SDLT, introduced in Finance Act 2003, is a charge on land transactions which replaced the former Stamp Duty. It is a tax and it is enforceable as a tax. Since April 2009 there has been harmonisation of the various enforcement and penalty regimes across many taxes including SDLT.
The tax is limited to the acquisition of land situated in the UK, the boundary being the low water mark of every part of the UK which borders the sea. It does not extend to the bed of the territorial sea but piers, jetties and similar structures, with one end attached to the UK, are part of the UK.
From April 2015 SDLT has been replaced by Land and Buildings Transaction Tax in Scotland.
It was generally felt by HMRC that there was under-recovery of the voluntary duty and SDLT was introduced to rectify this. It was based on the assumption that buyers would attempt to structure transactions to avoid the new tax that replaced Stamp Duty and it is therefore drafted with many anti-avoidance provisions built in.
As is often the case with anti-avoidance rules, they can, and often do, impact on many ‘innocent’ transactions where avoidance was not an intention.
At PSTAX we understand the complexities of SDLT as well as the practical impact it has on the transactions to which it relates. We pride ourselves on being able to provide our clients with clear succinct advice to guide them through the many pitfalls of SDLT saving them money both in terms of the tax, as well as the penalties and interest associated with getting it wrong.