Read the original guidance here:
HMRC SDLT: SDLTM31600 – Application

Joint Purchasers and Stamp Duty Land Tax

This section discusses what happens in a land transaction when there are two or more buyers who will share ownership of the property. It’s important to note that this guidance does not cover situations involving partnerships or trustees.

Understanding Joint Purchasers

When multiple people buy a property together, they are considered joint purchasers. Here are some key points to understand:

• Any responsibility placed on one buyer also applies to all joint buyers. This means if one buyer can fulfill a requirement, it counts for all.
• If there is a transaction that needs to be reported (known as a notifiable transaction), only one land transaction return is necessary, but all buyers must confirm that this return is accurate and complete.

This is specified under FA03/S103(4), which means all buyers share responsibility for the information provided in the return.

Requirements and Authorisations

Any tasks or requirements that apply to the buyers under the stamp duty land tax (SDLT) rules need to be acknowledged by all joint purchasers. For example, if HM Revenue & Customs (HMRC) needs further details about the transaction, they will reach out to all buyers. This ensures that everyone is informed and involved in the process.

Liability for Tax and Returns

It’s essential to understand how financial obligations work in this context:

• The tax responsibilities of the buyers are considered both joint and individual. This means that if one buyer does not submit the land transaction return or pay the associated tax, all buyers can be held liable for penalties and interest charges.
• In practice, HMRC can collect any unpaid tax from any one of the buyers, regardless of who actually failed to pay.

Notices from HMRC

HMRC issues formal notices to inform buyers of any requirements or issues. Here’s how it works:

• All joint buyers must receive these notices. If a notice is sent, it does not apply to just one buyer unless it has also been sent to the others (provided their identities are known).
• For example, if HMRC needs additional information regarding the transaction, all purchasers must be notified to ensure compliance.

Appeals Process

If a buyer wishes to appeal a decision made by HMRC, any one of the purchasers can submit the appeal. However, the outcome of the appeal must be agreed upon by all the joint purchasers. This is important because:

• Any decision reached is binding on all purchasers, meaning everyone must abide by the result of the appeal.
• This sense of shared responsibility helps prevent disputes between joint purchasers who may have differing views on the transaction.

Practical Example

Consider a case where two individuals, Alice and Bob, purchase a property together. Here’s how the principles apply:

• Both Alice and Bob are jointly responsible for filing the land transaction return. If they agree to submit it, both must confirm its accuracy.
• If HMRC requests more information, they will ask Alice and Bob for the same information, ensuring both are kept in the loop and that the required data is consistent between them.
• If Alice fails to pay the tax due on time, HMRC can pursue either Alice or Bob for the tax and any penalties, even if Bob has fulfilled his obligations.
• If HMRC issues a notice regarding their transaction, both Alice and Bob must receive it. If only one of them is informed, the notice does not take effect.
• If Alice thinks the tax amount owed is incorrect and wants to appeal, she can do so. However, both she and Bob must agree on the appeal’s course of action. Whatever decision is reached will affect them both.

Summary of Responsibilities

Here’s a quick overview of what joint purchasers need to remember:

• Joint Responsibility: All buyers share equal responsibility for obligations.
• Single Return: Only one land transaction return is needed, but all must ensure it’s accurate.
• Tax Liability: Tax obligations are joint, meaning penalties can be applied to any buyer for non-compliance.
• HMRC Notices: All purchasers must receive communications from HMRC.
• Appeals: Any appeal must be agreed upon by all buyers.

Understanding these principles is essential for anyone considering purchasing land jointly, as it affects their financial obligations and legal responsibilities throughout the transaction process.