31 October 2024 Stamp Duty Land Tax update

It's Halloween, and there's nothing scarier than 

All jokes aside, changes to stamp duty can bring significant challenges to conveyancing, from the need for immediate updates in calculations to managing client expectations and concerns, especially when transactions are already complex and time-sensitive without the addition of a stamp duty change!

Smokeball has already updated our stamp duty calculations and transitional matters to help make this change as smooth as possible for you.

Context of SDLT update

The Autumn Budget 2024 includes changes to England and Northern Ireland Stamp Duty Land Tax. This includes an increase to the higher rates on additional dwellings and to the single rate of tax on purchases by non-natural persons, from 3% to 5% points above the standard residential rates of SDLT.

Who is likely to be affected?

• Individuals purchasing additional residential property, such as second home or buy-to-let properties
• Companies and other non-natural persons purchasing residential property
• Conveyancers and other professional who advise on such transactions

See: Stamp Duty Land Tax — increase to the higher rates on additional dwellings and to the single rate of tax on purchases by non-natural persons

When will this come into effect?

The new SDLT rates will apply from 31 October 2024. Where contracts are exchanged prior to 31 October 2024 but complete or are substantially performed on or after that date, transitional rules may apply.

See: Stamp Duty Land Tax — increase to the higher rates on additional dwellings and to the single rate of tax on purchases by non-natural persons

Within the Autumn Budget 2024 it was stated that: "Those who exchanged contracts prior to 31 October 2024 are not affected by this rate increase".

See: Autumn Budget 2024

Changes in Smokeball

Smokeball Stamp Duty Land Tax calculations have already been updated with the new rates.

• If your matter has a Completion Date on or before 30/10/2024 then the old SDLT rates will be used.
• If your matter has a Completion Date on or after 31/10/2024 then the new SDLT rates will be used.
• If your matter has an Exchange Date on or before 30/10/2024 and a Completion Date on or after 31/10/2024, you will see a checkbox for 'Transitional rules apply'.
  Select this checkbox to calculate stamp duty using the old SDLT rates if applicable, or leave deselected to calculate using the new SDLT rates:
  
• If your matter has no Exchange or Completion Date entered then it will use the new SDLT rates, so please make sure your key dates have all been entered correctly!

Remember that you can always override the Smokeball stamp duty calculation if you find a scenario that does not calculate as required. The override figure that you type into Stamp Duty Payable will be the amount that populates in your Completion Statement and other automated documents, and will be the figure used in all Completion calculations.