What is subject to Stamp Duty Land Tax

Most of us are aware that we pay Stamp Duty Land Tax (SDLT), or the regional equivalents, when we buy a property, but that is just the tip of the iceberg. For example, if you give something of value in exchange for land or property, it will also count towards the chargeable consideration and therefore the amount of SDLT payable.

As well as money, you can exchange property for: goods, works or services, release from a debt, or transfer of (taking on) a debt. Another example where a mix of money and other consideration is taken into account is when two people, who own a house together, then split up and one pays the other for their share of the equity and also takes on their outstanding mortgage liability.

The chargeable consideration includes anything paid for assets that form part of the land or property. These can include:

• buildings and structures that are part of the land, for example farm buildings

• fixtures and fittings, including bathroom and kitchen fittings

• intangible assets, for example the value of goodwill attached to the land

• the estimated value of a commitment to do work or services, for example a promise from the seller to repair the property.

• any VAT you pay on the transaction.

Chargeable consideration does not include carpets, curtains, free-standing furniture or other household consumables. When the sale price includes a payment for items that aren’t part of the chargeable consideration, they must be valued at a rate reflecting their fair market value.

For example, if the seller includes carpets in the sale, the buyer and seller must agree a fair price bearing in mind their age and quality. Subtract this from the price paid to find the chargeable consideration.