Skip to content

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

Orchard Ltd takes a new non-residential lease for a premium of £260,000. The net present value of the rent is £200,000. Premium rates are 0% up to £150,000, 2% from £150,001 to £250,000 and 5% above £250,000. Rent NPV is taxed at 0% up to £150,000 and 1% above. What is the total SDLT?

The total SDLT is £3,000. The premium produces £2,500 (2% on £100,000 and 5% on £10,000 above £250,000). The rent NPV of £200,000 exceeds the £150,000 band by £50,000, giving £500 at 1%. Both elements must be added together.

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

Explanation

On the premium, 2% of £100,000 is £2,000 and 5% of £10,000 is £500, giving £2,500. On the rent, the NPV of £200,000 less £150,000 is £50,000, and 1% of this is £500. The total is £3,000. £2,500 ignores the rent element, and £4,500 wrongly charges 1% on the whole NPV (£2,000).

Did you get it right without looking?

One question tells you little. A timed set on Stamp taxes (stamp duty, stamp duty reserve tax and stamp duty land tax) shows your real accuracy, how long you take and where you lose marks.

Practise Stamp taxes (stamp duty, stamp duty reserve tax and stamp duty land tax)Free diagnostic mock

More Stamp taxes (stamp duty, stamp duty reserve tax and stamp duty land tax) questions