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ACCA Strategic Professional · Advanced Taxation (UK) · Stamp taxes (stamp duty, stamp duty reserve tax and stamp duty land tax)

Brightway Ltd buys the freehold of a warehouse in England for £400,000 (non-residential, no VAT). Using the non-residential SDLT rates of 0% to £150,000, 2% from £150,001 to £250,000 and 5% above £250,000, what is the SDLT payable?

SDLT is £9,500. Non-residential rates apply slice by slice: nothing on the first £150,000, 2% on the next £100,000 (£2,000), and 5% on the remaining £150,000 (£7,500). The total is £9,500.

  1. A£9,500Correct
  2. B£20,000
  3. C£7,500
  4. D£12,500

Explanation

The rates apply to slices of the price: nil on the first £150,000, 2% x £100,000 = £2,000, and 5% x £150,000 = £7,500. The total is £9,500. £12,500 wrongly applies 5% to everything above £150,000 and skips the 2% band.

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