The amount of Stamp Duty Land Tax (SDLT) payable by a buyer on the purchase of a property depends on the SDLT Tax Band within which the purchase price falls.
On a residential property with a sale price of over £125,000, this can be anything between 1% and 7% (or even 15% for a property costing over £2m bought in the name of a company).
SDLT is charged at the appropriate rate on the whole of the amount paid. For example, a house bought for £250,000 is charged at 1 per cent, so £2,500 must be paid in SDLT. A house bought for £250,100 is charged at 3 per cent, so SDLT of £7,503 is payable.
HM Revenue and Customs are clamping down on buyers using sale price apportionments to avoid or reduce Stamp Duty Land Tax.
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