What are Special Stamp Duty Land Taxes?

Special stamp duty land taxes apply where there are multiple sales or transfers between the same buyer and seller.

Linked Transactions

Where two or more property transactions involve the same buyer and seller, they may be ‘linked’ for SDLT purposes. HMRC may treat a person connected to the buyer, such as a spouse or civil partner, a child, or a sibling, as the same buyer and persons connected to the seller as the same seller when seeking to apply the linked transaction rules.

Transactions count as ‘linked’ if:

• There is more than one transaction;
• The same transactions are between the same buyer and seller (or people connected to them); and
• The transactions are part of a single arrangement or scheme or part of a series of transactions.

 

Transactions may be linked because they form part of the same single arrangement or scheme, regardless of whether they are documented separately. So, transactions would be linked if the husband purchases a house, and his wife purchases associated land from the same seller. The buyers are connected and purchasing the property and land from the same seller is part of the same deal.

Transactions may also be linked where they form a series. There is no limit to the time between transactions for them to be regarded as linked.

The Whole Picture

Where transactions are linked, it is necessary to look at the whole picture – the buyer pays SDLT by reference to the total value of all the linked transactions rather than separately on the value of each transaction. This may mean that more SDLT is payable than if each transaction is assessed individually – only one threshold is available and the SDLT may be payable at the higher rates.

The approach is to work out the SDLT on the total value of all the linked transactions and apportion it to the individual transactions.

Thresholds

The threshold is where SDLT starts to apply. If you buy a property for less than the threshold, there’s no SDLT to pay.

Thresholds up to 31 March 2025

SDLT starts to apply when you buy a property that costs:

• £250,000 for residential properties
• £425,000 for first-time buyers buying a residential property worth £625,000 or less
• £150,000 for non-residential land and properties

Thresholds from 1 April 2025

SDLT starts to apply when you buy a property that costs:

• £125,000 for residential properties
• £300,000 for first-time buyers buying a residential property worth £500,000 or less
• £150,000 for non-residential land and properties

Same Buyer and Seller but No Link

The linked rules do not apply to transactions between the same buyer and seller if there was no prior agreement or option, no special price or discount was agreed and there was nothing else to link the transactions. The additional SDLT cost should be weighed up against any discount negotiated on land taxes.

Partner note: FA 2003, s.108

 

Disclaimer: The information about stamp duty land taxes is provided in this article including text and graphics. It does not intend to disregard any of the professional advice.