IR15
9 March 1999
STAMP DUTY RATES
The rates of Stamp Duty on transfers of property (excluding shares)
for more than #250,000 will be increased.
The new rates will be:
2.5 per cent where the price is more than #250,000 but not over
#500,000;
3.5 per cent where the price exceeds #500,000.
The Chancellor's proposal will apply to transfers on or after 16
March, except for transfers made in pursuance of a contract made on
or before 9 March.
There will be no change either to the #60,000 threshold, up to which
transfers are free of Stamp Duty; or to the 1 per cent rate which
applies to transfers between #60,000 and #250,000. The 0.5 per cent
rate of duty on transfers of shares is also unaffected by these
proposals.
DETAILS
The new scale of rates
1. Under the Chancellor's proposals the rates of duty will be:
1 per cent if the price is more than #60,000 but not more than
#250,000 - no change;
2.5 per cent if the price is more than #250,000 but not more than
#500,000;
3.5 per cent if the price is more than #500,000.
Each rate of duty applies to the whole price. So for example the
duty on the purchase of a property for #80,000 is #800; and a price
of #300,000 will attract duty of #7,500.
Leases
2. Stamp Duty on the assignment of an existing lease is charged on
the price in the same way as on the conveyance of a freehold.
3. Duty on the grant of a new lease is charged separately on the
premium, at the same rates as for a sale, and on the average annual
rent (the rate depends on the length of the lease). The new rates
will apply to lease premiums in the same way as to purchases. The
separate scale of rates of duty on rent will remain unchanged.
Other types of property
4. The present rates apply to documents transferring certain other
types of property, such as goodwill and patents, as well as land and
buildings. The new rates will apply to these transfers as well. And
the present rates of duty on transfers of shares and other securities
(normally 0.5 per cent) will remain unchanged.
Commencement date
5. On the basis that the necessary Budget Resolution is passed by the
House of Commons before 16 March, the new rates will apply to
transfer documents executed on or after 16 March. But if the
document is executed in pursuance of a contract made on or before 9
March (Budget Day) the present rates will apply instead. (In these
cases the Stamp Office may need to see the contract if the date of
the contract is not clear from the document itself.)
Agreements for lease
6. An agreement for lease is liable to Stamp Duty as if it were an
actual lease. But if a lease is subsequently granted which is in
conformity with the agreement, or which relates to substantially the
same property and term of years as the agreement, the duty on the
lease is reduced by the duty already paid on the agreement.
7. Where an agreement for lease has been made on or before 9 March,
but the lease granted as a result of the agreement is not granted
until 16 March or later, the old rate of duty will apply to the
agreement; and the lease itself will also be liable at the same rate
if the agreement constitutes a binding contract to grant the lease.
Any duty paid on the agreement will be credited against the duty on
the lease, if the necessary conditions in Section 75 Stamp Act 1891
are satisfied.
NOTES FOR EDITORS
1. The increase in Stamp Duty rates is expected to yield #270 million
in 1999-2000, #310 million in 2000-01, and #340 million in 2001-02.
The change is expected to affect about 50,000 transactions in
residential property and about 25,000 in land and commercial
property, in a full year.
INLAND REVENUE PRESS OFFICE
Media enquiries to: 0171 438 6692/6706/7327
(Out of hours: 0860 359544)
Non-Media enquiries to: 0171 438 6420/6425
(Office hours only)
For detailed enquiries about these Stamp Duty changes the Stamp Duty
Help Line is 0845 603 0135 (Office hours only)
Inland Revenue information is on the Internet:
www.inlandrevenue.gov.uk
# = pounds sterling
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