Read the original guidance here:
HMRC SDLT: Definition and Responsibilities of Companies for Stamp Duty Land Tax Compliance

Understanding Companies and Stamp Duty Land Tax (SDLT)

This section explains how a company is defined regarding stamp duty land tax and who is responsible for notifying and paying this tax.

Definition of a Company

For stamp duty land tax purposes, a company includes:

– Any legally recognised body corporate, such as a traditional company.
– Unincorporated associations, which are groups formed for a common purpose but not registered as companies.

It is important to note that this definition does not include:

– Partnerships, where two or more individuals share the business.
– Limited liability partnerships, which have a different legal structure.

For further details, refer to SDLTM33000+.

Who Signs the Return?

The person responsible for signing the declaration in a land transaction return or an amended return is usually the company secretary or another officer who is authorised by the company.

There are three types of authority that can be used:

• Express Authority: This means the person has been clearly given permission to act on behalf of the company.
• Implied Authority: This is when someone has the authority based on their role or the circumstances, even if permission wasn’t explicitly given.
• Apparent Authority: This occurs when it appears that a person has the authority to act for the company, based on what the company has communicated.

In practice, the return or amended return will generally be accepted if:

• The return contains a signature.
• There is no reason to doubt the authority of the person who signed the return.

This means that any official or employee from the company can sign the document. For example, a member of the in-house legal team has the authority to do this just as much as a company officer.

Unincorporated Associations

For unincorporated associations, the individual responsible for signing a land transaction return or amended return is typically the treasurer or acting treasurer.

Companies in Liquidation or Administration

When a company is undergoing liquidation or administration, different rules apply regarding who can sign the return. The documents must be signed by either the liquidator or the administrator, depending on the specific situation. This ensures that the process is officially handled by the authorised person in charge of managing the company’s affairs during this challenging time.

Key Responsibilities

When dealing with stamp duty land tax in relation to companies, it is essential to understand who must take action. Here are the key responsibilities:

– The company must inform HMRC when a land transaction takes place.
– The authorised signatory must complete and submit the land transaction return.
– Any necessary stamp duty land tax must be calculated and paid by the company accurately and on time.

Common Scenarios

Here are some examples to clarify how these principles apply in real-life situations:

1. Example of a Company Signing the Return:
A limited company is buying a property. The company secretary is authorised to sign the land transaction return. They sign the return, indicating the company’s agreement with the details within. As long as their authority is clear, HMRC will accept this return.

2. Example of an Unincorporated Association:
An unincorporated association, such as a sports club, decides to purchase land for its activities. The treasurer of the club signs the return. Because the treasurer has the authority to manage funds and sign contracts, this return is also valid.

3. Example of Liquidation:
If a company is in liquidation and selling its assets, the appointed liquidator must sign the return. The liquidator acts as the representative of the company at this stage, ensuring that the sale is handled correctly and legally.

Why Proper Procedures Are Important

Following the correct procedures when signing and submitting returns is critical for several reasons:

– Legality: Ensuring that the right person signs the document keeps the transaction legal.
– Avoiding Penalties: Incorrect submissions can lead to financial penalties or complications with HMRC.
– Clear Communication: A clear understanding of who is responsible for signing and paying stamp duty helps prevent misunderstandings within the company and with HMRC.

Documentation and Records

It is important to keep thorough records regarding:
– The authority given to the person signing the return.
– The details of the transaction, including any calculations related to stamp duty land tax.
– Correspondence with HMRC.

Having solid documentation helps support your case if there are any queries from HMRC or discrepancies involving your tax submissions.

Final Points

Understanding your responsibilities as a company or an unincorporated association regarding stamp duty land tax is essential. Knowing who can sign the relevant returns and how authority is established can help ensure you remain compliant with tax obligations. Always stay informed and consult appropriate guidance or professionals if you have questions about specific situations or need assistance with your returns.