The CIOT notes that the proposed 2% stamp duty land tax
surcharge on purchases of dwellings by non-residents from 1 April 2021,
included in the draft legislation for Finance Bill 2021, will bring residence
status into particular focus. According to the CIOT, the residence status of the buyer may need
to be determined by conveyancers, often working to short timescales, when
completing the SDLT land transaction return.
The CIOT has urged
HMRC to provide guidance on the type of evidence required to establish
residence and to publish any such guidance well in advance of the surcharge
coming into effect, given that the test applies to the 12 months prior to the
effective date of the transaction.
Marc Selby, Chair of
the CIOT’s Property Taxes Committee, points out that SDLT has been subject to
change virtually every year since its introduction in 2003: ‘The 3% surcharge
on buyers of second properties introduced in 2016 and first-time buyers’ relief
in 2018 compounded that complexity by requiring that, in the context of a
transaction tax, decisions need to be made about the intended future use of the
property being acquired. The new surcharge means the residence status of the
buyer now may also need to be determined.’
The CIOT notes that the proposed 2% stamp duty land tax
surcharge on purchases of dwellings by non-residents from 1 April 2021,
included in the draft legislation for Finance Bill 2021, will bring residence
status into particular focus. According to the CIOT, the residence status of the buyer may need
to be determined by conveyancers, often working to short timescales, when
completing the SDLT land transaction return.
The CIOT has urged
HMRC to provide guidance on the type of evidence required to establish
residence and to publish any such guidance well in advance of the surcharge
coming into effect, given that the test applies to the 12 months prior to the
effective date of the transaction.
Marc Selby, Chair of
the CIOT’s Property Taxes Committee, points out that SDLT has been subject to
change virtually every year since its introduction in 2003: ‘The 3% surcharge
on buyers of second properties introduced in 2016 and first-time buyers’ relief
in 2018 compounded that complexity by requiring that, in the context of a
transaction tax, decisions need to be made about the intended future use of the
property being acquired. The new surcharge means the residence status of the
buyer now may also need to be determined.’
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