It is likely that this guidance will change materially in the next few months, as explanations are expanded, detail is refined and further examples are added.
(2)
We are actively seeking feedback on any aspect of this guidance.
Please send any comments or suggestions to
Joanne Hall
Stamp Taxes Policy
Upper 5th Floor, Royal Exchange
Exchange Street
Manchester
Cheshire
M2 7EB
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Background
(1)
Stamp Duty Land Tax, introduced in Finance Act 2003, is a charge on transactions and is designed to replace the current stamp duty on land and buildings. The tax is effective from 1 December 2003.
(2)
Stamp duty is over 300 years old. It is a charge on documents that transfer property and when duty is paid stamps are impressed physically on the document. Unlike modern taxes there is no provision for the tax to be collected directly from taxpayers by assessment.
(3)
Stamp Duty Land Tax is a modern transaction tax on land transactions involving any estate, interest, right or power in or over land in the United Kingdom.
(4)
Documents evidencing land transactions effected on or after 1 December 2003 and chargeable to Stamp Duty Land Tax will no longer be physically stamped.
(5)
Documents evidencing an acquisition of land or an interest in land not chargeable to Stamp Duty Land Tax remain chargeable to stamp duty.
(6)
Such transactions include the acquisition of an interest in a partnership, the acquisition of land from an incoming partner in consideration for a share in the partnership and also the transfer of land to an outgoing partner as consideration for a share in the partnership.
(7)
Stamp Duty Land Tax will be charged on the grant of a new lease but, at the time of writing, consultation continues as to how the charge will operate.
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The tax - FA03/S42
(1)
Stamp Duty Land Tax is a modernised form of stamp duty.
(2)
The objectives of Stamp Duty Land Tax are to ensure fairness, to support the Government’s e- business agenda, (in particular the Introduction of paperless electronic conveyancing,) and to update the legal framework of stamp duty, bringing it in line with more modern taxes.
(3)
Stamp Duty Land Tax is effective from 1 December 2003.
(4)
Stamp Duty Land Tax is a process now, check later system with modernised compliance powers and rights of appeal, in line with those for Income Tax and Corporation Tax.
(5)
The tax is limited to the acquisition of land situated in the UK, the boundary being the low water mark of every part of the UK which borders the sea. It does not extend to the bed of the territorial sea but piers, jetties and similar structures, with one end attached to the UK, do comprise part of the UK.
(6)
Stamp Duty Land Tax is chargeable on the acquisition of a chargeable interest whether or not evidenced in writing. If a contract is substantially performed before formal completion the charge arises at the time of substantial performance. Provided the land acquired is in the United Kingdom the tax is chargeable wherever the transaction is effected and whatever the residence of the parties.
