SDLTM09960 - SDLT - increased rates for non-resident transactions: Completion and amendment of land transaction return where an individual becomes UK resident after return delivered - paras 18 and 19 Sch 9A FA03
Completion of land transaction return – para 18 Sch 9A FA03
The residence test set out at paragraph 4(1) uses a “relevant period” of 364 days before the effective date of the chargeable transaction and 365 days after the effective date of the chargeable transaction, i.e. an individual can become UK resident after the effective date of the transaction.
Most land and property transactions taking place in England or Northern Ireland must be notified to HMRC on a SDLT return within 14 days of the effective date of the transaction. It is therefore possible that an individual may not yet have spent at least 183 days in the UK by the time the SDLT return is submitted.
In such cases, the SDLT return must be completed on the assumption that the individual or (as the case may be), each individual, is non-resident throughout the period beginning with the day on which the SDLT return is delivered and the end of the relevant period (paragraph 18(2)).
Example
Mohammed lives in France. He purchases a 99 year leasehold interest in a residential property in England on 1 June 2025 for £200,000. His solicitor submits the SDLT return online on 2 June 2025.
Between 1 February and 1 June 2025, Mohammed spent 100 days in the UK. Between 2 June 2025 and 31 January 2026, Mohammed spent 85 days in the UK. Under paragraph 4(1), he is therefore UK resident in relation to the transaction.
However, on the date that the SDLT return was submitted to HMRC (2 June 2025), Mohammed had only spent 100 days in the UK. The SDLT return is therefore prepared on the assumption that Mohammed is non-resident. Hence, as all of the conditions in paragraph 2(1) are met in relation to the transaction on 2 June 2025, the purchase is treated as a non-resident transaction and the SDLT return is completed on the basis that the surcharge is due.
Amendment of return where individual becomes UK resident after return delivered – para 19 Sch 9A FA03
Where the assumption in paragraph 18(2) applies to the completion of a SDLT return and the individual or individual purchasers subsequently become UK resident under paragraph 4(1), the purchasers are entitled to claim a refund of the surcharge paid.
The refund is claimed by amending the SDLT return to take account of the fact that the transaction is ultimately not liable to the surcharge. This can be done at any time before the end of the period of two years beginning with the day after the effective date of the transaction (paragraph 19(2)). Such amendments do not need to be accompanied by the documents set out at paragraph 6(2A) Sch 10 FA03 (paragraph 19(3)), i.e. the contract for the land transaction and the instrument (if any) by which that transaction was effected.
It is important to note that where the chargeable transaction has more than one purchaser, all of the purchasers must be individuals who are UK resident in relation to the transaction under paragraph 4, although the continuous 365-day period in which 183 days must be spent in the UK can be different for each purchaser. A refund may only be claimed once all purchasers have obtained UK resident status in relation to the transaction. See SDLTM09880 for more details of the paragraph 4 residence rule and examples of how this applies to multiple purchasers.
General guidance on SDLT returns, amendments and refunds can be found here.
Example
Continuing the example above, Mohammed becomes UK resident in relation to the transaction after the effective date of the transaction. He has until 1 June 2027 to amend the SDLT return to notify HMRC that the transaction is ultimately not liable to the surcharge and apply for a refund of the 2% surcharge paid.