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The thorny issues of Stamp Duty Land Tax (SDLT) in relation to GP Practice property transactions.

What is SDLT and why is it relevant to GP Practices? Ten key points to note


In particular, you should be aware of the following key points:

  • SDLT is a tax paid by the purchaser of an interest in land in England, Wales (currently) or Northern Ireland.
  • There are several different rates and thresholds which determine the amount of SDLT payable on a transaction, depending on whether the property in question is classified as “residential”, “commercial” or “mixed use” and whether a  company is buying the property.
  • It is the current or previous use of a property that determines the basis on which SDLT is payable.  A residential property which is purchased with the intention of converting it to a surgery is still classed as residential for SDLT purposes.
  • It is a misconception that SDLT only needs to be thought of when a freehold or leasehold interest is being purchased. SDLT needs to be considered whenever an interest in property is being created, transferred, varied surrendered or assigned. For example where there is a surrender or assignment of a lease or a lease is being held over or where easements or rights of way are being created, varied or assigned. SDLT may also be payable in certain circumstances where a property is transferred into a partnership by one of the partners or vice versa and on certain retirements and admissions.
  • SDLT may be payable where a partnership incorporates (transfers its business to a limited company), although there are circumstances where it may not, and professional advice should be sought.
  • Where no SDLT is payable, it may still be necessary to file an SDLT return – for example the grant of a lease for more than 7 years where certain condition are met. The return (and any payment) must generally be done within 30 days of the completion of the transaction, although in certain circumstances SDLT can become due sooner.
  • There are certain exemptions and reliefs available in relation to SDLT, which may mean that it is not payable in relation to a transaction or that a return is not required.  You should seek advice as to whether any of these may apply.
  • SDLT is generally payable on the purchase price of a property, but there are certain circumstances where, for SDLT purposes, the transaction is deemed to have taken place at market value, and SDLT is payable on that value.
  • In the case of leases, a variation of the rent in the first five years of its term may give rise to the requirement for a further SDLT return to made and, if necessary, the payment of more SDLT.
  • Although SDLT has been around for over 10 years now, it is often poorly understood and professional advice should always be sought on the SDLT implications of property transactions or business transactions where a property is a major asset.

If you require any advice as to how SDLT may affect you or your Practice, please do not hesitate to contact a member of our specialist GP Practices team or, in particular, Melanie List, Director, Tax and GP Business Practice Teams.

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