Paper or online options including Automated Registration of Title to Land and how to get an urgent Stamp Duty Land Tax (SDLT) certificate.
SDLT is to be devolved to the Scottish Government. When the new Land and Buildings Transaction Tax (LBTT) comes into force in April 2015, SDLT will no longer apply to land transactions in Scotland and HM Revenue & Customs (HMRC) will no longer deal with returns for these transactions.
Transitional guidance has been published to explain how LBBT effects Scottish land transactions and how it should be applied to SDLT in Scotland.
The information below only deals with SDLT returns for Scottish transactions which take place before the new tax comes into force.
The information outlines the main options for filing SDLT returns in Scotland - including the benefits of using the Automated Registration of Title to Land (ARTL) system. ARTL is the first system in the UK to combine online filing of the SDLT return with electronic registering of property.
If you’re not using ARTL, the guide also tells you when and how you can make an urgent request for an SDLT certificate to prevent a purchase falling through, and what to do if a certificate is delayed or needs amending.
The Scotland Act 2012
The Scotland Act 2012 devolves to the Scottish Government, the power to raise a tax on land transactions in Scotland, in place of SDLT. The Land and Buildings Transaction Tax (Scotland) Act 2013 has received the Royal Assent and the new tax is expected to apply from April 2015.
When LBBT comes into force, SDLT will no longer apply to land transactions in Scotland and HMRC will no longer deal with returns for these transactions. This guidance deals with SDLT returns for Scottish transactions which take place before the new tax comes into force.
Options for filing an SDLT return in Scotland
As in the rest of the UK, you usually have to pay SDLT when you buy or transfer land or property in Scotland. You can complete the SDLTreturn online or use a paper return.
Online filing has many benefits, it’s simple to use, secure, more efficient and convenient than using a paper return and is available 24 hours.
In Scotland, solicitors, conveyancers, local authorities and mortgage lenders have the option of using the fully automated ARTL system. This checks the accuracy of the return and automatically authorises Registers of Scotland to register the transaction and no SDLT5 certificate is required.
If the transaction is one for which you can’t use ARTL, you can file an SDLT return online using either HMRC’s Stamp Taxes Online service or software from a commercial software provider.
You also have the option to complete the paper SDLT return, but this takes longer to complete and any mistakes will take longer to resolve. You will also have to post the return to HMRC, and wait to receive the SDLT5 certificate which you will need to register the transaction with the Registers of Scotland.
What is ARTL and who can use it?
ARTL - Automated Registration of Title to Land, is an electronic system you can use to file the SDLT return online at the same time as registering the transfer of the property with Registers of Scotland.
You can only use ARTL if you’re dealing with Scottish land and property transactions and are one of the following:
- a firm of solicitors
- a firm of licensed conveyancers
- a mortgage lending institution
- a local authority
Transactions submitted using ARTL
You can use ARTL to apply to register:
- most transactions for land or property that’s already registered with the Registers of Scotland
- transactions involving the assignment of a single property lease
Transactions where you can’t use ARTL
You can’t use ARTL for:
- transactions in land or property that’s not yet registered with Registers of Scotland
- transfers of part of registered land, for example where you buy a field that was part of a farm and the farm is already registered
- transactions involving the grant of a new lease or the assignment of more than one lease
There aren’t currently any plans to extend ARTL to include the above transactions, but you can still file the SDLT return online using HMRC Online Services or software from a commercial software provider, or file a paper return.
Benefits of using ARTL
If you use ARTL, you can complete conveyances quickly and efficiently and pay the tax easily and securely. Key advantages include:
- it’s quicker and easier to complete the SDLT return, most of the entries are filled in automatically from the property details held by Registers of Scotland and from the details you provide for the registration application
- the system is designed to ensure you answer all the questions correctly before you submit the SDLT return
- you won’t have to send an SDLT certificate by post to apply for registration of title, this is done automatically online
- registration is normally complete within 24 hours of submitting the application
- the land registration fees are lower than online or paper transactions
Paying SDLT when using ARTL
When you register for ARTL, you set up a variable direct debit to pay registration fees and any SDLT that’s due.
The SDLT due on a transaction is collected by Registers of Scotland and passed to HMRC. So if you use ARTL for transactions, paying the tax is easier, quicker and more secure.
Filing outside of ARTL - urgent requests for the SDLT certificate
2 day service - buyer risks losing the property
If you file an SDLT return outside of ARTL you’ll need to post the SDLT certificate to the Registers of Scotland so that they can register the transaction. However, if there’s a delay in receiving the certificate, and as a result a real risk that the buyer might lose the property (where the transaction needs to be registered on the day of settlement or on the following day), you might be able to apply for an urgent handwritten SDLT certificate using HMRC’s ‘2 day service’.
HMRC’s 2 day service is only available if the:
- seller’s solicitor doesn’t provide the usual letters of obligation which guarantee the purchaser’s title if the transfer is registered within a specific time - usually 21 days
- seller is a company and the letters of obligation are only on behalf of the client
- buyer needs to register before they can get the funding for the transaction
- SDLT return was filed online but a certificate wasn’t produced due to a system problem
To use HMRC’s 2 day service and get a SDLT certificate you must apply within 2 working days of the effective date of the transaction and:
- scan a copy of the completed and signed SDLT1 and any supplementary forms
- produce a signed declaration which includes the name and address of the solicitor, the UTRN number and the reason from the above for the urgency certificate.
- email the scanned SDLT1, any supplementary forms (where appropriate) and signed declaration to email: firstname.lastname@example.org
- send the original SDLT1 and supplementary forms to the Stamp Taxes office, mark your correspondence ‘SDLT urgent’
HMRC will process your request within 2 working days and if it satisfies the mandatory requirements and is validate, will send:
- a copy of the SDLT5 certificate to you
- a copy of the SDLT5 certificate to ‘Registers of Scotland’
- the original SDLT5 certificate to your registered address, once HMRC has received the original completed and signed SDLT1 and supplementary forms
If you filed the SDLT return online but you haven’t received a certificate due to a system problem, you’ll have to provide both of the following when you apply:
- the ‘black and white’ PDF version of the electronically filed return
- the submission receipt and UTRN
Write to HMRC about Stamp Duty Land Tax:
Birmingham Stamp Office
City Centre House
30 Union Street
Urgent: fax request, SDLT certificate not received following submission of a paper return
You can use HMRC’s Scottish ‘urgency’ service if you file a paper return and you don’t receive your SDLT certificate within 16 calendar days of the effective date of the transaction. This service allows you to apply for an urgent certificate by fax.
To apply you’ll need to:
- request the service by contacting the Stamp Taxes Hepline
- tell the Stamp Office whether or not the cheque you sent with your SDLT return has been cashed - but don’t stop the cheque if it hasn’t been cashed
- fax a copy of your SDLT return marked for urgent attention to the Stamp Office
You’ll be sent a hand-written SDLT certificate by DX or by post as long as:
- you filed the original SDLT return in plenty of time for HMRC to send you the certificate within 16 days
- there are no errors or omissions in the return
SDLT certificate incorrect or incomplete
If you realise that the information in an online or paper SDLT certificate is incorrect or incomplete you can still send it to Registers of Scotland for registration.
The transaction will usually be registered if you send a copy of the SDLT return with it, and a letter explaining either:
- what information is missing
- where the certificate differs from the return, this is only likely to happen with paper returns
If Registers of Scotland won’t accept this, you should contact the Stamp Office who will arrange for you to be sent a replacement certificate.