Purchasing residential property through a company above £500,000 triggers a specific set of SDLT rules that many investors — and some advisers — don’t fully understand. The headline is alarming: a flat 15% SDLT rate. On a £560,000 purchase, that’s £84,000 in stamp duty. But the headline doesn’t tell the full story. Several reliefs exist for companies acquiring property for legitimate business purposes: rental, development, or trading. The relief must be actively claimed in the SDLT return with appropriate supporting evidence. Simply being a property company is not sufficient. We review the company’s structure, purpose, and the specific transaction to confirm which relief applies, then ensure the return is filed correctly. In this case, the company was a genuine rental business, and the property rental relief applied. SDLT was calculated at standard rates plus the 3% surcharge — approximately £35,000. Without the relief claim, the liability would have been £84,000. Importantly, we also set up the annual ATED compliance obligations. Even where relief applies, the company must file an ATED return every year confirming the relief still applies. Failing to file can trigger penalties and potentially retrospective SDLT charges. This is an area where getting the technical detail right matters enormously, and where cutting corners creates real exposure.
