Higher Rate of SDLT for Limited Company?

[domhardy1]

Hi,

I'm buying a leasehold property through my company as a BTL. I've been told I need to pay the higher rate of stamp duty but when I read the HMRC rules & guidance then I can't see how they apply to my situation. The property my company is purchasing is valued at £230,000 and has a lease of 125 years.

From https://www.gov.uk/guidance/stamp-duty- ... l-property, then :

Companies and partnerships
Companies have to pay the higher rates when they buy any residential properties that are over £40,000 and aren’t subject to a lease of more than 21 years.

So the property is over £40,000 but is subject to a lease of more than 21 years. Am I thus right in thinking that my company should not pay the higher rate of SDLT?

Any advice is appreciated.

Thank you.

[bd6759]

The interest you are buying is the lease, therefore the exclsuion applies if that lease is subject to another lease.

Generally this exclusion will apply to freehold interest.
If you buy an unencumbered freehold, you will pay the additional rate. If that freehold is encumbered by a 99 year lease, meaning that someone else has the right to live in the property, you will not have to pay the additional rate.

[SDLT Geek]

I agree with bd6749. The interest the company is buying is itself a lease. It is not subject to a lease. So the 3% surcharge applies.