According to the gov.uk website, UK residents need to pay Stamp Duty Land Tax when they buy a property over a certain value. Where does this money go and what is it used to fund?

  • This question might get better answers on politics.stackexchange.com as it is more of a political and finance question than a legal one. Commented Feb 4, 2018 at 17:15
  • Do you have a question about the law or something? Asking where your taxes go is, as mentioned, a bit more of a political question, but also a little nonsensical. Walk outside and you'll likely see a road paid for with taxes; maybe you went to public schools - taxes paid for that; pretty much anything you use while you go about your day that you didn't explicitly purchase yourself (and even sometimes then) was paid for with taxes.
    – A.fm.
    Commented Feb 4, 2018 at 19:14
  • In hindsight I agree that this question should have been in a different channel, but I think you've missed the point of the question - I obviously know that taxes are used to pay for stuff around me, but I am asking if Stamp Duty Land Tax is used for paying for anything in particular. Lots of taxes have particular uses, which is the reason they were invented, so I'm wondering if that's the case with Stand Duty Land Tax. If there is not a particular use for it and it still exits for historical reasons then that is the answer
    – dippynark
    Commented Feb 4, 2018 at 19:36

2 Answers 2


I looked at numerous websites, from Wikipedia to a guide on Westlaw to this tax advice website for expats, and even where there was a deep-dive on the history of the tax, it was not disclosed whether it funds a specific thing or not. The closest to that is in the guide I linked to above, in the introduction it says,

Stamp duty land tax is almost eleven years old and there has been virtually no raising of the thresholds to adjust for inflation and it is a major source of revenue for the Government.

However, because that is a paid guide and I was only able to get the introduction, there may be more information available that I do not have access to. I believe the reference to eleven years old is about a new version of the law.

That all said, I am inclined to believe it goes right along with property taxes. So, whatever your property taxes pay for, this likely goes with it. I say that because of the characterization of the tax as described in this article, which says in part:

George Osborne also saw the property market as a rich source of income and whilst there was a drop following the 2007 recession, stamp duty income soon soared, with rapidly rising rates to produce £11.766 billion in the last year. Property taxes now make up 9 per cent of the UK income, which is more than double fuel duty.

Hope this helps.

  • The “property taxes” mentioned in that last quotation will be Stamp Duty Land Tax (and equivalent / similar taxes in Wales, Scotland, and NI I think). So there’s not an “it goes right along with property taxes”, as “property taxes” in that quotation doesn’t have the connotation that it does in US English.
    – owjburnham
    Commented Dec 9, 2021 at 15:08

It goes into the Consolidated Fund and thereafter is used the same way as the rest of the government's money; there's no special destination for this particular set of tax receipts.

That was also the case for its predecessor tax, stamp duty (which still exists for some other transactions other than the ones in land covered by SDLT).

Without tracing the legislative history too far,

  • the Finance Act 2003 created SDLT as a tax, and provided for it to be collected by HM Revenue & Customs
  • the Commissioners for Revenue and Customs Act 2005 says that HMRC must put all their receipts into the Consolidated Fund, apart from certain exceptions which don't include SDLT

As a matter of policy, HM Treasury strongly prefers the "one big pot" system. See the Government manual Managing Public Money, 2021 ed., at 5.6.3:

Proposals to create new taxes in order to assign their proceeds to new spending proposals are rarely acceptable. Decisions on tax are for Treasury ministers, who are reluctant to compromise their future fiscal freedom to make decision.

The general reason here is that if there is one big pot of money, the government has a freer hand than if there were (say) separate funds that could only be spent on road maintenance, or agricultural subsidies, or whatever. Additionally, within the context of the "Exchequer Pyramid" also explained in that document, the one big pot is used in overnight market operations by the Debt Management Office, and having more money available for that purpose is generally useful. While this particular facet of the system has been in operation only since 1998, the general pattern of having one big pot of money has been policy since at least the early 19th century.

When "stamp duty" originated in 1694 (5 Wm & Mary c. 21) it was one of several taxes created at about that time, and intended to fund the Nine Years' War (as we now call it; obviously not a label of the time). Over the next century, it was continued and expanded, since it was found to be convenient to administer, and capable of raising good sums of money. But that time period then brushes into the modernisation of the public finances, including the creation of the Consolidated Fund as mentioned. Rather than taxes being special affairs created for specific spending needs, we had a form of government with more predictable outgoings and an interest in being systematic about the management of the national debt.

In the case of SDLT, its creation involved rationalising the aspect of "stamp duty" that was relevant to most people's lives (buying property). One policy aim was that by severing it from the former version of stamp duty, it would become easier to provide different rules for how it could work, specific to the nature of the property market. There is no particular policy need to have it fund any given aspect of public spending, including war with France. These days, war with France would be paid for out of general funds.

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