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Stamp duty spike as landlords rush to buy

2nd Jun 2016
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April 2016 represented the largest single month of stamp duty land tax (SDLT) receipts since the tax's introduction in 2003, according to the latest HMRC statistics.

Stamp duty receipts for April this year were 31.7% higher than in the same period last year.

Payments for many of the transactions completed at the end of March were not received until early April.

The large year-on-year increase in receipts in March and April could be explained by forestalling activity ahead of the introduction of the higher rate of SDLT on additional residential properties.

HMRC noted that the sharp increase was the result of “numerous recent policy changes”, and that “caution should be exercised when making comparisons over time”.

Recent policy changes include adjustments to the marginal rates and thresholds for residential SDLT in December 2014 and the devolution of SDLT to Scotland in April 2015.

According to Revenue Scotland’s latest statistics for its land and buildings transaction tax (LBTT) there was a modest spike in residential receipts in March, before the introduction of the 3% surcharge. However, non-residential receipts seem more volatile, with substantial spikes in December and March.

The HMRC figures for stamp duty taxes also include annual tax on enveloped dwellings (ATED), which is an annual tax and not a transactional tax, introduced on 1 April 2013.

As revealed in the Budget 2016 red book, the government has also predicted that SDLT is going to increase in the next five years by as much as 63%.

The Budget included a major reform to non-residential SDLT moving from a ‘slab’ to a marginal rate slice system.

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