An extra 2% Stamp Duty Land Tax (SDLT) charge now applies if you’re purchasing a residential property in England and Northern Ireland but you’re not a UK resident.

Introduced last week (1 April 2021), the surcharge applies to freehold and leasehold property purchases and on rents on the grant of a new lease. Purchasers who intend to live in the property must also pay the surcharge.

The changes could particularly affect non-residents purchasing relevant residential property as a second home, as they could end up paying a further 5% on top of the standard SDLT rates.

Additionally, some UK resident companies that are controlled by non-UK residents will be liable.

For companies, the entity will be deemed a non-UK resident for SDLT if:

•  the company is not a UK resident for UK corporation tax purposes; or
•  it accounts for UK corporation tax but is a close company controlled by non-UK residents

Government guidelines state that individual buyers will be able to have the surcharge refunded if they are present in the UK for at least 183 days during any continuous 365-day period within two years referenced by the date of transaction.

Whilst the majority will immediately know if they have spent 183 out of the previous 365 days in the UK, it will be less clear for some. If you are looking for any SDLT advice, contact our Private Client Tax team on 01788 539000 or 0116 261 0061.