Is EDC dead?
Posted on 6th August 2022 at 08:35
Many of us have historically used Exchange with Delayed Completion (#EDC) contracts, but be careful about the tax due dates.
For #SDLT, your return and payment must be within 14 days of the ‘effective date’ of the transaction, even if you do not owe any tax, so let’s look at the EFFECTIVE date - the effective date is usually the date the transfer completes, but it can be the date the contract is ‘substantially performed’ if this is before completion. ‘Substantial performance’ is when one of the following happens:
most of the buying price is paid – normally 90% and payment can be in cash or something else of economic value
the buyer is entitled to possession of the property
the first payment of rent is made
But #CGT is different for the vendor, the date of disposal for CGT is the date that you enter into an unconditional contract, which means that for property, this is the date that contracts are exchanged and not the date of completion when possession of the property is actually taken.
If you need advice on any tax issue, contact info@property-tax-advice.co.uk.
Tagged as: Capital Gains Tax, Stamp Duty Land Tax
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