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ACCA Strategic Professional · Advanced Taxation (UK) · Taxes applicable to a given situation or course of action and their impact

Bella is buying a freehold non-residential building for £320,000, and the purchase is subject to stamp duty land tax at the rates in the examinable tax tables, applied on a slice basis. What is the stamp duty land tax payable?

The stamp duty land tax is £5,500. Nothing is charged on the first £150,000, 2% applies to the next £100,000 giving £2,000, and 5% applies to the final £70,000 giving £3,500. Applying 5% to the whole price would give £16,000.

  1. A£16,000
  2. B£5,500
  3. C£8,500Correct
  4. D£3,500

Explanation

Nothing is due on the first £150,000. The next £100,000 at 2% gives £2,000. The remaining £70,000 above £250,000 at 5% gives £3,500. The total is £5,500. Of the options, £5,500 is correct and so the key must be that figure.

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