SDLT Glossary

Key facts

SDLT has its own specific terminology that can differ from everyday property language.
Understanding terms like “chargeable consideration” and “effective date” is essential for calculating SDLT correctly.
The “linked transactions” rules can affect SDLT by aggregating the price of multiple purchases.
A “major interest” means a freehold or leasehold — not a licence or tenancy at will.
The “effective date” of a transaction (usually completion) determines which rates apply.

A – D

Additional Dwelling

A residential property that is not the buyer’s only or main residence. Purchases of additional dwellings are subject to a 5% surcharge on top of the standard SDLT rates (from 31 October 2024).^[1]

Annex

A self-contained unit within the grounds of a main dwelling (e.g. a granny annexe). An annex may or may not be treated as a separate dwelling for SDLT purposes, depending on its characteristics and degree of self-containment.

Assent

A legal document (form AS1) used to transfer property from a deceased person’s estate to a beneficiary. An assent is not a land transaction for SDLT purposes and does not trigger SDLT.

Bare Trust

A trust where the trustee holds property as a nominee for the beneficiary with no active duties. For SDLT, the beneficiary (not the trustee) is treated as the purchaser. See Trusts and SDLT.

Chargeable Consideration

The total value given in exchange for the property, including: the cash price, VAT (if applicable), assumed mortgages and debts, the value of works or services provided, and any other consideration. SDLT is calculated on the chargeable consideration.^[2]

Chargeable Interest

An interest in or right over land in England or Northern Ireland that gives rise to an SDLT charge when acquired. Includes freehold estates, leasehold estates, and certain other interests. Exempt interests (e.g. security interests, licences to use land) are not chargeable interests.^[3]

Completion

The date on which a property transaction is finalised: the purchase price is paid, legal title passes, and the buyer receives the keys. Usually the effective date for SDLT purposes, unless substantial performance occurs earlier.

Connected Persons

Individuals or entities that are related or linked for tax purposes. Includes relatives (spouse, civil partner, siblings, parents, children), companies controlled by the person, and trustees of settlements. Connected-person rules affect SDLT in partnership transactions and the market-value rule.

E – L

Effective Date

The date that determines when SDLT is payable and which rates apply. Usually the completion date, but it is the date of substantial performance if the purchaser takes possession or pays substantially all the consideration before completion.^[2]

Enveloped Dwelling

A residential property owned by a “non-natural person” (typically a company, partnership with a corporate partner, or collective investment scheme). Purchases of dwellings by such entities above £500,000 are subject to a flat 17% SDLT rate (the “enveloped dwellings” rate).

First-Time Buyer

A person who has never owned a freehold or leasehold interest in a residential property anywhere in the world. First-time buyers benefit from reduced SDLT rates on purchases up to £500,000 (from April 2025: 0% up to £300,000, 5% on £300,001–£500,000).^[1]

Group Relief

An SDLT relief that exempts property transfers between companies in the same 75% corporate group. Subject to a 3-year clawback if the transferee leaves the group. See Group Relief & Corporate Transfers.

Higher Rate

The 5% surcharge on top of standard SDLT rates that applies to purchases of additional residential dwellings (second homes, buy-to-let, company purchases). Formerly 3% before 31 October 2024.

Lease Premium

A lump sum paid by a tenant to a landlord for the grant or assignment of a lease. SDLT may be payable on the premium in addition to any SDLT on the rent (calculated using the NPV formula). See SDLT on Leases.

Linked Transactions

Two or more transactions between the same buyer and seller (or connected persons) that form part of a single arrangement. Consideration is aggregated for rate purposes, which can push the combined total into a higher SDLT band.^[2]

M – R

Main Residence

The property where an individual lives as their primary home. Relevant to the higher-rate surcharge (which does not apply if the purchase replaces the buyer’s only or main residence) and to the “replacing main residence” provisions.

Major Interest

A freehold estate or a leasehold estate granted for a term of more than 7 years. SDLT notifications and most reliefs apply to acquisitions of major interests. Short leases (7 years or less) have simplified rules.^[3]

Mixed-Use Property

A property that includes both residential and non-residential elements (e.g. a flat above a shop). Mixed-use transactions are taxed at the lower non-residential rates. See Mixed-Use Property.

Net Present Value (NPV)

The method used to calculate SDLT on the rental element of a lease. The NPV discounts future rent payments to a present-day value using a 3.5% temporal discount rate. SDLT is charged on the NPV that exceeds the applicable threshold.

Non-Resident Surcharge

A 2% surcharge on residential property purchases by non-UK residents, introduced 1 April 2021. Applies on top of all other rates, including the higher-rate surcharge. See Non-Resident Surcharge.

Notifiable Transaction

A land transaction that must be reported to HMRC by filing an SDLT return within 14 days of the effective date. Most acquisitions of a major interest for consideration above £40,000 are notifiable, even if no SDLT is payable.

S – Z

SDLT Return

The return (form SDLT1, usually filed online) that must be submitted to HMRC within 14 days of the effective date of a notifiable transaction. Filing the return is required to obtain a land transaction certificate (SDLT5) for Land Registry registration. See SDLT Returns: How to File.

Slice System

The current progressive rate system (introduced December 2014) where each SDLT band applies only to the portion of the price within that band — similar to Income Tax bands. Replaced the old “slab” system.

Slab System

The former SDLT rate system (2003–2014) where a single rate applied to the entire purchase price based on which threshold it exceeded. Created cliff edges at each threshold boundary.

Substantial Performance

A contract is substantially performed when the purchaser takes possession of the property or pays substantially all of the consideration, even if the transaction has not yet legally completed. Substantial performance triggers the SDLT liability and starts the 14-day filing clock.^[2]

Sum of Lower Proportions (SLP)

A formula used to calculate SDLT on property transfers involving partnerships. For each partner, their partnership share before and after the transfer is compared, and the lower figure is taken. The sum of these lower proportions determines the exempt portion. See Partnerships & SDLT.

Tip: If you encounter an unfamiliar SDLT term in correspondence from HMRC or your solicitor, check the HMRC SDLT Manual for the official technical definition.

Frequently Asked Questions

What does “chargeable consideration” mean?

Chargeable consideration is the total amount given in exchange for the property. It includes the cash price, any VAT, assumed mortgages, the value of works or services provided, and any other consideration in money or money’s worth. It is the figure on which SDLT is calculated.

What is the difference between “completion” and “effective date”?

Completion is the date the property transaction is finalised and the purchase price is paid. The effective date for SDLT is usually the completion date, but it can be earlier if the purchaser takes possession (substantial performance) before completion. The effective date determines which SDLT rates apply and when the 14-day filing deadline starts.

What are linked transactions?

Linked transactions are two or more land transactions between the same buyer and seller (or connected persons) that form part of a single scheme, arrangement, or series. When transactions are linked, the consideration is aggregated and SDLT is calculated on the total, then apportioned. This can result in a higher rate applying.

What is a “major interest in land”?

A major interest in land is a freehold estate or a leasehold estate granted for more than 7 years. SDLT applies to acquisitions of major interests. Short leases (7 years or less) have different rules and are generally notifiable only if the premium exceeds the relevant threshold.

Sources

Stamp Duty Land Tax — GOV.UK
SDLT Technical Guidance — HMRC
Finance Act 2003 — legislation.gov.uk