Stamp Duty Land Tax: warning about surcharge for ‘non-UK residents’26 Mar 2021
From 1st April 2021, the Chancellor will be charging an additional surcharge of 2% on top of the stamp duty land tax payable on all purchases of residential property in England and Northern Ireland where buyers are non-UK resident but be warned that the legislation has been worded in such a way that UK tax residents might unwittingly be caught by it and become liable to pay the surcharge.
For pandemic related reasons, people who are ordinarily UK tax residents may have found themselves living and working abroad for extended periods and this may result in the Revenue charging them the surcharge if they have been out of the country for a period of more than 6 months in the 12 months (183 days) before completion of the purchase of a residential property.
Refunds of the surcharge may be available to those who have paid the surcharge if they can show they are present in the UK for 6 months out of the 12 months (183 days) after completion of the purchase but it is perfectly feasible that following the pandemic, people will want to go on lots of holidays, take a long cruise or travel for extended periods and this may mean they will not be entitled to claim the refund.
These changes may also impact companies, trusts and partnerships purchasing residential property in England and Northern Ireland. Our fear is that ultimate beneficial owners who are happily resident abroad might get caught out even though they are using a UK company for the purchase.
The Revenue may insist on receiving records or evidence to confirm a purchaser’s presence in the UK including bank and credit card statements, mobile phone usage, work diaries etc.
There are reliefs that purchasers may seek to rely on but it goes without saying that the rules are very complex and intricate and legal advice should be sought in individual circumstances. We do caution however that the changes coming into force on 1 April 2021 may impact some of our clients even though they consider themselves UK tax resident.
Further information from the Government can be found using this link:
If you are someone who would benefit from any specific advice or assistance regarding these matters, please contact Ian Pringle by telephone on 0207 486 5131 or by email to firstname.lastname@example.org or make an online enquiry here.
This blog was prepared on 25 March 2021. It is not intended to be advice and should not be relied upon as such.