SDLTM09855 - SDLT - increased rates for non-resident transactions: Commencement and Transitional Rules - para 6 Sch 16 Finance (No.2) Bill 2021

Where applicable, the non-resident SDLT (NRSDLT) surcharge applies to all purchases of dwellings with an effective date on or after 1 April 2021

Transitional rules provide that the surcharge does not apply where a contract has been:

• entered into and substantially performed before 1 April 2021; or
• entered into before 11 March 2020, unless they are excluded transactions.

The transitional rules do not apply where contracts were entered into before 11 March 2020 if:

• there is any variation of the contract, or assignment of rights under the contract, on or after 11 March 2020;
• the transaction is effected in consequence of the exercise on or after 11 March 2020, of any option, right of pre-emption or similar right; or
• on or after 11 March 2020, there is an assignment, sub-sale or other transaction relating to the whole or part of the subject matter of the contract, as a result of which a person other than the purchaser under the contract becomes entitled to call for a conveyance.

Examples of a variation of a contract include (but are not restricted to) a change to:

• the dwelling being purchased;
• the parties to the contract, or to the contractual consideration; and
• the term length of a lease.

However, some changes, for example to prescribed colour schemes or to the contractual completion date, may be too insignificant to amount to a variation.

Completing a land transaction return where the transition rules apply

Purchasers should complete “ Question 6 - date of contract or conclusion of missives” with the date that contracts were exchanged - For the transition rules to apply, this date must be earlier than 11 March 2020.

Purchasers should then answer no to “Question 52 - second part, are any of the purchasers non-UK resident?”