Stamp duty land tax payment period halved from March 2019

Commercial and residential property owners need to be aware the government is reducing the amount of time allowed to pay stamp duty land tax from 2019.

The payment window for SDLT and for completion of tax returns is being cut from 30 days to 14 days, and will apply from 1 March 2019. This is earlier than the start of the usual tax year from 1 April 2019 so this needs to be taken into account.

The change will be introduced via a statutory instrument which is now available for final review (Stamp Duty Land Tax (Administration) (Amendment) Regulations 2018) and will take effect on 1 March 2019. It would reduce the time limit to make a stamp duty land tax (SDLT) return and pay the tax due.

It would also reduce the number of questions on the SDLT return. Most of the draft legislation relating to the reduction in the time limit to make a SDLT return and pay the tax due will be in Finance Bill 2018-19.

The measure was first announced at Autumn Budget by George Osborne when he was Chancellor and was supposed to come into effect from tax year 2017-18. It was met with strong opposition at the time and was subsequently delayed until 2019.

The government claimed that HMRC needed enough time ‘to address the issues which arose from the consultation’.

HMRC received over 85 written responses to the initial consultation in 2016, mainly from solicitors who were concerned about the amount of data required in the SDLT return in cases where the purchase of land involved commercial leases or tenancies.

Respondents advised that in these cases, there would be practical difficulties in trying to comply with the reduced time limit for making the SDLT return.

“The improvements that are being made to the SDLT return, in particular, reducing the amount of information required in the return, will help make compliance with the new time limit easier,” HMRC stated.

HMRC is also looking for feedback on a proposed schedule of tenancies that would replace the two schedules of tenancies currently in the Stamp Duty Land Tax Manual. See https://www.gov.uk/hmrc-internal-manuals/stamp-duty-land-tax-manual.

The comment period on the draft legislation closes on 23 November 2018.

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