In the 2018 Budget, the government announced plans to consult on a new 1% SDLT surcharge on non-UK residents buying residential property in England and Northern Ireland.
The consultation document has now been published. The consultation will run until 6 May. The surcharge will be legislated for in a future Finance Bill. Key features of the proposed regime are as follows:
- The surcharge will be an addition of 1% to all existing rates for the purchase or letting of dwellings by a non-UK resident.
- Although the surcharge only applies to dwellings in England and Northern Ireland, the test for whether it applies will be based on residence of the purchaser in the UK as a whole.
- An individual will be treated as non-UK resident if he spent fewer than 183 days in the UK in the 12 months ending with the effective date of the purchase.
- However, an individual who has paid the surcharge will be eligible for a refund if he spends 183 days or more in the UK in the 12 months following the effective date. The refund must be claimed by amendment of the Land Transaction Return within the period of two years following the initial filing date.
- Where there are joint purchasers, the surcharge will apply if any of the purchasers are non-UK resident.
- The surcharge will also apply to non-UK resident entities such as corporate bodies, partnerships and trusts. It will also apply to UK resident close companies under the control of one or more non-UK resident persons.