higher rate for acquisitions by non-natural persons. It also covers the withdrawal of relief in specific scenarios, including the ‘Homes for Ukraine’ Sponsorship Scheme.

Explains SDLT chargeability for non-natural persons.
Details higher rate charge conditions under FA03/S55/SCH4A.
Discusses relief withdrawal circumstances.
Includes information on the ‘Homes for Ukraine’ Sponsorship Scheme.

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Read the original guidance here:
HMRC SDLT: SDLTM09656 – Scope: when is Stamp Duty Land Tax (SDLT) chargeable: higher rate charge for acquisitions of residential property by certain non-natural persons FA03/S55/SCH4A: withdrawal of relief and the ‘Homes for Ukraine’ Sponsorship Scheme

Understanding When Stamp Duty Land Tax (SDLT) Applies

What is Stamp Duty Land Tax (SDLT)?

Stamp Duty Land Tax, often called SDLT, is a tax you pay when you purchase a property or land over a certain price in England and Northern Ireland. The amount of SDLT you owe depends on the price of the property and whether you’re a first-time buyer, purchasing residential or non-residential property, or if you’re buying additional properties.

When is SDLT Charged?

SDLT is charged on the purchase of properties, including residential dwellings. However, there are specific rules about when and how much tax you should pay.

Higher Rates of SDLT

A higher rate of SDLT is charged on certain purchases. This applies mainly to individuals or entities that are not natural persons, such as companies or partnerships. If you are buying a residential property and fall into this category, you will likely owe more SDLT.

Key Concepts Related to Higher Rates

– Natural Persons vs Non-Natural Persons: A natural person is an individual, while a non-natural person refers to legal entities like companies. SDLT rules often differentiate between these two when applying rates.
– Higher Rate Thresholds: Specific properties acquired by non-natural persons incur a higher rate.

Understanding the Homes for Ukraine Sponsorship Scheme

The Homes for Ukraine Sponsorship Scheme allows individuals to provide housing for refugees fleeing Ukraine. This scheme has its own rules concerning SDLT, especially regarding relief from higher rates.

Conditions for Relief from Higher Rates

Under the rules, a dwelling (like a house or flat) may still benefit from lower SDLT rates if:

– Occupied by Refugees: If the dwelling is occupied by individuals who are refugees under the Homes for Ukraine Sponsorship Scheme, this still counts as holding the property for eligible purposes.
– Steps Taken Towards Accommodation: If the purchaser is actively working to accommodate a refugee without delays, they may benefit from relief.

Important Details on Relief

– Simply signing up for the Homes for Ukraine Scheme does not qualify as sufficient action. You must do more to show you are preparing to help a refugee.
– It’s essential to take practical steps to house individuals under this scheme quickly, rather than only registering your intention without further action.

How to Take Appropriate Steps

If you wish to benefit from the SDLT relief related to the Homes for Ukraine Scheme, consider the following actions:

– Contact Local Authorities: Reach out to local councils or charities involved in the scheme to facilitate the process of accommodating a refugee.
– Prepare the Property: Ensure the property is ready to be lived in. This could mean making necessary repairs, furnishing, and providing basic supplies.
– Coordinate with the Scheme Representatives: Make sure you maintain communication with relevant parties to ensure that everything is in place for a refugee to move in.

Example of SDLT Application

Let’s use an example to see how this works in practice:

– Scenario: You purchase a two-bedroom flat for £300,000. You are a natural person, and you plan to let it out to a family fleeing Ukraine.
– Actions Taken: You register for the Homes for Ukraine Scheme and begin preparing the flat by cleaning, furnishing it, and ensuring the family has the essentials upon arrival.
– SDLT Implication: In this case, as long as you are all set to accommodate the family quickly, you may benefit from the reduced SDLT rate because the property is used under the Homes for Ukraine guidelines.

Need for Further Action

Simply registering for the Homes for Ukraine scheme without immediate action is insufficient. If you fail to show that you are facilitating accommodation, the relief may be withdrawn and you might be liable to pay the higher SDLT rates.

How to Ensure You Comply with SDLT Regulations

To remain compliant and benefit from the possible reliefs:

– Document Your Actions: Keep records of your communication with organisations or local councils involved in the Homes for Ukraine Scheme.
– Prepare the Property: Have evidence of preparations and understandings related to accommodating refugees.
– Stay Updated: Look out for any news or updates regarding SDLT regulations or other relevant housing policies from HMRC.

Key Takeaways

– Relevance of the Homes for Ukraine Scheme: Engaging with this initiative can significantly impact your SDLT obligations.
– Proof of Occupancy and Intent: You must prove that you’ve acted on your intention to provide accommodation beyond mere registration.
– Awareness of Non-Natural Person Rules: If you are representing a company or partnership, understanding the implications of being classified as a non-natural person can affect your SDLT calculation.

For more detailed information about specific SDLT guidance, including [SDLTM09555 to SDLTM09570](https://stampdutyadvicebureau.co.uk/hmrc/SDLTM09555)*, please visit the HMRC site.

Further Resources

– For questions about particular SDLT cases and how the Homes for Ukraine Scheme can affect your SDLT, check the HMRC website or consider seeking professional advice to ensure all your tax matters are correctly handled.

Understanding these principles is critical for navigating SDLT requirements accurately, especially when it comes to compassionate programs like the Homes for Ukraine Sponsorship Scheme. Ensure you take timely and appropriate actions to benefit from any available reliefs and comply with your tax obligations.