Who Pays SDLT?

The Buyer Pays SDLT

SDLT is a buyer’s tax. The legal liability rests with the person (or entity) acquiring the chargeable interest in land or property. The seller has no SDLT obligation on the sale.^[1]

In most residential transactions, the buyer’s solicitor or conveyancer will:

• Calculate the SDLT due
• Collect the payment from the buyer (usually at completion)
• File the SDLT return with HMRC
• Obtain the SDLT5 certificate needed for Land Registry registration

Individuals

Most SDLT is paid by individuals buying a home or investment property. Key points:^[2]

• Single buyer — the individual is the purchaser and solely liable
• Joint buyers (e.g. a couple buying together) — all are jointly and severally liable for the full SDLT amount
• First-time buyers may qualify for relief with a higher nil-rate band
• Individuals who already own a property may be liable for the higher-rate surcharge

Companies

Companies buying property in England or Northern Ireland are subject to SDLT. Special rules apply:^[3]

• Companies buying residential property always pay the higher-rate surcharge (5% from 31 October 2024) because a company cannot have a “main residence”
• Companies buying residential property over £500,000 may be subject to the 15% flat rate (for “enveloped dwellings”), though various reliefs can reduce this
• Companies buying commercial property pay the standard non-residential SDLT rates with no surcharge
• Group relief may exempt transfers between companies in the same 75% group

Trusts and Trustees

When property is acquired by a trust, the trustee(s) are the purchasers for SDLT purposes:

• Bare trusts — the beneficiary is treated as the purchaser. If the beneficiary already owns another property, the higher-rate surcharge may apply
• Other trusts (discretionary, interest in possession) — the trustees are the purchasers. Trusts buying residential property will usually pay the higher-rate surcharge
• Transfers into or out of a trust may trigger SDLT depending on the consideration involved

Non-UK Residents

Non-UK residents buying residential property in England or Northern Ireland pay an additional 2% surcharge on top of all other applicable rates. This applies from 1 April 2021.^[1]

For SDLT purposes, you are non-UK resident if you have not been present in the UK for at least 183 days in the 12 months before the effective date of the transaction. For joint purchases, if any purchaser is non-UK resident, the surcharge applies to the entire transaction.

Partnerships

SDLT has special rules for partnerships. In general:

• When a partnership buys property from a third party, SDLT is calculated on the chargeable consideration in the normal way
• Transfers of property into or out of a partnership, or between partnerships sharing a common partner, have special rules based on the partners’ respective shares
• The sum of the lower proportions (SLP) formula determines how much of the consideration is subject to SDLT

Agents and Nominees

Where a person acquires property as agent or nominee for another person, the principal (the person the property is acquired for) is treated as the purchaser and is liable for SDLT.^[2]

Further Reading

• What Is Stamp Duty Land Tax? — the basics of SDLT
• Higher Rates for Additional Dwellings — the 5% surcharge explained
• Non-Resident Surcharge (2%) — full details for overseas buyers
• Partnerships & SDLT — the special partnership rules
• Trusts and SDLT — SDLT for trustees and beneficiaries