SDLT implications for companies UK property accountants

As property accountants in the UK, you must keep up-to-date with the latest tax changes and implications. One such tax change that has greatly impacted companies and landlords is the Stamp duty land tax (SDLT). Here you will explore the basics of SDLT, residential property, rates of SDLT, rental income, rental expenses, annual tax on enclosed dwellings (ATED), value-added tax (VAT) on the property, stamp duty, and land tax.

Do I need to fill out a self-assessment tax return

What is stamp duty land tax?

If you’re a property accountant, landlord tax, or buy-to-let investor, you need to be aware of Stamp Duty Land Tax. This tax is levied on the purchase or transfer of land or property in England and Wales, and different rates depend on the property’s value. For example, the rate for properties between £250,000 to £675,000 is 5%. The amount payable depends on whether you’re a tenant, landlord, or investor - so it’s important to get advice from an accountant if you’re considering purchasing or transferring any land.


What is residential property?

Knowing the tax implications of owning residential property in the UK can be tricky. You must consult an accountant or tax specialist if you’re unsure about the rules. If you own residential property and rent it out through an intermediary (like Airbnb), you may be subject to special tax rules called ‘single dwelling occupation taxes’ (SDLTs).

This can include properties that are rented out to tenants, whether they’re day-care centres or apartments in high-rise buildings. Make sure you know the specifics about your property - including its type of residential property - so you can accurately report your income and tax liabilities.


Which rates of SDLT apply?

As property accountants, we’re constantly updated with the latest tax changes and regulations. That’s why we wanted to provide you with a quick rundown of the standard rate of SDLT as well as the applicable rates for different types of property.

Remember that there are many exceptions to the standard rate of SDLT, so always consult with your accountant to ensure that you’re paying the right amount of tax or you can also have an idea about how to get an SDLT refund. In the meantime, we’ve put together a handy table to help you understand the situation for properties bought before 6 April 2007. Finally, if you want to buy or sell property in the UK, check out our blog for more insights.


Reducing the SDLT liability

The tax liability associated with the Small Business Development and Employment Act 2015 is a heavy burden for companies of all sizes. Fortunately, companies can take several practical steps to reduce liability. One of the most important is to review their business activity and reorganise if necessary. This will help trim the tax burden and make the SDLT process easier. Additionally, companies can apply for relief under Section 109(1)(a) of the Tax Acts. This relief is available to companies where total annual worldwide income is below the tax threshold, or UK property taxable income is below the tax threshold for a particular tax year, provided certain conditions are met.


Rental income

Property accountants in the UK are keeping a close eye on the tax changes coming into effect from April 2018. These changes will significantly impact companies that rent out properties in the UK. Firstly, the tax bill will vary depending on your rental income and the type of tenancy you have - private residential or commercial/industrial leasehold.

If your company rents properties in the UK, it’s essential to keep your company compliant with tax law. This includes holiday rentals and short-term letting (less than 12 months).SDLT is payable on rental income, whether the property is rented out full-time or part-time. So, if you’re a property accountant in the UK, keep an eye on these changes and ensure that your company complies with tax law.


Rental expenses

Knowing which expenses you can claim as tax deductions when renting out property can be tricky. That’s where an accountant comes in. They will typically need assessor reports confirming that all the legal requirements are met before issuing documentation such as an SDR-I Form 1094S/1095S Return for Self Assessment etc...

As for landlord tax, it’s typically deducted from the rent and is often taken from the property’s income. The landlord pays this tax on behalf of their tenants (via a mortgage), and it’s typically deducted from the rent. Rental expenses can be claimed as deductions on your tax return, subject to specific rules. These rules vary depending on the expense type, but things like mortgage interest, rates, and property management fees can all be deducted. So, if you’re renting out the property, make sure you have an accountant on hand to help you with all the tax implications.


Stamp duty and land tax

It’s never too late to plan for tax season. Ensure you get accurate advice from a tax accountant, so you know exactly what you’re paying for. It’s also important to keep up to date with current trends in the rental market, as this can help you save money on your purchase or sale.

If you’re a landlord in the UK looking to buy or sell property, be aware of the stamp duty and land tax you’ll need to pay. SDLT is a tax landlords in the UK need to be mindful of when buying or selling property, which can add up quickly. So, have all your ducks in a row before making big decisions.


Here, we have discussed the implications of stamp duty land tax (SDLT) for companies in the UK. By understanding the definition of residential property, the rates of SDLT that apply, and how to reduce the liability, you will be well on your way to avoiding any tax problems. Additionally, we have discussed rental income, rental income tax, rental expenses, ATED, and VAT on the property. If you have any questions or comments about any of the topics covered, please feel free to contact us, and our team will get back to you as soon as possible.

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