Legal News

Budget changes

After 10 years, a long overdue increase in the threshold for Stamp Duty Land Tax took effect in March 2005, with another small increase introduced in March 2006. No Stamp Duty is now payable for residential properties below £125,000 (the threshold remains at £150,000 in disadvantaged areas). Duty is payable at the rates of :

• 1% above £125,000 to £250,000
• 3% above £250,000 to £500,000
• 4% above £500,000

Another HM Revenue & Customs Return - Stamp Duty Land Tax

Before December 2003, when a property was purchased in England and Wales solicitors used to complete a simple single sided form and send this to the HM Revenue & Customs with the transfer deed, which was then stamped to show the amount of stamp duty paid. Following the government's introduction of Stamp Duty Land Tax, legislation states that it is buyers' responsibility (not that of their solicitor) to complete a new HM Revenue & Customs return and to ensure that the tax due is paid by a deadline after which penalties are payable. The form contains 71 boxes for completion, and supplementary returns may be required. (A sample form can be seen at http://www.hmrc.gov.uk/so/sdlt1-sample.pdf)

According to the HM Revenue & Customs, the aim of the new return is to 'modernise' stamp duty and to provide 'comprehensive and accurate data ... to help inform future policy and operational decisions on Land Tax.' The complex and lengthy return is also likely to be used to detect tax evasion and money-laundering.

Some solicitors ask their clients to complete the return themselves. (We recommend that you check this when obtaining quotes for conveyancing services.) By contrast, our conveyancers are happy to prepare the return for you if you wish, particularly as you are unlikely to have all the detailed information required without a fair amount of research.

For further details contact jenny.wells@farringtonwebb.co.uk