What may stamp duty land tax paid on the purchase of land be used for in a subsequent disposal?

The correct answer is that stamp duty land tax paid on the purchase of land may be deducted as part of the cost of the land in a subsequent disposal. This is because the stamp duty is considered a transaction cost associated with acquiring the property. When calculating the gain or loss on the sale of the property, the total cost of the property includes the purchase price plus any allowable costs, such as stamp duty.

Including stamp duty in the cost basis of the land allows the seller to potentially reduce the capital gain that would be subject to taxation upon sale. This deduction serves to provide relief and appropriately reflect the investment made in the property when determining profit from the sale.

The other options do not accurately reflect how stamp duty land tax impacts disposal. For instance, stamp duty does not directly increase the selling price of land, nor is it refundable upon disposal. While it does not affect the tax calculation in that it is not a tax on the eventual sale itself, it still forms part of the cost basis, influencing the overall gain or loss calculation.