The temporary cut to Land and Building Transaction Tax (LBTT) nil-rate band introduced in July 2020 saw the starting point for LBTT rise from £145,000 to £250,000.
However, this was a temporary measure and as intended, for transactions with an effective date from 1 April 2021 onwards, the ceiling of the nil-rate band for residential LBTT will return to £145,000.
First-time buyers will continue to be able to claim the first-time buyer relief, which has the effect of raising the nil rate band to £175,000 and results in a reduction of tax of up to £600.
|
Proposed LBTT Rates and Bands for Residential Conveyances 2021-22 |
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|
Band |
Relevant Consideration |
Rate |
|
Nil rate band |
Not more than £145,000 |
0% |
|
First tax band |
More than £145,000 but not more than £250,000 |
2% |
|
Second tax band |
More than £250,000 but not more than £325,000 |
5% |
|
Third tax band |
More than £325,000 but not more than £750,000 |
10% |
|
Fourth tax band |
More than £750,000 |
12% |
UK Budget
The UK Budget is scheduled for Wednesday 3 March 2021.
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