UK Issues Guidance On New Stamp Duty Surcharge On Non-Residents

HM Revenue and Customs has recently issued new guidance on the Stamp Duty Land Tax (SDLT) on non-resident buyers of residential property in England and Northern Ireland.

From April 1, 2021, different rates of Stamp Duty Land Tax (SDLT) will apply to those who purchase residential property in England and Northern Ireland if they are not resident in the UK.

The rates are two percentage points higher than those that apply to purchases made by UK residents. This surcharge applies to purchases of both freehold and leasehold property and also increases the SDLT payable on rents on the grant of a new lease.

The surcharge also applies to certain UK resident companies that are controlled by non-UK residents.

The guidance – Rates of Stamp Duty Land Tax for non-UK residents – sets out the scope of the surcharge; who is liable to the surcharge; SDLT residence tests; the new rates of SDLT; exclusions from the surcharge; the interaction of the surcharge with existing reliefs; compliance obligations on taxpayers; and how to receive a refund for persons who, subsequent to a purchase, become resident in the UK.