What is Stamp Duty?

Stamp duty is a tax traditionally levied on the execution of certain legal documents for transactions, such as property purchases or share transfers. In the UK, it applies to buyers and tenants of residential and non-residential property, as well as purchasers of shares in companies.

Stamp Duty Land Tax (SDLT)

SDLT rates vary across UK regions.

England and Northern Ireland

In England and Northern Ireland, SDLT on residential property follows a progressive scale based on the property’s purchase price. For 2024/25:

·        First-time buyers pay 0% on properties up to £425,000, with rates up to 5% on the portion above this, provided the property is their main home and costs less than £625,000.

·        Standard buyers pay 0% up to £250,000, with rates ranging from 5% to 12% for portions above this, up to £1.5 million.

·        A 3% surcharge applies to additional properties (e.g., second homes or buy-to-let), increasing rates to 3%–15%.

·        Non-residents pay an additional 2% surcharge on residential property purchases.

Wales

In Wales, the equivalent tax is Land Transaction Tax (LTT). For 2024/25, LTT on residential property follows a progressive scale:

·        First-time buyers pay 0% up to £225,000, with rates up to 12% for properties over £1.5 million.

·        A 4% surcharge applies to additional properties, such as second homes, increasing rates accordingly.

Scotland

In Scotland, the equivalent is Land and Buildings Transaction Tax (LBTT). For 2024/25:

·        First-time buyers pay 0% up to £175,000, with rates up to 12% for properties over £750,000.

·        A 6% Additional Dwelling Supplement (ADS) applies to second homes or buy-to-let properties, increasing rates accordingly.

Non-residential property purchases in all regions have separate progressive rates, typically lower than residential rates, based on property value.

Stamp Duty on the Purchase of Securities

Stamp Duty Reserve Tax (SDRT) applies to the purchase of shares in UK companies, typically at a rate of 0.5% of the transaction value. A higher rate of 1.5% may apply in specific cases, such as certain transactions involving share transfers into depository receipt schemes or clearance services.

If you need help calculating your taxes, Foundry Accounting can assist!