Tax break for SIPP and SSAS commercial property purchases under £1,050,000

In sharp contrast to the significant increases in Stamp Duty Land Tax (SDLT) for additional and buy-to-let properties that were announced by the Chancellor in the 2015 autumn statement,  Budget 2016 unveiled improvements in the way that SDLT would be charged on commercial property purchases, which took effect from 17 March 2016.

What are the changes and what do they mean for individuals?

The budget announcement brought good news for most purchasers of commercial property in England, Wales and Northern Ireland. As of Thursday 17 March 2016, the basis for calculating the SDLT has changed and members purchasing a commercial property for less than £1,050,000 with their SIPP or SSAS now pay less SDLT.

The pre-budget regime was a flat rate system, which created ‘cliff edges’ at certain values. This meant that buying a commercial property for £250,000 incurred £2,500 SDLT while buying one for just a pound extra - £250,001 – would cost an additional £5,000 in SDLT. 

The new system has introduced a tiered system. The new bands are:


Up to £150,000                                                                                            


£150,001 to £250,000                        


Over £250,000                                   


This removes the cliff edges in SDLT due.

These are welcome changes, as it means that only purchase valued over £1,050,000 will pay more SDLT under the new rules.  As the majority of transactions we deal with are less than this amount,most of our SIPP and SSAS investors in commercial property stand to benefit.

Note that Scotland sets its own rates of SDLT.