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HMRC internal manual

Stamp Duty Land Tax Manual

Paying Legal costs of vendor

Example 6

I enter into negotiations to purchase a property marketed for sale at £415,000. The outcome is that the vendor lowers the price to £400,000 and I agree to pay his legal costs. On completion I pay the £400,000 plus his legal costs of £7,000 (including VAT).

The chargeable consideration for this transaction is £407,000 (purchase price plus vendor’s legal costs). SDLT is charged on what has been given for the property. Therefore:

The SDLT due on £407,000 = £10,350.

(Payment by a tenant in discharge of any of the obligations noted above does not count as chargeable consideration).

Here is a breakdown of how the SDLT was calculated:

Purchase Price Bands (£) Percentage Rate (%) SDLT due (£)
Up to 125,000    
Above 125,000 and up to 250,000 2 2500
Above 250,000 and up to 925,000 5 7850
Above 925,000 and up to 1,500,000 10  
Above 1,500,000+ 12  
  Total SDLT due 10350