Guidance

Stamp taxes newsletter: January 2022

Updated 24 February 2023

Securitisation and insurance-linked securities

At Autumn Budget 2021 the government announced that it will introduce a power in the Finance Bill 2021 to 2022 enabling HM Treasury to make Stamp Duty and Stamp Duty Reserve Tax changes in relation to securitisation and insurance-linked securities arrangements by secondary legislation. More information can be found in the tax information and impact note.

On 30 November the government published a summary of responses to a March 2021 consultation which explored changes to clarify or reform certain aspects of the taxation of securitisation companies and the Stamp Duty loan capital exemption as it applies to securitisations and to insurance-linked securities.

For more information check the consultation and the government’s summary of responses.

The government also published 2 draft statutory instruments or technical consultation together with accompanying draft explanatory memoranda and tax information and impact notes. These reflect decisions taken in relation to areas identified for consultation, as set out in the summary of responses. The technical consultations closed on 10 January 2022.

The Stamp Duty and Stamp Duty Reserve Tax draft statutory instrument updates the tax rules in relation to securitisation and insurance-linked securities arrangements. This reduces cost and complexity by providing exemption from Stamp Duty and Stamp Duty Reserve Tax for the transfer of the standard notes issued as part of these arrangements. The instrument will be made under the enabling power taken in the Finance Bill 2021 to 2022

New regime for the taxation of qualifying asset holding companies

Find more information in the tax and information note on the new tax regime for asset holding companies.

The regime includes exemption from Stamp Duty and Stamp Duty Reserve Tax for repurchases by a qualifying asset holding company of share and loan capital which it previously issued.

Ipsos MORI voluntary research

HMRC has commissioned Ipsos MORI to conduct voluntary research to understand investment behaviours and explore the factors influencing these decisions. By participating in this research, you will provide valuable insight into the financial sector.

As Ipsos MORI, an independent research agency, have been appointed by HMRC to conduct this research, a representative from Ipsos MORI might contact your business to take part. Alternatively, if you wish to take part you can opt-in to the research.

We wish to speak to a senior person within the business who is involved in the decision making or provides advice on investment behaviour. If you do not consider yourself to be best placed to discuss these topics on behalf of your business, we would be grateful if you could notify the most appropriate individual. Feedback will be completely confidential, and any information provided for this study will be used for research purposes only. You will not be asked for details of your personal or organisational tax affairs.

Contact Ipsos MORI if you wish to take part:

Andrew Shaw: Associate Director at Ipsos MORI
Andrew.shaw@ipsos.com
Telephone: 07974 588 399

Stamp Duty Land Tax consultation

The government has published a consultation — Stamp Duty Land Tax: Mixed-Property Purchases and Multiple Dwellings Relief. They are seeking views on possible changes to 2 areas of Stamp Duty Land Tax. These are:

• the rules for calculating tax on purchases of mixed-property, that is purchases which consist both of residential and non-residential property
• Multiple Dwellings Relief, which is available on the purchase of 2 or more dwellings

The background to the consultation is that these rules are being used by some purchasers to unfairly reduce the Stamp Duty Land Tax payable on their property transactions. While HMRC has a strong record of successfully challenging these cases at Tribunal, the potential changes outlined in the consultation would make the system fairer and reduce the scope for incorrect or abusive claims.

The consultation closes on 22 February 2022, we would really appreciate hearing what you think by that date. If you would like to meet with policy officials to discuss your view you can email stamptaxes.budgetfinancebill@hmrc.gov.uk.

Stamp Duty Land Tax and Freeports

Tax site designation orders for:

• Humber, Thames, Teesside Freeports tax sites took effect on 19 November 2021
• Freeport East tax site took effect on 30 December 2021

You can check the maps of Freeport locations in the UK, their outer boundaries and the Freeport tax sites within them.

Tax site designation orders taking effect means that purchases of land and buildings in these areas with effective dates between the day an order takes effect and 30 September 2026 will be eligible for Stamp Duty Land Tax relief provided the qualifying conditions have been and continue to be met. Find more guidance on the qualifying conditions for relief.

For help with making a claim for freeports relief, see guidance on making a return. Remember to enter code 36 for relief relating to freeports located in England in response to the second part of question 9 on the SDLT1.

We will update you again when further tax site designation orders take effect.

Stamp Duty Land Tax temporary rates

From 1 October 2021, the nil rate band for residential purchases in England and Northern Ireland returned to the normal amount of £125,000. This follows a period, from 8 July 2020 and 30 September 2021, when the nil rate band was temporarily increased to:

• £500,000 for the period 8 July 2020 to 30 June 2021
• £250,000 for the period 1 July 2021 to 30 September 2021

The Stamp Duty Land Tax calculator is up to date and reflects the changes to the nil rate band.

Capital Gains Tax Payment for Property Disposal Service

Two changes to the Capital Gains Tax and Payment of Property Disposals service rules were announced at the recent Budget.

1. Time limits

Individuals, trustees and personal representatives of deceased persons, will now have 60 days instead of 30 days to report and pay any tax due on UK land and property disposals.

The government has listened closely to feedback from stakeholders about their experience of the Payment of Property Disposals service, and also noted the Office of Tax Simplification’s recommendation within their second report Capital Gains Tax — second report: Simplifying practical, technical and administrative issues.

The extension to 60 days will allow more time for customers to produce and provide accurate figures as well as sufficient time to engage with advisers.

Customers and agents have:

• 60 days from the completion date to report and pay tax on a disposal of UK land and property that results in Capital Gains Tax to pay if the completion date for the disposal was on or after 27 October 2021
• still have 30 days from the completion date to report and pay tax on a disposal of UK land and property that results in Capital Gains Tax to pay if the completion date was before 27 October 2021

You can report and arrange to pay any tax due through our online service or by contacting your tax agent.

2. Mixed use property

The rules have been clarified for UK residents so that where a gain arises in relation to a mixed use property, only the portion of the gain that is the residential property gain is to be reported and paid using Payment of Property Disposals. A mixed use property is one that has both residential and non-residential elements.