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2% SDLT Surcharge For Non-UK Resident

Being introduced in 2021 ...

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Posted by Helen Beaumont on 29/07/2020 @ 8:00AM

Stamp Duty Land Tax for any non-UK residents is paid at the same rate as is paid by UK residents. However, Chancellor Rishi Sunak announced that SDLT for anyone from overseas will include an additional 2% surcharge from the 1st April 2021 ...

The new 2% SDLT surcharge for non-UK residents will be introduced in April 2021!

The new 2% SDLT surcharge for non-UK residents will be introduced in April 2021!

copyright: dudlajzov / 123rf

SDLT only applies to residential property, in England and Northern Ireland which means the charge doesn't apply in Scotland or Wales. These countries are very likely to adopt the non-UK surcharge when it comes into force in the other two countries.

The new SDLT surcharge for non-UK residents will apply as follows:

  • those individuals with fewer than 183 days in the UK in the 12 months ending with date of purchase

  • a refund claim will be available if they then spend 183 days in the UK in the following 12 months

  • there will be separate residence tests for companies, trusts and other buyers

  • tax residents of the UK will not therefore pay the stamp duty surcharge

The SDLT surchage for non-UK residents will be 2% above the residential rates, which includes the higher rate for additional dwellings and companies. Also included are the 15% rate and the first-time buyers rate.

This is in addition to the 3% higher rate surcharge most non-UK residents already pay as they own one or more residential properties outside the UK. This means Stamp Duty Land Tax for non-UK residents will be at least 17% of the property purchase price. The Government is consulting on legislation and and is predicted to announce it in an Autumn Statement.

The SDLT surcharge is designed to deter foreign buyers from pushing the UK property prices up. However, there is a blind spot here as if a non-UK resident purchases then 'flips' the property to a UK resident, no SDLT surcharge will be payable as the flitter gets sub-sale relief.

"This behaviour is one fact that has recently increased property prices, but is largely ignored by the legislation!"

The Stamp Duty Land Tax surcharge for non-UK residents now introduces the concept of residence which is currently based on the location of the actual property. Yet, unless the rules about when SDLT is due are changed, this isn't likely to affect non-UK flippers very much at all.

Until next time ...



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About Helen Beaumont ...


Helen brings the personal tax planning experience of the top 20 tax companies to Essendon. Formerly of MacIntyre Hudson (with 45 offices nationwide), Helen worked at Chancery for more than 10 years before joining Essendon as the personal tax specialist.

Tax Planning can make a considerable difference to your tax liability. Helen has specialist knowledge and experience in tax planning and uses every opportunity to minimise your tax bill is utilised. By analysing your investments, income, profit and expenditures, Helen will provide strategic tax planning expertise that could offer significant savings, whilst delivering clear, honest advice and guidance.

When Helen is not at Essendon she spends time with her young son and likes going on long walks with the family dog.