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Finance (No. 2) Bill 2020/21 published 11 March 2021  incorporates the legislation introducing a 2% SDLT surcharge on non-UK residents purchasing residential property in England and Northern Ireland from 1 April 2021. The Finance Bill makes certain changes from the draft legislation previously published.

The additional 2% SDLT will apply to both non-resident individuals and non-natural persons (e.g. companies, trusts, partnerships), and will apply in addition to the existing SDLT rates of up to 15%. 

The surcharge was only expected to apply to transactions comprising solely residential property, and not to mixed use land transactions (comprising both residential and non-residential property). Under the provisions in the Finance Bill, however, the surcharge can apply to mixed residential and non-residential transactions where multiple dwellings relief (MDR) is claimed in respect of the residential element.

Where six or more dwellings are acquired, the purchaser, therefore, needs to choose between treating the acquisition as non-residential and so applying the 5% SDLT rate, or claiming MDR but with addition of the 2% non-resident surcharge.

The Finance Bill also excludes from the charge leases with 7 or fewer years to run.