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England and Northern Ireland

SDLT holiday 

On 8 July 2020, the Chancellor announced an immediate Stamp Duty Land Tax (SDLT) holiday until April 2021 on the first £500,000 paid for a main home in England or Northern Ireland.  This has resulted in SDLT savings of £15,000 on homes costing £500,000 or more. The Government had originally stated that this holiday would not be extended. However, following lobbying by stakeholders, the Government has agreed to extend the £500k holiday until 30 June 2021.

In addition, it was announced in the Budget that the nil rate band will not immediately revert to the previous level of £125k from 1 July 2021; instead the nil rate band will be maintained at £250k until 30 September 2021, after which it will revert to £125k.

Therefore, instead of an abrupt end to the now extended holiday on 30 June 2021 that currently provides up to a £15,000 stamp duty saving, there will be a further three months from 1 July to 30 September with a reduced holiday saving of up to £2,500.

The UK average house price is £250k, so this policy takes an average home out of the stamp duty system for the next 6 months. Given the announcements on stamp duty and mortgage guarantees, as well as ongoing positive trends in the housing market, the OBR now expects prices to rise by an average of 5% in 2021, sharply revising up its November 2020 forecast 9 percentage points.

It should not be forgotten that when the stamp duty holiday, and the increased nil rate band end, first time buyers will continue to benefit from a SDLT exemption for properties below £300,000 and from a partial relief on purchases up to £500,000. The stamp duty holiday was a benefit to all home buyers; however, arguably the end of the holiday and return of the first time buyers relief will put first time buyers back in an advantageous position in the market.

The existing 3% additional dwelling supplement for buyers of second homes, corporate buyers and other property investors will remain. Further, the additional 2% foreign buyers surcharge will apply to residential property acquisitions from April 2021 (see further below).


The government will legislate for powers to create ‘tax sites’ in Freeports in Great Britain; it will bring forward legislation to apply in Northern Ireland at a later date.

Full relief from Stamp Duty Land Tax will be available on the purchase of land or property within Freeport tax sites where it is used for a qualifying commercial purpose. The relief will be available until 30 September 2026.

Non-UK resident Stamp Duty Land Tax surcharge 

As previously confirmed, a 2% SDLT surcharge will apply to non-UK residents purchasing residential property in England and Northern Ireland from 1 April 2021.

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%. 

A new residence test has been introduced for the purpose of the charge, which will apply in addition to the existing residential SDLT rates of up to 15%, so that the top SDLT rate for non-residents could be as much as 17%.

It will apply to residential properties such as apartments or houses (not including student accommodation), but will not apply to non-residential or mixed use land. It will not therefore apply where six or more dwellings are acquired and the purchaser elects to treat the acquisition as non-residential and so apply the 5% SDLT rate.

Where there are a number of joint purchasers, the surcharge will apply where only one of them is non-UK resident. An exception is where the joint purchasers are a married couple or civil partners where one spouse or civil partner is UK resident, and the other non-UK resident. In this case, the purchase is to be treated as an acquisition by a UK resident purchaser. 

The basic rule is that an individual will be UK resident if they are present in the UK for at least 183 days during the period beginning 364 days before the date of transaction and ending 365 days after the date of the transaction. 

However, there are certain special cases where it is an individual purchaser’s residence in the 12 months before the transaction which determines their residence, including where the purchasers also include a partnership, a company, or a unit trust. 

This is a new concept of residence, and so previous analysis undertaken based on the usual UK income and gains tax residence rules cannot be relied on. 

Company residence is broadly determined according to existing direct tax rules, but with some exceptions. A company will be non-UK resident if either:

- It is not UK resident for the purposes of UK corporation tax (broadly UK incorporated or centrally managed and controlled in the UK and not resident outside of the UK as a result of double tax treaty); or

- It is a UK tax resident close company (other than an OEIC or a UK REIT) which is controlled by non-residents (or UK residents treated as non-resident under these rules).

A company does not include a partnership or, for this purpose, a unit trust. Consequently it is the residence position of the partners and the trustees of the unit trust schemes that will be relevant for these entities. 

Timely consideration of the rules will be needed given that the filing deadline for the SDLT return and payment is 14 days from the date of completion for most residential purchases. 


The Scottish Budget was published on 28 January 2021. The Scottish Government announced the following updates to the Land and Buildings Transaction Tax (“LBTT”) regime:

  • The LBTT holiday was introduced on 15 July 2020 and provided for a nil-rate band on the first £250k of chargeable consideration, resulting in savings of up to £2,100. The Budget confirmed that the holiday will end as planned on 1 April such that from this date, the nil rate band will revert to £145k. 
  • First Time Buyers Relief, which provides for a nil-rate band on the first £175k of chargeable consideration, generating a maximum tax saving of £600, remains. 
  • The Additional Dwellings Supplement ("ADS") remains at 4% but there will be consultations on reforming the ADS early in the next Scottish Parliament, particularly with respect to extending the length of time within which a previous main residence must be sold for an ADS repayment to be claimed.
  • The non-residential rates of LBTT remain unchanged. 


The Welsh Government’s draft budget for 2021-22 was announced on Monday 21 December 2020 by the Minister for Finance and Trefnydd. It included changes to the rates and bands to be applied to Land Transaction Tax (“LTT”) and they became effective from 22 December 2020. The final budget was delivered on 2 March 2021. 

The Welsh Government also extended their stamp duty holiday, which increased the LTT threshold for main homes from £180,000 to £250,000, to 30 June 2021. The other LTT changes were as follows:

  • The higher residential rates were increased by 1 percentage point to a minimum of 4% (the rates are graduated thereafter such that 1% is added to each consideration “band”). The tax bands themselves remain unchanged. There was a transitional rule in place for those who exchanged contracts prior to 22 December 2020 (i.e. where contracts were exchanged but completion had not taken place prior to this date, the LTT rates applied were net of the 1% increase).
  • The zero rate band for non-residential property transactions in respect of consideration given other than rent and the consideration which consists of rent was increased from £150,000 to £225,000, a 50% uplift. The tax saving generated is up to £750. The Welsh government has not stated an end date for this measure and so this is presumed to be a permanent change until further notice is provided.

If you would like to discuss any of these measures, please get in touch with your usual PwC tax contact.