Understanding the 2% Stamp Duty Land Tax (SDLT) non-resident surcharge is crucial for property transactions. Unlike the Statutory Residence Test (SRT), residence for this surcharge is determined by a specific SDLT day-count test outlined in FA 2003 Sch 9A.
Key points include:
- An individual is considered UK resident for the SDLT surcharge if they are present in the UK for at least 183 days within any continuous 365-day period during a 2-year relevant period. This period runs from 364 days before to 365 days after the transaction's effective date, typically at completion.
- All days spent in the UK count, with a day counted if the individual is present at midnight.
- If the buyer does not meet the 183-day requirement at the time of completion and when filing the SDLT return (usually within 14 days), they are deemed non-UK resident, and the 2% surcharge applies.
- However, if they later meet the 183-day requirement within a continuous 365-day period inside the 2-year window, they can request a repayment of the surcharge by asking HMRC to amend the SDLT return, generally within two years of the effective date.
- The surcharge applies to residential property purchases in England and Northern Ireland, in addition to standard and higher/additional dwelling SDLT rates.
- For multiple purchasers, if any individual is non-UK resident, the transaction is treated as non-resident. Each individual has their own 365-day period within the common 2-year window.
- Special rules exist for married couples or civil partners living together, where if one is UK resident and the other is not, both are treated as UK resident for the transaction, potentially avoiding the surcharge and allowing for refunds if UK residency is established after completion.
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