HMRC SDLT: Guide to Selecting Property Type Codes on SDLT Forms SDLT1, SDLT3,
Guidance on Completing SDLT Forms: Property Type Codes
This guide provides instructions for selecting the correct property type code when completing SDLT forms SDLT1, SDLT3, and SDLT4. The property type must be accurately identified as residential, mixed, non-residential, or additional residential properties, based on the nature of the transaction. Correct coding ensures compliance with tax regulations and may affect tax relief eligibility.
- For SDLT1, SDLT3, and SDLT4, select codes 01 to 04 based on property type: residential, mixed, non-residential, or additional residential.
- Residential property includes dwellings, gardens, and rights benefiting a dwelling, as defined by FA03/S116.
- Mixed property applies when part of the property is residential or linked transactions are partly residential.
- Non-residential property involves entirely non-residential transactions or multiple dwellings unless claiming Multiple Dwellings Relief.
- Additional residential properties code applies when purchasing results in owning multiple residential properties, with potential refund eligibility.
- For SDLT1 question 16, select R, N, or M to describe leased property type, aligning with question 1’s selection.
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Read the original guidance here:
HMRC SDLT: Guide to Selecting Property Type Codes on SDLT Forms SDLT1, SDLT3,
SDLTM62040 – Processing: Further guidance for completing forms SDLT1, SDLT3 and SDLT4: Selecting the appropriate code for ‘Type of property’
Introduction to Property Types
When completing the Stamp Duty Land Tax (SDLT) forms SDLT1, SDLT3, and SDLT4, it is important to accurately indicate the type of property involved in the transaction. This is done by selecting from several specified codes. Correctly categorising the property helps ensure that the right amount of tax is applied.
Types of Property and Corresponding Codes
For Question 1 on SDLT1, Question 1 on SDLT3, and Question 8 on SDLT4, users must select from four options based on the type of property involved. Each option corresponds to different categories defined by legislation. Here is a detailed explanation of each property type:
01 Residential Property
Under section FA03/S116, residential property includes:
– A building that is used or can be used as a home. This may also include properties that are currently being built or adapted for this purpose.
– Any land that is part of the garden or grounds of a residential building. This also covers buildings or structures found within the gardens or grounds.
– Rights or interests associated with the land that benefit a residential building, such as access rights via a pathway.
If a property does not meet these criteria, it is classified as non-residential.
02 Mixed Property
This code is applicable if only part of the property is residential. This category also comes into play when transactions are linked. For instance, if two transactions are related, and together they represent a property that is only partially residential, then this code should be used.
03 Non-Residential Property
This category applies when the entire property is non-residential. Notably, if the transaction includes a major interest transfer or lease for six or more distinct dwellings, it should be classified as non-residential. An exception arises if a claim for Multiple Dwellings Relief is made, which can change the tax implications.
It is essential that the response reflects the entire property included in the transaction. For example, if a farmhouse is being sold alongside other agricultural buildings, land, and a worker’s cottage, it must be recorded as mixed because it encompasses both residential and non-residential elements.
04 Residential – Additional Properties
This code should be used if the purchase leads to the buyer owning more than one residential property. It is worth noting that if the new residence is intended to replace the seller’s main home but that home hasn’t been sold yet, the code still applies. However, a refund may be claimed after the sale of the main residence. This code is also relevant for companies or non-individuals acquiring residential property, even if it is their only residential holding.
When completing the paper form SDLT1, if the answer to Question 1 is either 02 (Mixed) or 03 (Non-Residential), it is necessary to fill out SDLT4 as well. This additional form provides information regarding the usage of the non-residential parts of the property, along with other required details. If the SDLT notification is submitted online, the software will guide users through the relevant questions.
Answering SDLT1 Question 16: Type of Property Leased
For Question 16 on the SDLT1, the type of property being leased must be classified using one of the following codes:
– Residential (Code R)
– Non-residential (Code N)
– Mixed (Code M)
It is mandatory that the code chosen for Question 16 aligns with the classification made in Question 1 on the SDLT1 form.
By following these guidelines, individuals and businesses can ensure that they are complying correctly with the regulations surrounding Stamp Duty Land Tax. Accurate categorisation helps in the proper assessment of tax liabilities and avoids potential issues with the HMRC. Each property transaction can carry different implications depending on its classification, so understanding these distinctions is essential for anyone involved in property dealings.
Useful article? You may find it helpful to read the original guidance here: HMRC SDLT: Guide to Selecting Property Type Codes on SDLT Forms SDLT1, SDLT3,
