Positive changes to HMRC’s Stamp Duty manuals

by Ranjan Bhattacharya

19:00 PM, 14th December 2020
About a month ago

Positive changes to HMRC’s Stamp Duty manuals

Make Text Bigger
Positive changes to HMRC’s Stamp Duty manuals

For individual landlords and relatively new Partnerships, the changes to HMRC’s manuals could be very welcome news.

The 3% additional rate does not apply to residential properties if a property rental business has a commercial element, e.g. flats over a shop or any other commercial property.

Together with the Chancellors Stamp Duty incentive on transaction under £500,000 until March 2021 and Multiple Dwellings Relief which applies SDLT to the average values of dwellings in property businesses, it is now viable for more landlords to consider incorporation than ever before.

The video below was filmed immediately after HMRC updated their manuals and includes a whole host of tips to take maximum advantage of the changes, even if your rental property business doesn’t currently include any commercial property elements.

EDITORS UPDATE

WORKED EXAMPLE

5 residential properties worth £600,000 each AND

5 more residential properties worth £400,000 each

Owned and operated as a full time rental property business by a sole owner.

POTENTIAL OUTCOMES

SDLT if this business is incorporated pre or post 31st March 2021 and without claiming MDR = £239,500

SDLT if this business is incorporated pre 31st March 2021 and where MDR is claimed = £150,000

SDLT if this business is incorporated pre 31st March 2021 and where MDR is claimed AND where the owner acquires a £20,000 chip shop investment property pre-incorporation (new rules) = £50,957

Therefore, as a result of buying the chip shop for £20,000 pre-incorporation and incorporating his business prior to 31st March 2021, this landlord saves £99,043

in SDLT when compared to the best case scenario before the re-write of HMRC’s SDLT manuals and the removal of the Chancellors incentive.

WARNING – if the same transaction completes after 31st March 2021 the SDLT would be £151,000

Form To Book A Tax Planning Consultation

Consultations include new client compliance checks, fact find via email with complimentary software, expert analysis, a detailed written report and recommendations and a recorded video conference with your Property118 Consultant and our Hon. Legal Counsel, which your existing advisers are welcome to participate in. All consultations are confidential and you will be provided with a copy of the recording of the video conference. We GUARANTEE total satisfaction or a full refund.
  • IMPORTANT

    Please note that from January to April, the diaries of our consultants and barristers are usually fully booked two to four weeks ahead.
  • Please provide an overview of your circumstances and what you are looking to achieve.

 


Share this article

Twitter Facebook LinkedIn

Can I resolve noisy neighbour issue for my tenant?

Smart Property Company Structures

Smart Property Company Structures

Landlord Incorporation Specialists

Landlord Incorporation Specialists

Incorporation relief and latent gains explained

Incorporation relief and latent gains explained

The optimal ownership structure for UK landlords

The optimal ownership structure for UK landlords

Incorporating your property portfolio without having to refinance

Incorporating your property portfolio without having to refinance

Landlord Incorporation Strategies – Update for 2020

Landlord Incorporation Strategies – Update for 2020

Capital Account Restructure – Case Study

Capital Account Restructure – Case Study

What Does “Washing Out CGT On Incorporation” Actually Mean?

What Does “Washing Out CGT On Incorporation” Actually Mean?

Stamp Duty when transferring the ‘whole business’ of a Partnership into a Limited Company

Stamp Duty when transferring the ‘whole business’ of a Partnership into a Limited Company

Software to analyse the viability of transferring a property rental business into a Limited Company

Software to analyse the viability of transferring a property rental business into a Limited Company

Inheritance tax and legacy planning for property company owners

Inheritance tax and legacy planning for property company owners

HMRC Internal Manuals ‘Landlord Incorporation’

HMRC Internal Manuals ‘Landlord Incorporation’

On-demand webinar explaining the uses of Limited Liability Partnerships “LLP’s” for landlord tax planning

On-demand webinar explaining the uses of Limited Liability Partnerships “LLP’s” for landlord tax planning

Guide for landlords on forming an LLP for property investment

Guide for landlords on forming an LLP for property investment

LLP structure reduces landlords tax bill by 85% – CASE STUDY

LLP structure reduces landlords tax bill by 85% – CASE STUDY

Partnership taxation and associated rules

Partnership taxation and associated rules

Business continuity and succession planning for landlords

Business continuity and succession planning for landlords

Property valuations for tax planning purposes cost just £19.95 each

Property valuations for tax planning purposes cost just £19.95 each

Hybrid Tax Structure – Landlords BEWARE!

Hybrid Tax Structure – Landlords BEWARE!

Tax Planning Bodge Jobs – Limited Liability Partnerships “LLP’s”

Tax Planning Bodge Jobs – Limited Liability Partnerships “LLP’s”

Landlords Tax Planning Bodge Jobs – inter company lending

Landlords Tax Planning Bodge Jobs – inter company lending

Book A Consultation

Book A Consultation

A Landlord’s Tax Planning Disaster

A Landlord’s Tax Planning Disaster

Just say NO to tax avoidance “schemes”

Just say NO to tax avoidance “schemes”

Using a property investment LLP for school fees planning purposes

Using a property investment LLP for school fees planning purposes

LBTT for sole owner landlord incorporation in Scotland

LBTT for sole owner landlord incorporation in Scotland

Stamp Duty relief on properties split into multiple dwellings

Stamp Duty relief on properties split into multiple dwellings

Expat Landlords Tax Planning Opportunity

Expat Landlords Tax Planning Opportunity

Open A Business Bank Account In Minutes

Open A Business Bank Account In Minutes

Why we don’t apply a ‘one-size-fits-all’ approach to landlord tax planning

Why we don’t apply a ‘one-size-fits-all’ approach to landlord tax planning

Four Property Investment Structures – Video Interview

Four Property Investment Structures – Video Interview

Landlord incorporation and tax planning presentation

Landlord incorporation and tax planning presentation

Message To Estate Agents and Mortgage Brokers

Message To Estate Agents and Mortgage Brokers

UK GOVERNMMENT 2021 CGT REVIEW PROPOSALS

UK GOVERNMMENT 2021 CGT REVIEW PROPOSALS

The Landlords Union

Become a Member, it's FREE

Our mission is to facilitate the sharing of best practice amongst UK landlords, tenants and letting agents

Learn More