Find how to make sure you pay the right tax on purchases of land and property that fall in more than one tax jurisdiction.
There’s no Stamp Duty Land Tax (SDLT) to pay on purchases of land and property in:
There are 2 situations where more than one tax may apply to a land transaction.
Multiple property transaction
When 2 or more property interests in different UK tax jurisdictions are purchased for a single agreed amount of consideration, either as a single transaction or a number of connected transactions (linked transactions).
For example, one transaction involving the purchase of a shop in Wales, a shop in Scotland and a shop in England.
Single cross-border property transaction
The purchase of a single property that includes land on both sides of the English-Welsh or English-Scottish border.
For example, a field that’s split by the border. Land that is on either side of the English-Welsh border may be registered as a single HM Land Registry title (a cross-title transaction) or as 2 or more titles. Land in Scotland is always registered separately.
In both cases
The total consideration must be divided (apportioned) on a just and reasonable basis, to arrive at the appropriate consideration for the part in each tax jurisdiction.
Purchases of land in:
Wales on or after 1 April 2018 are not linked for tax purposes with any transaction elsewhere in the UK (or transactions in Wales made before 1 April 2018)
Scotland on or after 1 April 2015 are not linked for tax purposes with a transaction elsewhere in the UK (or transactions in Scotland made before 1 April 2015)
How to identify a cross-border transaction
For many purchases involving land in more than one tax jurisdiction, identifying the border and the land on either side will be straightforward. In many cases separate titles will already exist for the land in each jurisdiction.
In a small number of cases there will be a single property title that includes land on both sides of the England and Wales border. HM Land Registry Official Copies of title can assist customers to identify these cases.
Border not shown
In some cases the border is not marked on the title plan and will need to be identified from other geographical sources.
Find the border on HM Land Registry titles
The border may be shown on HM Land Registry title plans where the land is on the border or close to it. If so, it is shown as a broken and dotted line.
The position of this line doesn’t determine if the land in the title falls wholly or partly in England or Wales - its position in relation to the red edging on the title plan may be an indication.
It allows the user to:
- find out whether a property is registered
- view its location
- obtain the title number
- see the ownership of title
Users can find where the border falls on those titles where it’s not marked. This will then allow the taxpayer to work out which return(s) are needed.
The service can also help work out the apportionment of consideration for the land in England and in Wales, where an apportionment based on area gives a just and reasonable result.
Different land plot locations
There are a small number of cross-border properties with separate areas of land that aren’t neighbouring.
This might include where an area of land falls wholly in one country, and a separate area lies wholly in the other country. It’s important to find out if a cross-border property includes land split in this way.
There can be transactions where the property title is a distance from the border and the border isn’t shown. To help find the border and the tax jurisdiction(s) where the land is located, you can use:
- evidence from the register of title
- knowledge of the UK’s geography
- local authority searches from planning applications
For those titles close to the border but not crossing the border, the local authority code will help find the right tax jurisdiction.
Your obligations for cross-border transactions
In all cases you must make sure the consideration amount is apportioned on a just and reasonable basis.
Properties in different tax jurisdictions
Where there are separate properties in different tax jurisdictions and where the apportioned consideration is above the limits for notification to the relevant tax authority:
for land in England or Northern Ireland - send an SDLT return to HM Revenue and Customs (HMRC) entering code 6996 instead of the local authority name
for land in Wales - send an LTT return to the Welsh Revenue Authority (WRA) entering the relevant Welsh local authority name and answer ‘yes’ to the cross-border question
for land in Scotland - send an LBTT return to Revenue Scotland (RS) entering the relevant Scottish local authority name and answer ‘yes’ to the cross-border question
Land in England and Wales
Where the transaction is a single property with land in England and Wales and the apportioned consideration is above the limits for notification to the relevant tax authority:
for land in England - send an SDLT return to HMRC entering code 6997 instead of the local authority name
for land in Wales - send an LTT return to the WRA entering the relevant Welsh local authority name and answer ‘yes’ to the cross-border question
Guidance on how to apportion consideration is available from the Valuation Office Agency (VOA).
Tax authority checks
Where you’re required to apportion the total purchase amount using the just and reasonable method, either the WRA, RS or HMRC may challenge the return made to them.
The enquiry will look at the apportionment of the total consideration to establish the basis on which the apportionment was made.
If the evidence of apportionment is absent or appears to be unreasonable, it’s possible that the tax authority will ask the VOA to establish the total purchase amount for each return.
If this happens, RS, WRA and HMRC will accept the decision of the VOA.
Registration of title at land registries
There are 3 authorities for registering the ownership of land and property in the UK:
- HM Land Registry for land in England and Wales
- Registers of Scotland for land in Scotland
- Land and Property Services for land in Northern Ireland
When registering a transaction with a land registry, you must have confirmation that a SDLT, LTT or LBTT return was sent to the relevant tax authority in respect of that transaction.
From 1 April 2018 if land or property is purchased that’s in both England and Wales, a single registration to HM Land Registry can still be made.
If both transactions have been reported to tax authorities, any application for a transfer (by way of sale for £40,000 or more) submitted for registration must include evidence in the form of:
- SDLT certificate (England)
- LTT certificate (Wales)
There will be cases where the cross-border transaction will include land in England or Wales that isn’t notifiable to either WRA, HMRC or both.
In these cases, HM Land Registry needs to know if there’s only one certificate (or none) and the reason for that.
There may be cases where there’s a very small part of land in one country with the clear majority of the land located in the other.
The consideration amount should be apportioned on a just and reasonable basis.
If the minor part is too small or below notification limits, HM Land Registry should be advised of this.