HM Revenue & Customs (HMRC) is reminding conveyancers to enter code ‘04’ for the ‘type of property’ when the higher rates of stamp duty land tax (SDLT) for additional residential properties are due.
Code 04 should always be used when the higher rates are due, even if it is anticipated that a refund will be claimed. When code 04 is used the system will automatically calculate the tax due at the higher rates.
HMRC has indicated that a high number of returns submitted with the higher rates of SDLT for additional residential properties, on which the higher rates have been paid, show code 01 rather than code 04 for the ‘type of property’.
The buying an additional residential property guidance and the paper return guidance have been updated and there is a message on the At a glance page of the online return to remind customers to use the correct code.