Stamp duty budget

marksmen10

We are currently moving house and are buying / selling. We are not far from exchanging contracts. Would any changes to stamp duty in the upcoming budget affect our transaction or should we be protected as it's in progress? Thanks Mark.

user1977

Being "in progress" is legally meaningless - if you've exchanged before any Budget announcements then (generally!) the rules which applied at the point of exchange will apply to your transaction.

EssexHebridean

Yes - when making an SDLT submission two dates are asked for - the completion date which is mandatory to include, but also the contract date - which in most cases is the date of exchange. This is designed to get around issues like SDLT rules changing between exchange and completion. It's not absolutely cast iron, but I would be VERY surprised if any Chancellor would put in place a change to SDLT which could potentially leave people in breach of an obligation to complete. 

TheJP

user1977 said:

Being "in progress" is legally meaningless - if you've exchanged before any Budget announcements then (generally!) the rules which applied at the point of exchange will apply to your transaction.

Not sure that is true, surely you need to complete before any changes in gov come about to continue in past regs.

user1977

TheJP said:

user1977 said:

Being "in progress" is legally meaningless - if you've exchanged before any Budget announcements then (generally!) the rules which applied at the point of exchange will apply to your transaction.

Not sure that is true, surely you need to complete before any changes in gov come about to continue in past regs.

No, there are always transitional arrangements which apply. Otherwise what do you think would happen if you are stuck in a contract to buy but now can't afford the new rate of stamp duty?

Bookworm105

legalisation defines the effective date for SDLT as the completion date, not the contract exchange date. 

SDLTM07600 - Scope: When is Stamp Duty Land Tax (SDLT) chargeable: Effective date of a transaction FA03/S119 - HMRC internal manual - GOV.UK


historically however when budgets change tax rules there is normally a transition period allowed for contracts in progress at the budget date. Contract exchange date may therefore be used in that circumstance to demarcate the cutoff point of old and new rules.

user1977

Bookworm105 said:

there is no ambiguity about this at all
legalisation defines the effective date for SDLT as the completion date, not the contract exchange date. 

SDLTM07600 - Scope: When is Stamp Duty Land Tax (SDLT) chargeable: Effective date of a transaction FA03/S119 - HMRC internal manual - GOV.UK

The "effective date" isn't necessarily the reference point for which rates/bands/reliefs apply to the transaction though.

For example, here's the handbook page mentioning transitional arrangements for the abolition of multiple dwelling relief (from the March 2024 Budget): SDLTM29902 - Abolition of multiple dwellings relief for SDLT (01 June 2024): Exchange of contracts on or before 6 March 2024 - HMRC internal manual - GOV.UK (www.gov.uk)

Bookworm105

user1977 said:

Bookworm105 said:

there is no ambiguity about this at all
legalisation defines the effective date for SDLT as the completion date, not the contract exchange date. 

SDLTM07600 - Scope: When is Stamp Duty Land Tax (SDLT) chargeable: Effective date of a transaction FA03/S119 - HMRC internal manual - GOV.UK

The "effective date" isn't necessarily the reference point for which rates/bands/reliefs apply to the transaction though.

For example, here's the handbook page mentioning transitional arrangements for the abolition of multiple dwelling relief (from the March 2024 Budget): SDLTM29902 - Abolition of multiple dwellings relief for SDLT (01 June 2024): Exchange of contracts on or before 6 March 2024 - HMRC internal manual - GOV.UK (www.gov.uk)

I note you deleted the rest of my comment which mentioned transition periods and a budget  

user1977

Bookworm105 said:

user1977 said:

Bookworm105 said:

there is no ambiguity about this at all
legalisation defines the effective date for SDLT as the completion date, not the contract exchange date. 

SDLTM07600 - Scope: When is Stamp Duty Land Tax (SDLT) chargeable: Effective date of a transaction FA03/S119 - HMRC internal manual - GOV.UK

The "effective date" isn't necessarily the reference point for which rates/bands/reliefs apply to the transaction though.

For example, here's the handbook page mentioning transitional arrangements for the abolition of multiple dwelling relief (from the March 2024 Budget): SDLTM29902 - Abolition of multiple dwellings relief for SDLT (01 June 2024): Exchange of contracts on or before 6 March 2024 - HMRC internal manual - GOV.UK (www.gov.uk)

I note you deleted the rest of my comment which mentioned transition periods and a budget  

No, you added to it while my post was being composed....