The rules surrounding Stamp Duty Land Tax (SDLT) are undoubtedly complicated and no one wants to get caught out – hence the need to make sure you avoid some common pitfalls as well as the associated penalties.
There are two key times when it is particularly important to watch your step:
What to do
If you’ve had a rent review, check to see if this affects your SDLT liability and avoid an out-of-the-blue letter from HMRC.
There are also HMRC rules about rent reviews outside the five year window and which have determined an ‘abnormal rent increase’. For example, if the initial rent was low – thus attracting lower SDLT liability – and then shoots up, HMRC will treat this as a new lease and SDLT will be due within 30 days of the date of the rent increase.
If your lease has expired and you are in a period of ‘holding over’, or are soon to be in a ‘holding over’ position, it may be wise to take professional advice to avoid late filing penalties.
When a SDLT return is not filed when due then an immediate £100 penalty may be payable plus interest on the amount due and the penalty increases the longer the SDLT return is not filed.
For help and advice please contact Wards Solicitors’ Commercial Property team.
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