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

Tamsin Ltd takes a new lease of an office building from a landlord. It pays a premium of £300,000 and the rent is a nominal amount, so the SDLT on the rent is nil. Using the non-residential rates of 0% up to £150,000, 2% from £150,001 to £250,000 and 5% above £250,000, what is the SDLT on the premium?

The SDLT on the premium is £4,500. Non-residential rates apply in slices: nothing on the first £150,000, 2% on the next £100,000 (£2,000) and 5% on the final £50,000 (£2,500). Applying a single rate to the whole premium is wrong.

  1. A£4,500Correct
  2. B£15,000
  3. C£6,000
  4. D£7,500

Explanation

The rates are applied in slices. The first £150,000 is taxed at 0%. The next £100,000 at 2% gives £2,000. The final £50,000 at 5% gives £2,500. The total is £4,500. £15,000 wrongly applies 5% to the whole premium, and £6,000 wrongly applies 2% to the whole premium.

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