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HMRC internal manual

Stamp Duty Land Tax Manual

Scope: How much is chargeable: Costs etc not treated as chargeable consideration

Some costs paid by the purchaser on the sellers behalf are chargeable consideration (such as vendors legal costs etc). Costs described in this part of the guidance are treated differently.

Costs under compulsory purchase legislation

Costs under section 23 Compulsory Purchase Act 1965 and compensation for disturbance and other matters not directly based on the value of land under section 5(6) Land Compensation Act 1961 are not chargeable consideration.

Payment of Inheritance Tax, Capital Gains Tax, landlord’s costs and surrender of entitlement to single farm payment:

Payment of inheritance tax: the transfer of property to a person as a gift, or under a will or intestacy, may result in that person having a liability or potential liability, or agreeing, to pay inheritance tax. This liability or agreement is not chargeable consideration.

Payment of capital gains tax: the transfer of property to a person as a gift, or in other circumstances which do not amount to a bargain made at arm’s length, may result in that person having a liability or potential liability, or agreeing, to pay capital gains tax. The Regulations provide that this liability or agreement is not chargeable consideration. This exclusion does not, however, apply if there is any other chargeable consideration.

The payment by a tenant of a landlord’s reasonable costs on the grant, extension or enfranchisement of a lease is not chargeable consideration. See SDLTM11060

It is common for agricultural leases to include an obligation on the tenant to surrender their entitlement to the Single Farm Payment to the landlord on termination of the tenancy. The Regulations provide that this obligation is not chargeable consideration.