The state views conveyance as a form of business. Business involves the exchange of goods and services with an aim to make a profit. Both buyers and sellers benefit in one way or another at the close of a business transaction. The advantage that buyers and sellers get is subject to taxation just like the income tax. The way to determine conveyance taxes is slightly different from how income taxes for salaried people are calculated. It is important for beneficiaries of conveyance to know how they will be taxed so that they can anticipate the expenses they will accrue upon the completion of conveyance.
Taxation is not a form of punishment. Taxes are the major sources of revenues to the government. State systems would collapse if there were not taxes. Taxes help keep a country together. The government knows the burden that taxes can bestow upon its citizens. Taxation is designed in such a way that people can pay without losing too much money. Every business or source of income is taxed just well enough to keep those involved financially afloat. That is, each business is taxed in a way that is different from another with consideration given to levels of income of the taxpayer. Conveyance taxes are technically different from income taxes or taxes that are imposed on other businesses.
There are two major taxation systems in the conveyance. The first one is stamp duty tax system and the second is the capital gains tax. Stamp duty land taxes are imposed on buyers of properties. Capital gains tax is for sellers of properties who meet certain criteria. These two taxation systems are different in their methods of execution. A buyer may be eligible for stamp duty tax even if his seller is not.
Stamp duty land tax is paid to the HMRC upon completion of conveyance. The real estate buyers pay it within thirty days of completion of conveyance. A buyer is assumed to have gained an asset when he purchases a property. It is the increase in an asset that is taxed. A buyer’s solicitor usually processes this tax. The solicitor may pay the fee with his own money in which case he will have to be refunded by the purchaser. A buyer can file a tax return and pay the tax himself if the solicitor fails to process the tax during his tenure.
The method of calculating stamp duty taxes is similar to that of income tax. This tax is grouped into bands. The number of bands in a taxation system depends on whether the property that has been sold is residential, commercial or an additional property to a buyer who already has another property. First-time residential houses that are less than £125,000 are not taxed. Properties worth more than £125,000 are taxed at rates ranging from 2% to 12%. Taxation for commercial properties begins with properties of at least £150,001. Additional properties are taxed from property prices greater £40,000.