Read the original guidance here:
HMRC SDLT: SDLTM50350 – Procedure: Later linked transaction – Section 81A Finance Act 2003

Procedure for Later Linked Transactions Under Section 81A of the Finance Act 2003

This guidance explains what to do if you have a later linked transaction after an original transaction. The rules are stated under Section 81A of the Finance Act 2003 concerning Stamp Duty Land Tax (SDLT). There are different scenarios depending on whether the original transaction was reported and whether any tax was paid.

1. Original Transaction Notified but No Tax Was Due

If you reported your first transaction using an SDLT1 form but did not pay any tax because the value was below the tax threshold, here’s what you need to do if a later linked transaction occurs:

• You must do another SDLT1 form for this new transaction.
• You will also need to revise your original SDLT return. To do this, you should send a letter to the Stamp Office that includes the following information:
• The Unique Transaction Reference Number (UTRN) from your original transaction
• Details of the amount involved in the later linked transaction
• Your self-assessment of any tax now due
• Make sure to pay any tax owed within 30 days of the later linked transaction.

Example:

You reported a house sale for £150,000, which is below the current SDLT threshold, and therefore didn’t pay any tax. If you then decide to buy an additional property linked to that sale for £200,000, you must re-assess the original transaction. You would submit a new SDLT1 form for the £200,000 property and send a letter to the Stamp Office with your UTRN, the linked transaction details, and any tax due based on the total amount.

2. Original Transaction Notified and Tax Paid

If you reported your original transaction and paid the applicable tax, but later have a linked transaction, follow these steps:

• Submit an SDLT1 form for the new transaction.
• Amend your original return. Write to the Stamp Office with the following details:
• The UTRN from your first transaction
• Details of the amount involved in the new transaction
• Your self-assessment of any additional tax that is now due
• Again, pay any additional tax owed within 30 days of the later linked transaction.

Example:

Let’s say your first property purchase was £300,000 and you paid the SDLT due on that amount. If you later buy a second property linked to that purchase for £400,000, you will need to file a new SDLT1 form for the second purchase and amend your original return. Include the UTRN for the first property, the consideration for the new transaction, and assess any additional tax you need to pay.

3. Original Transaction Was Not Notifiable

In some cases, your original transaction may not have been reported because it was below the notification threshold. If you have a later linked transaction, here’s how to proceed:

• If you need to report the original transaction now due to the new linked transaction, you will submit an SDLT1 form for the new transaction as usual. Additionally, an SDLT1 form will now be required for the original transaction. Send this to the Stamp Office with a letter that includes:
• The UTRN of the later return
• Details of the later linked transaction
• Your assessment of any additional tax due
• Ensure you pay any tax owed within 30 days of the later linked transaction.

Example:

Suppose you bought a piece of land for £50,000, and this was not reported because it was below the notification threshold. Later, you decide to sell that piece of land linked to a larger development for £600,000. Now, you need to report both transactions. You will file a new SDLT1 for the sale of the land and also submit a return for the original purchase. Include the necessary details in your letter to the Stamp Office and assess any tax due.

Important Changes from 1 March 2019

Starting from 1 March 2019, if your original transaction becomes notifiable for the first time due to a later linked transaction, you need to make sure that both your return and any tax owed is submitted and paid within 14 days of the later linked transaction.

This means if you find yourself in a situation where initially, no report was needed, but the conditions have now changed due to a linked transaction, your obligations have also changed. You must act quickly to ensure compliance.

General Guidance for All Scenarios

Whenever you deal with SDLT and linked transactions, always ensure that:

• You keep detailed records of all transactions, including dates and amounts.
• You are quick to submit any necessary forms and payments to avoid late fees.
• If you are unsure about any of the requirements, consult with a tax professional or contact the Stamp Office for guidance.

Remember, the key details you need to pass along in any letters to the Stamp Office often include UTRNs, transaction details, and tax assessments. Being clear and thorough in your communications can help prevent misunderstandings and delays.