Read the original guidance here:
HMRC SDLT: SDLTM03600 – Scope: How much is chargeable: contents

Understanding Chargeable Consideration in Property Transactions

When buying or selling property, it’s important to understand what is considered chargeable consideration. This refers to any payments or value that triggers a tax called Stamp Duty Land Tax (SDLT). Below are key components of what constitutes chargeable consideration and specific examples to illustrate these concepts.

General Information on Chargeable Consideration

Under SDLTM03700, chargeable consideration generally includes:

• The money paid for the property.
• Any other form of payment that is agreed upon as part of the transaction.
• The value of any goods or services exchanged in the process, if applicable.

Costs Not Treated as Chargeable Consideration

Some costs do not count towards chargeable consideration. These may include:

• Costs related to the sale that are not linked to the price of the property.
• Expenses paid by the buyer that are separate from the transaction itself, such as surveys or valuations.

Check SDLTM03710 for details on costs not treated as chargeable consideration.

Understanding Fees Related to Chargeable Consideration

Some fees incurred during the buying process may impact chargeable consideration. Here are key fees to consider:

• Estate Agents’ Fees: Fees paid to estate agents to sell the property are generally part of the chargeable consideration. Refer to SDLTM03725 for more information.
• Introductory Fees: Payments made for introducing buyers to sellers can also qualify as chargeable consideration. More details can be found at SDLTM03730.
• Auction House Fees: Costs associated with selling through auctions are included in chargeable consideration too. You can read more about this in SDLTM03740.
• Finder’s Fees: Payments to those who connect buyers and sellers can impact the chargeable amount. See SDLTM03745 for further guidance.
• Legal Costs: If the seller pays legal costs on behalf of the buyer, those may be included as chargeable consideration as well. Refer to SDLTM03750.

Effects of VAT on Chargeable Consideration

It’s important to understand how VAT interacts with chargeable consideration. VAT is a tax on the value added to goods and services, and certain conditions can affect how it’s applied in a property sale. For comprehensive information, see SDLTM03800.

Payment Delays

If there is a delay in payment for the property, this might have an effect on how SDLT is calculated. Delays can change the nature of the transaction, which could matter for the tax perspective. Details can be found in SDLTM03900.

How to Allocate Charges Properly

When there is more than one component of chargeable consideration, it may require reasonable allocation among the different parts. This process ensures that SDLT is accurately assessed. For further reading on this process, please visit SDLTM04000.

Understanding Goodwill and Its Impact

Goodwill can also be considered in certain transactions. This refers to the value of a company’s brand, customer base, and other intangible assets. Goodwill might influence the SDLT calculation depending on how it’s connected to the property being sold. More context can be found at SDLTM04005.

Fixtures, Fittings, and Chattels

When buying property, fixtures and fittings can affect the SDLT calculation. Fixtures are items that are permanently attached to a building, while chattels are removable products. Understanding which items qualify as chargeable consideration is vital. You can see further details at SDLTM04010.

Property Sales with Construction Contracts

If a property sale includes a construction contract, this can affect how chargeable considerations are handled. This scenario often leads to more complex SDLT assessments. For related information, check SDLTM04015.

Exchanges of Property

When exchanging properties, the chargeable consideration may change based on their market values. The details covered in SDLTM04020 address how property exchanges are treated for SDLT purposes.

Parceling Land

In the case of partitioning land, chargeable consideration can vary based on how the land is divided. It’s important to understand the implications for SDLT. For elaboration on this topic, see SDLTM04030.

Debt Assumptions and Releases

When debts are either assumed or released during a property transaction, they can influence chargeable consideration. For guidance on this scenario, see SDLTM04040.

Foreign Currency Transactions

Buying property in a foreign currency has specific considerations under SDLT. It’s important to understand how currency conversion impacts the chargeable consideration. More insights are available at SDLTM04050.

Constructive Works and SDLT

When the purchase of property includes considerations related to construction or similar works, it can affect the SDLT hierarchy. You can see specific examples and guidelines in SDLTM04060.

Services Provided and Chargeable Consideration

If services are provided as part of the property transaction, those might be included in the chargeable consideration based on specific conditions. For further clarification, review HMRC SDLT: SDLTM03600 – Scope: How much is chargeable: contents