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HMRC internal manual

Stamp Duty Land Tax Manual

HM Revenue & Customs
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Guidance - Chargeable Consideration and Fees

Stamp Duty Land Tax (SDLT) is generally payable on the total amount given (either directly or indirectly) for the purchase or transfer of land or property (‘property’) in the UK by the purchaser or someone connected with him. This amount is referred to as the chargeable consideration.

In some property transactions the buyer is charged a fee in addition to the purchase price. In HMRC’s view, if this fee is in reality given for the property then it must be included in the amount of chargeable consideration. It is an indication that the fee is chargeable consideration if:

  • it is a condition of the contract that the fee is paid,
  • completion of the property transaction is conditional upon the fee being paid.

Similarly, if the fee is only payable once the property transaction goes ahead, then this is also an indication that it should be included as chargeable consideration.

Please note that in SDLT legislation, a contract does not have to be in writing. A contract means any agreement.

If a fee is paid in respect of a separate matter and does not have to be paid in order to secure the property, then it will not constitute chargeable consideration for SDLT purposes. For instance, a purchaser’s own legal costs would not constitute part of the chargeable consideration as the fees are paid in return for legal services provided to the purchaser. The fees would not need to be paid in order to secure the transfer from the vendor, and the fees would have to be paid even if the property transaction fell through.

In consequence, if the purchase price is at or close to an SDLT threshold, a fee may result in a higher rate of SDLT being payable.

The following are examples of common situations and are intended to give users of this guidance a general understanding of how some fees can impact on certain situations. The examples given are for illustrative purposes only. The effect of the legislation in any individual case will depend on the facts relating to that transaction.