SDLTM09727 - Transitional provisions – change of rate chargeable from 15% to 17%

Example 1

Company X enters into a contract to purchase a dwelling for £1m on 1 October 2024. On 1 December 2024, the contract completes without prior substantial performance. Company X is liable to pay the single rate of SDLT and does not meet the conditions for relief.  

As:

·       company X entered into the contract before 31 October 2024,

·       the contract completes on or after that date, and

·       none of the exclusions to the transitional rules apply,

company X is liable to pay SDLT at the 15% rate and not the increased rate of 17%.

Example 2

Company Y enters into a contract to purchase a dwelling for £750,000 on 1 September 2024. They paid the vendor the full consideration on 30 September 2024 with completion taking place on 1 December 2024. Company Y is liable to pay the single rate of SDLT, does not meet the conditions for relief, and there have been no changes to the contract that would affect the SDLT chargeable between substantial performance and completion.

As company Y entered into the contract and substantially performed the transaction before 31 October 2024, company Y is liable to pay SDLT at the 15% rate. When the contract completes, company Y will not need to submit another land transaction return and no additional tax liability arises as a result of the increase in rate to 17% between substantial performance and completion.