Don’t run out of time to pay your SDLT bill

Property / 18 February 2019

The deadline for paying Stamp Duty Land Tax (SDLT) on property transactions will reduce from 30 days to 14 days on 1 March 2019.

This means that buyers and tenants will have a much shorter timescale in which to file their SDLT returns and pay any SDLT owing to HMRC before incurring a fixed £100 penalty and subsequent interest.

SDLT is payable on most freehold or leasehold purchases of property located in England where the value of the transaction exceeds a certain amount.  SDLT may also be payable on the grant, surrender or variation of a lease.  The deadline for filing the SDLT return and paying the tax runs from the ‘effective date’ of the transaction, usually the date of completion.

Reducing the filing and payment window to 14 days makes the timescale for getting the right paperwork and funds in place extremely tight.  This is particularly so for complex commercial property transactions, where it can be tricky to prepare SDLT returns accurately in advance of a projected completion date.  Sometimes the correct SDLT figure cannot be calculated until the very last minute.

On the upside, the 30-day deadline for making deferred or contingent applications to pay SDLT (on a prospective overage payment, for example) isn’t changing.  Neither are the Land Transaction Tax filing and payment deadlines for properties in Wales, which will remain at 30 days.

Most property buyers and tenants rely on their solicitors or accountants to prepare SDLT returns and arrange SDLT payments on their behalf. However, SDLT is a self-assessed tax, meaning it is the individual party’s responsibility to ensure the information on their SDLT return is correct.  From 1 March, therefore, parties will need to act promptly when asked to approve and sign their SDLT returns and transfer SDLT funds, to avoid missing the 14-day deadline and facing an automatic £100 fine.

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