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Non-UK residents and companies could pay extra tax on buying UK property

The Government has launched a consultation on non-UK residents paying additional stamp duty land tax (SDLT) on residential property purchases in the UK. The consultation is currently open and will close on 6th May 2019.

It proposes that an additional 1% SDLT will apply to purchases of UK residential property by both non-resident individuals and companies, including some UK-resident companies if they are owned and controlled by non-resident shareholders. There will be no specific reliefs, although the usual reliefs will apply. For example, if six or more residential properties are bought in a single transaction this will still be treated as non-residential and therefore will not be subject to the additional 1% SDLT.

It is not yet clear what test will be applied to establish whether an individual or company is non-resident for SDLT purposes, but it is likely that this will be similar to tax residency, although it has been suggested that the domicile test is also a viable option.

This charge would be in addition to the 3% surcharge for second homes introduced in 2016. Non-residents will have to weigh up any additional charge against the overall upside of buying in the UK; including a consideration of the weaker Sterling.

Top Tip Where someone is resident can be complex, Sykes Anderson Perry can advise you on this.

For advice on Tax matters, please contact our International and Cross Border Tax team.