SQE1 · FLK2 · Property Practice
Post-completion — SQE1 Property question
A worked single-best-answer question on post-completion, with why each wrong option is wrong — the way SQE1 traps candidates.
Post-completion
Cara completed the purchase of a freehold house with registered title today, with your firm acting. The transaction is notifiable for Stamp Duty Land Tax purposes. Cara asks what happens next regarding the tax and the registration of her title, and whether the tax filing can wait until the Land Registry application has been processed.
Which of the following is correct?
- AThe SDLT return must be filed within 30 days of completion, after the Land Registry has registered the transfer.
- BThe SDLT return may be filed at any time within the 30-working-day priority period of the official search.
- CNo SDLT return is required for registered land, because HMRC is notified automatically by the Land Registry.
- DThe SDLT return must be filed and the tax paid within 14 days of completion, and the Land Registry will not register the transfer without evidence that the return has been made.
- EThe SDLT return must be filed within three months, and registration can proceed in the meantime.
Show answer and reasoning
D is the best answer. Under the Finance Act 2003, s 76, a land transaction return for a notifiable transaction must be delivered within 14 days after the effective date, which is normally completion, and the tax is payable by the same date (s 86). Under s 79 the registrar must not register a notifiable land transaction unless the return has been delivered, evidenced by the SDLT5 certificate.
Rule: An SDLT return must be filed within 14 days after completion, and HM Land Registry will not register a notifiable transaction without the SDLT certificate.
- A The filing period was reduced from 30 to 14 days in 2019, and registration depends on the return having been made, not the other way round. (wrong rule)
- B The SDLT deadline is fixed by statute at 14 days after the effective date, not by the search priority period. (wrong rule)
- C A land transaction return is required for every notifiable transaction, whether or not the land is registered. (wrong rule)
- E Three months is not the statutory deadline, and the registrar must not register without the SDLT certificate. (wrong rule)
Source: Finance Act 2003, ss 76, 79, 86