Overseas Buyer/Non-Resident UK Stamp Duty Calculator

What is overseas buyer stamp duty?

Stamp Duty Land Tax is a tax paid to HMRC when you buy houses, flats and other land and buildings over a certain price in the UK. The tax is also paid by buyers from overseas (non-UK residents) at a 2% surcharge when buying property in the UK.

What are the new rates of Stamp Duty Land Tax (Stamp Duty) for non-UK residents from 1st April 2021?

From 1st April 2021, a 2% stamp duty surcharge was introduced for overseas buyers on the purchase of residential property in England and Northern Ireland.

The surcharge applies to non-resident buyers regardless of the type of buyer (e.g. company or individual) subject to very few exceptions for collective investment vehicles such as REITs.

The surcharge is in addition to the existing 3% stamp duty surcharge on purchases of “additional” dwellings such as buy-to-lets and second homes, the flat 15% stamp duty rate on purchases of dwellings worth more than £500,000 by companies acting as “envelopes” and the existing stamp duty rates for UK home buyers. According to HMRC, 2,700 transactions have incurred the 2% surcharge since its introduction, yielding £19m of additional tax up to Q2 2021.

How to use the overseas buyer stamp duty calculator

Overseas homebuyers face an additional 2% SDLT surcharge on top of the existing 3% stamp duty tax levied on the purchase of second homes. If you are a non-UK resident buying a property in England or Northern Ireland, mark the relevant box below.

Please note: The calculators have been updated following the end of the Stamp Duty holiday taper period on 30 September 2021. If you would like more information on how this may affect you as an overseas buyer, please contact one of our offices.

The new non-resident stamp duty surcharge applies if:

The buyer is an individual and he is considered a non-UK resident. If the purchase is made jointly with a spouse or civil partner (who are co-habiting), only one of the purchasers needs to be a UK resident for the charge not to apply. Conversely, if there is more than one buyer, the surcharge will apply in full if just one is not resident.

If the residence test has not been met at the point of sale, the surcharge must be paid to HMRC no later than 14 days from the “effective date” of the transaction (usually completion).

An individual is UK resident for these purposes where they have spent 183 days in the UK (judged by their location at midnight) over any consecutive 365-day period beginning 12 months before the transaction and ending 12 months after.

This is different to the UK’s statutory residence test which is based on how much time is spent in the country during a tax year. So, an individual may be regarded as UK resident for income tax purposes but non-resident for stamp duty purposes.

Where individuals pay the surcharge but then satisfy the residence conditions in the 12 months following the transaction, they may be entitled to a refund. Individuals have two years from the date of purchase to amend their SDLT return to reclaim the surcharge.

HMRC will accept the following as proof of residence:

• credit card and bank statements which indicate place of the purchaser’s day by day expenditure
• work diaries or planners, including timesheets or rosters
• mobile phone usage and bills pointing to the individual’s presence in a country
• general overheads, for example, utility bills which may demonstrate that the individual has been present in the UK, for example, telephone bills or energy bills
• membership and usage of clubs, for example, sports, health or social clubs

Residence of companies

A company is treated as UK resident if it is UK resident for corporation tax purposes on the date of purchase but there is an exception for “close” companies that are controlled by one or more non-resident participators (an adapted close company test) – i.e. these companies are treated as non-UK resident.

There is no equivalent provision in reverse (i.e. deeming non-UK incorporated companies to be UK resident if they are “close” and controlled by one or more resident participators). The rule is designed to stop a non-resident individual setting up a UK company to purchase a dwelling to avoid the surcharge.

Residence of other entities

Purchases by partnerships are treated as made by the partners. If one partner (company or individual) is regarded as non-resident, the whole transaction would be “surcharged”. Purchases by trusts are treated as made by the trustees or beneficiaries depending on the type of trust and the existence of a “life interest”.

The design of the SDLT return will change to enable to enable buyers to self-assess that the SDLT transaction is a “non-resident transaction”.

Are there any exemptions?

The 2% surcharge will not apply to certain transactions, including:

• purpose built student accommodation
• residential property that is subject to the circa 5% commercial property rates
• property you lease if your lease is for 7 years or less, on the date it was granted.
• in addition, a limited exception will apply to non-resident individuals who are “Crown employees”: e.g. members of the armed forces posted overseas.

Transitional rules

The 2% surcharge applies to property purchases from 1st April 2021 subject to transitional rules for transactions where contracts have been exchanged before 11 March 2020 but do not complete until or after 1st April 2021 and for contracts that are “substantially performed” before 1st April 2021 but do not complete until after 1st April 2021.

Non-UK resident stamp duty tax bands

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