Summary SQE2 - Real Property (Tax)

1) SDLT

What is the SDLT rates for residential property?

Purchase price/Lease SDLT rate SDLT rate – Purchase additional
premium/Transfer value rental property
x < £125,000 Zero 3%
£125,001 < x < £250,000 2% 5%
£250,001 < x < £925,000 5% 8%
£925,001 < x < £1,500,000 10% 13%
£500,001 =< x 15% 15%
(purchased by corporates)
(20 March 2014 – present)
£1,500,001 < x 12% 15%

What is the SDLT rates for commercial property?

Purchase price/Lease SDLT rate
premium/Transfer value
x < £150,000 Zero
£150,001 < x < £250,000 2%
£250,001 < x 5%

Net present value (lease) SDLT rate
x < £150,000 Zero
£150,001 < x < £5,000,000 1%
£500,000,001 < x 2%

When are SDLT returns required?

SDLT returns are required for transfers of leasehold/freehold assignments, relief claims, lease
for more than 7 years, or other transactions. Form SDLT2 is required for at least two
sellers/buyers, Form SDLT3 is required for further space needed, Form SDLT4 is required
for complex commercial deals/leases, Form SDLT5 for land transaction return certificate.
They must be submitted to HMRC within 14 days of completion. Otherwise penalties,
interest and fine will be imposed.

SDLT returns are not required for freehold transactions worth less than £40,000, lease
purchases for more than 7 years and less than £40,000, lease purchases for less than 7 years
where SDLT threshold exceeds its value.