30 SECOND TAX SPEED READ - SDLT: FOREIGN PURCHASER 1% SURCHARGE
The closing date for HMRC’s consultation on the introduction of an extra 1% surcharge for non-resident purchasers, is fast approaching on 6thMay 2019.
The proposal is that all Non-UK resident purchasers of residential property in England and Northern Ireland will pay an additional 1% surcharge on top of what would otherwise be their rate of SDLT based on the current SDLT rules. For example, if a purchaser was already subject to the 3% surcharge by virtue of purchasing an ‘additional property’, the 1% surcharge would apply on top.
The majority of reliefs are intended to remain available, with the 1% surcharge being added afterwards. So, for example, where a purchaser benefits from First Time Buyer Reliefs (FTBR) on £300K purchase, which would currently result in no SDLT due, the 1% as proposed would apply after FTBR to give a £3000 SDLT liability.
We await HMRC response to the consultation, later in the year.
Monitor the situation and keep Non-resident clients updated.