From 1 March 2019 it is proposed that the window to file a Stamp Duty Land Tax (“SDLT”) return, and pay any SDLT due, will reduce from 30 days to 14 days from the effective date of the transaction.
In most cases the “effective date” is the date of completion. However, where a contract for the sale of land or an agreement for lease is “substantially performed” before completion, the effective date is the date of that substantial performance. Examples of substantial performance include where a purchaser takes possession of the property, or pays the majority of the consideration for the transaction prior to completion. So in more complex arrangements, expert advice may be required on this point.
The reduced filing window will apply to all transactions with an ‘effective date’ on or after 1 March 2019. It will be essential to ensure that before that date internal processes are updated in line with this change to avoid late filings.
HMRC’s objective with the reduced window is to improve efficiency in the SDLT system. However, it is accepted that the process of preparing the forms to complete complex commercial transactions at present can be extremely time-consuming. Therefore, HMRC are currently consulting on proposed changes to the return and have published draft legislation proposing a reduction in the number of questions and volume of information that would need to be supplied.
HMRC have suggested that the impact of the time change should be minimal as most returns are apparently already filed within 14 days. However, SDLT remains a complex tax, so in time-pressured transactions it is going to be even more important for all involved to turn their minds at an early stage to what information will need to be included in the return.
The consultation is open for responses until 23 November 2018. For more information, please click here.
For more advice on SDLT amendments please contact Claire-Elaine Arthurs, Property Litigator at gunnercooke
DD: +44 (0) 7791 143 284