SDLTM09726 - Transitional provisions – change of rate chargeable from 15% to 17%

The higher rate charge was increased from 15% to 17% for transactions with an effective date on or after 31 October 2024.

Contracts entered into before 31 October 2024

Where a contract was entered into on or before 30 October 2024 but is completed or substantially performed after that date, the 15% rate will continue to apply at the effective date of transaction unless after 30 October 2024:

·       there is any variation of the contract, or assignment of rights under the contract,

·       the transaction is effected in consequence of the exercise of any option, right of pre-emption or similar right, or

·       there is an assignment, sub-sale or other transaction relating to the whole or part of the subject-matter of the contract, as a result of which a person other than the purchaser under the contract becomes entitled to call for a conveyance.

Contracts substantially performed before 31 October 2024

Where a contract which has been entered into and substantially performed later completes, completion will normally be a notifiable transaction (see SDLTM08000).

However, where:

·       a contract is substantially performed before 31 October 2024 but completes on or after that date, and

·       the only reason additional tax would have been chargeable is because of the increase in rates from 15% to 17%,

those provisions are disapplied meaning that a land transaction return is not required and no additional tax will be chargeable.