Stamp duty for overseas buyers of London homes

Which tax applies?

Stamp Duty Land Tax applies to relevant purchases in England and Northern Ireland. Scotland and Wales have different property transaction taxes. The amount depends on the price, the property, the buyers and the rules in force at the transaction’s effective date, usually completion.

Your conveyancer or tax adviser can calculate the position, submit the return and explain the deadline. This page does not calculate your liability.

Further reading: GOV.UK: SDLT overview · HMRC: residential rates

The non-UK resident question

HMRC says a 2 percentage point surcharge usually applies to a relevant residential transaction where a buyer is non-UK resident for SDLT. The test is specific to the transaction and differs from the ordinary tax residence test; nationality and visa status are not the deciding factors.

The detailed rules include presence in the UK, the relevant time period, multiple buyers and possible later claims. Keep accurate records of days in the UK and ask your adviser to apply the current rules to every buyer.

For a joint purchase, give the adviser the presence records and circumstances for every purchaser. HMRC’s rules for joint buyers are not answered by checking only the person supplying the deposit; the exact transaction and any exceptions matter.

Further reading: HMRC: non-UK resident rates and examples

Other rates and reliefs

Higher rates for additional residential properties may apply as well as the non-resident surcharge. Corporate buyers, joint purchasers and particular reliefs have their own conditions. A home being used by a child does not by itself establish the purchaser’s tax treatment.

Do not add a single percentage to the whole price without checking the applicable bands and conditions. Your adviser should work through the proposed price, ownership and existing property interests with you.

Further reading: HMRC: residential SDLT rates · HMRC: corporate bodies

Ask about the filing and any later claim

HMRC explains that a required return and payment are generally due within 14 days of the transaction’s effective date, usually completion. The effective date can be earlier if the contract is substantially performed before completion. Your conveyancer should confirm the deadline for your transaction and who will file and pay.

The detailed non-resident rules can allow a later claim in some circumstances where the required presence test is met. Do not assume a refund: retain travel records and ask a tax adviser about eligibility, evidence and the applicable deadline.

Further reading: GOV.UK: SDLT return and payment · HMRC: non-UK resident rules

Questions to take to your adviser

Provide the proposed completion date, each buyer’s identity and travel record, other property interests, proposed ownership and intended use. Ask which rates and reliefs apply, when the return and payment are due, and whether a later refund claim could be relevant.

Use the resulting figure in the purchase budget alongside legal, survey, finance and building costs. Rivermark’s buying service does not provide tax advice.