Jeremy Hunt delivered his Autumn statement on 22 November 2023. 


Stamp Duty Land Tax – Surcharge for Non-UK buyers

A new surcharge for Stamp Duty land Tax has been announced and will apply from 1 April 2021 for all buyers of residential property in England and Northern Ireland who are not UK residents (note this new surcharge does not apply in Wales and Scotland).

This adds an extra 2% to the usual Stamp Duty Land Tax (SDLT) that would apply.

The government believe that foreign buyers of property are artificially causing property price inflation, particularly in London. 

What type of purchase does the surcharge apply to?

The surcharge applies to all purchases of residential property in England or Northern Ireland. It does not matter whether the purchase is freehold or leasehold or if it is a building in the process of being constructed.

The purchaser must be a non-UK resident for the surcharge to apply.

If buying jointly with others if one purchaser is not UK resident the surcharge applies to the whole transaction, not just the non-resident’s share.

Exclusions from the charge

Thankfully some collective residential properties such as schools, purpose-built student accommodation and car homes are excluded from the charge.

Also excluded are:

  • Purchases for less than £40,000
  • Acquisitions of lease with less than 21 years to run
  • Reversionary interest subject to a lease with more than 21 years to run

When does the charge tax effect?

The surcharge will take effect for all purchases that complete on or after 1 April 2021.

However, there will be no surcharge for transactions where the contract was substantially performed on or before 11 March 2021.

Substantially performed means most of the purchase price being paid before completion.

How is residency determined for the purpose of the surcharge?

The system of determining residency is not the same as for other taxes and depends on the type of entity use to purchase the property.


For individuals we ignore the Statutory Residence Test used for Income Tax and Capital Gains Tax.

There is a relatively simple test that says:

(1) individual is “UK resident” in relation to a chargeable transaction if the individual is present in the United Kingdom on at least 183 days during any continuous period of 365 days that falls within the relevant period.

(2) “The relevant period” means the period that— (a) begins with the day 364 days before the effective date of the chargeable transaction, and (b) ends with the day 365 days after the effective date of the chargeable transaction.

Rather oddly the test looks back 364 days but also looks forward. If you meet the test that looks back, you pay the surcharge but can then claim it back, by amending the SDLT return if you subsequently become UK tax resident. This claim must be made within 2 years of the purchase.

Alternative test

Where the purchaser, or one of the purchasers, is a:

  • Company
  • Trustee of a unit trust
  • An individual who is a partner entering into the transaction on behalf of the partnership
  • An individual acting as the Trustee of a settlement under which no beneficiary is entitled to occupy the property for life or to income earned in respect of the property

an alternative resident test is used which is backward looking only. An individual will only be treated as UK resident if they have been in the UK for at least 183 days during the past 364 days immediately before purchase.

Residence of companies

Similarly to the individual test the standard way of checking company’s UK residence has been ignored and specific rules for this surcharge brought in to capture a wider audience.

Certain companies which are liable to UK corporation tax (those with existing UK rental property portfolios for example) are likely to be classified as non-resident under these rules..

Specifically, the rules include UK companies controlled by 5 or fewer individuals, the majority of which, by share rights, reside outside of the UK.

It is not possible to assign the rights of a non-UK resident spouse to a UK resident spouse under these rules.


It is useful to work through a calculation so you can see the impact on a typical purchase.

An example being a company acquiring a property for £150,000.

Under the existing rules the company will pay the following SDLT:

Standard Rates£%£
Additional dwelling supplement150,00034,500

However, under the new system a company controlled by non-residents would pay an additional £150,000 x 2% = £3,000 taking the total SDLT payable to £8,000.

This represents a 60% increase in the amount payable from £5,000 to £8,000.

On a purchase at £500,000 the calculation without the surcharge is:

Standard rates£%£
Additional dwelling supplement500,000315,000

The surcharge will add a further £10,000 to the SDLT payable taking it to £40,000 from £30,000.


These new rules will have a significant impact on our clients who use a UK company to buy UK property but reside overseas.

It does not impact existing purchases, only new purchases from 1 April 2021. Clients who are looking to buy residential property and think they may fall into these new rules should consider bringing forward purchases to prior to 1 April 2021 to avoid this surcharge.

This guide is summary of the position in the draft legislation. It is not advice and must not be construed as such. You must obtain advice tailored to your specific circumstances. The Budget on 3 March 2021 will confirm or possibly change this so watch out for our communications at that time.


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