Following an announcement in Budget 2018, the government has launched a consultation, Stamp Duty Land Tax: non-UK resident surcharge consultation, to consider a 1% Stamp Duty Land Tax (SDLT) surcharge on non-UK residents purchasing residential property in England and Northern Ireland. The government is concerned that purchases of property by non-UK residents is pushing up house prices for UK residents.
The surcharge would apply to freehold and leasehold purchases of residential property by non-UK resident individuals and certain non-natural persons.
This latest addition to SDLT rates follows other recent changes, including
In designing the non-resident SDLT surcharge, the government has been guided by two key principles
In outline, the government is proposing to treat individuals as non-UK resident for the purposes of the surcharge if they spent fewer than 183 days in the UK in the 12 months ending with the date the transaction occurs. A person will be deemed to have spent a day in the UK if they are here at the end of a day (midnight).
Although SDLT is only payable on property or land purchased in England and Northern Ireland, for the purposes of the SDLT residence test, it is days spent in the whole of the UK that will be relevant, not just days spent in England or Northern Ireland.
The government proposes that where an individual who has been subject to the surcharge spends 183 days or more in the UK in the 12 months following the effective date of the transaction, they will be eligible for a refund of the surcharge. There are special rules where there are joint purchasers of a property.
This consultation will last for 12 weeks until 6 May 2019. Comments for inclusion with the ICAEW response should be emailed to Sue.Moore@icaew.com before 15 April 2019.