With effect from 1 March 2019 buyers need to ensure that their stamp duty is paid within 14 days of the sale transaction in a move which affects all land and property transactions in England.
A completed SDLT return must be made within 14 days of the ‘effective date’ of the transaction (the date the transfer is complete) but can be when the contract is ‘substantially performed’ (eg most of the buying price is paid, the buyer is entitled to possession of property or the first rental payment made). This applies even if no tax is due because the sales value is under the £125,000 threshold.
There is also a new penalty regime for late filings and payments. Buyers will pay an automatic fixed penalty for failure to return by the filing date. The amount of the penalty depends on the lateness of the return.
There is a fixed penalty of £100 for returns filed up to three months after the filing date, rising to £200 for returns later than three months.
In addition, in extreme cases where a filing is a year or more late, HMRC will also charge a tax-based penalty, which can amount to the full amount of the tax due on the return.
There are a few exceptions to the requirement for a SDLT return, this includes transactions where no money or other payment changed hands, if property inherited is in a will and when property is transferred because of a divorce or civil partnership dissolution.
If you would like any help or advice on SDLT please contact one of our tax team.