SDLTM09870 - SDLT - increased rates for non-resident transactions: Rates of SDLT which apply to non-resident transactions - s75ZA FA03

From 1 April 2021, where a chargeable transaction is identified as a “non-resident transaction”, a 2% surcharge is added to the SDLT rates in each band of the relevant rate-specifying provisions for residential property (section 75ZA(1)).

Section 75ZA(2) sets out the relevant rate-specifying provisions:

  • Standard residential rates – Table A, section 55(1B) FA03
  • Higher rates for additional dwellings and dwellings purchased by companies – Table A, para 1(2) Sch 4ZA FA03 (see SDLTM09730 onwards);
  • Higher rate charge for acquisitions of residential property by certain non-natural persons – para 3(1)(a) Sch 4A FA03 (see SDLTM09500 onwards);
  • Residential lease rates – Table A, para 2(3) Sch 5 FA03 (see SDLTM13070 onwards);
  • First-time buyers – Table A, para 4 Sch 6ZA FA03 (see SDLTM29800); and
  • Exercise of collective rights by tenants of flats – s74(1A) FA03 (see SDLTM28500 onwards).
Example 1

Fifi purchases a freehold residential property in England on 26 October 2022 for £700,000. Fifi does not already own another property, so the higher rates on additional dwellings do not apply to her. Fifi is a first-time buyer, but as the consideration for the property is above £500,000, the first time buyers’ rates do not apply to her.

Fifi is classed as non-UK resident under the test set out at paragraph 4 of Schedule 9A to FA03, and the surcharge applies. See SDLTM09880 for details of the residence test.

Her SDLT liability is calculated as follows:

  • 2% up to £250,000 = £5,000
  • 7% of £250,001 to £700,000 = £31,500.

Fifi’s total SDLT liability is therefore £36,500.

Example 2

Gia purchases a freehold residential property in Northern Ireland on 7 August 2023 for £200,000. She qualifies for first time buyers’ relief.

Gia is classed as non-UK resident according to the test set out at paragraph 4 of Schedule 9A to FA03, and the surcharge applies. See SDLTM09880 for details of the residence test.

Her SDLT liability is calculated as follows:

  • 2% of £200,000 = £4,000.