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Advanced Taxation (UK) · Alternative ways of achieving personal or business outcomes and their tax consequences

Property Transactions: SDLT, Stamp Duty and VAT Considerations

Updated 11 October 2026 · Fact-checked

SDLT is a slice-based tax on non-residential land: 0% to £150,000, 2% on £150,001 to £250,000 and 5% above. Stamp duty is 0.5% on share purchases. VAT registration is compulsory above £90,000 of taxable turnover, with deregistration possible below £88,000. You compare options by computing each tax.

Understand Property Transactions: SDLT, Stamp Duty and VAT Considerations

Three different taxes appear when you buy, sell or restructure. Stamp duty land tax (SDLT) applies to purchases of land and buildings. Stamp duty applies to transfers of shares. VAT applies to taxable supplies made by a VAT-registered business. Examiners often set up a choice, such as buying a property or buying the company that owns it, and ask you to compare the taxes.

SDLT on non-residential property is paid by the buyer. The rates work like income tax bands. Each slice of the price is taxed at its own rate. You do not apply one rate to the whole price. The tax tables give the bands, so you do not need to memorise them, but you must apply them correctly.

Stamp duty on shares is a flat 0.5% of the price paid. It is also paid by the buyer. It applies to a transfer of shares, not to land. So buying land costs SDLT, while buying shares in a company that owns the land costs stamp duty instead. This difference drives many planning questions. The tax tables only give the rate, so state the buyer pays and say the duty is on the consideration.

VAT adds two decisions. First, a business must register when its taxable turnover goes above £90,000. It may deregister if turnover is expected to fall to £88,000 or less. Second, late VAT payment attracts penalties under the table in the tax rates. Voluntary registration can also be useful if the business makes mainly supplies to VAT-registered customers, because input VAT can be recovered. Always work from the facts given in the question.

Key rules to remember

SDLT on non-residential property
£1 to £150,000 at 0%; £150,001 to £250,000 at 2%; above £250,000 at 5%
Slice-based. Tax each slice of the price at its own rate, then add up. Buyer pays.
Stamp duty on shares
Stamp duty = 0.5% × price paid
Applies to transfers of shares. Paid by the buyer. Do not use it for land.
VAT registration limit
Register if taxable turnover exceeds £90,000
Use the limit given in the tax tables and the facts about turnover in the question.
VAT deregistration limit
Deregister if taxable turnover is expected to be £88,000 or less
Voluntary deregistration is a choice, so check input VAT recovery too.
Late VAT payment penalty
Up to 15 days: none; 16 to 30 days: 3%; over 30 days: 6% plus a daily penalty at an annual rate of 10%
Use the table in the exam and count the days late carefully.
VAT standard rate
Standard rate = 20%
VAT on a standard-rated net price is 20% of that price.

How to solve Property Transactions: SDLT, Stamp Duty and VAT Considerations questions

Use the same method for any question on property, share purchase or VAT choices.

  1. 1Identify what is being bought or sold: land, shares, or both. This decides which tax applies.
  2. 2Identify who pays. SDLT and stamp duty are paid by the buyer.
  3. 3For land, split the price into bands and apply 0%, 2% and 5% to each slice. Add the results.
  4. 4For shares, multiply the price by 0.5%.
  5. 5For VAT, compare taxable turnover with £90,000 for registration or £88,000 for deregistration.
  6. 6Consider recoverable input VAT and whether customers can recover VAT charged.
  7. 7Compare the total cost of each option and state a clear recommendation.
  8. 8Show all workings and round to the nearest £ as the supplementary instructions say.

Quickest way: Three-line check

When to use it: Use when time is short and the question asks for the tax cost of a purchase or a VAT status decision.

  1. Write the asset type: land means SDLT, shares mean stamp duty.
  2. Compute the tax: slice the SDLT bands or take 0.5% of shares.
  3. Compare against the VAT limit given and write one sentence of advice.

Common mistakes in Property Transactions: SDLT, Stamp Duty and VAT Considerations

  • Applying 5% to the whole price of a property.

    Students treat the bands like a single rate, as with a flat tax.

    Fix: Tax each slice only. The first £150,000 is at 0% and only the excess above £250,000 is at 5%.

  • Charging SDLT on a share purchase.

    The company owns land, so students think land tax applies.

    Fix: A share transfer is charged stamp duty at 0.5% of the price. SDLT applies only to a land transaction.

  • Confusing registration and deregistration limits.

    The two figures £90,000 and £88,000 look similar.

    Fix: £90,000 is for registration and £88,000 is for deregistration. Say which one you use.

  • Ignoring the seller and buyer roles.

    Students compute the tax but forget to say who bears it.

    Fix: State that the buyer pays both SDLT and stamp duty.

  • Misreading the VAT penalty days.

    Students apply a penalty when payment is only a few days late.

    Fix: No penalty applies up to 15 days late. Use 3% for 16 to 30 days and 6% plus the daily element above 30 days.

Worked examples

Example 1

A company buys a non-residential building for £400,000. Compute the SDLT payable.

Show the solution
  1. First £150,000 at 0%: £0.
  2. Next £100,000 (£150,001 to £250,000) at 2%: £2,000.
  3. Remaining £150,000 (£250,001 to £400,000) at 5%: £7,500.
  4. Total: £2,000 + £7,500 = £9,500.

Answer: SDLT is £9,500, paid by the buyer.

Example 2

An investor buys shares in a company for £300,000. A second option is to buy a building for £300,000. Compare the stamp taxes.

Show the solution
  1. Shares: stamp duty = 0.5% × £300,000 = £1,500.
  2. Building: first £150,000 at 0% = £0.
  3. Next £100,000 at 2% = £2,000.
  4. Remaining £50,000 at 5% = £2,500.
  5. SDLT total = £4,500.
  6. Difference = £4,500 − £1,500 = £3,000.

Answer: Stamp duty on the shares is £1,500 and SDLT on the building is £4,500, so the shares cost £3,000 less in stamp taxes.

Exam tips

  • Show the band workings for SDLT line by line so you earn method marks even if you slip on arithmetic.
  • State who pays each tax and the rate you use. Examiners credit both.
  • In planning questions, compare stamp taxes and also the wider tax effects before you recommend.
  • Check the VAT limits against the turnover facts, including expected future turnover, before you advise.
  • Use the tax tables. Do not rely on memory for rates.

Practice questions from Alternative ways of achieving personal or business outcomes and their tax consequences

Property Transactions: SDLT, Stamp Duty and VAT Considerations: frequently asked questions

What are the SDLT rates for non-residential property in ACCA ATX?

The tax tables give 0% up to £150,000, 2% from £150,001 to £250,000 and 5% above £250,000. The rates apply to each slice of the price. Compute each slice and add them.

When does stamp duty at 0.5% apply?

It applies to the transfer of shares at 0.5% of the price paid. The buyer pays it. It does not apply to land, which is charged to SDLT.

What is the difference between SDLT and stamp duty on shares?

SDLT is charged on land transactions using slice-based rates. Stamp duty is charged on share transfers at a flat 0.5%. The asset being bought decides which one applies.

What are the VAT registration and deregistration limits?

The tax tables give £90,000 for registration and £88,000 for deregistration. Compare these with the taxable turnover facts in the question. Your advice should also consider input VAT.