An individual who owns no other property buys a main residence in England for £400,000. Use these residential rates: 0% on the first £125,000, 2% on £125,001 to £250,000, 5% on £250,001 to £925,000. The buyer is not a first-time buyer and no surcharge applies. What is the SDLT?
Answer and explanation
Correct answer: C. £10,000
- Step 1: The first £125,000 is taxed at 0%.
- Step 2: £125,000 to £250,000: £125,000 × 2% = £2,500.
- Step 3: £250,000 to £400,000: £150,000 × 5% = £7,500. Total = £10,000.
Answer
£10,000.
Why not the others: £20,000 applies 5% to the whole price, but SDLT is charged by slices. £8,000 applies 2% to the whole price. £13,750 applies 5% to everything above the zero-rate band and ignores the 2% band.
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