House buyers – Are you due a Stamp Duty Land Tax refund?

Solicitors have in the past competently filled a role where they would handle the conveyancing of a property together with the Stamp Duty Land Tax Return, which is a form that must be filed with payment within 30 days of completion in most instances.

However, over the years the SDLT rules have become ever more increasingly complex. Many solicitors will freely admit that they are not tax experts and have computed the SDLT payable using the HMRC calculator, which has a number of inherent weaknesses and fails to account for several Stamp Duty Reliefs that are available resulting in many cases of overpayments of many £000’s in SDLT.

The reliefs apply where:

• You acquire a dwelling with a ‘granny annexe’;
• You acquire a dwelling with commercial buildings or land in the same or linked transactions (with the same seller usually). Commercial buildings or land can of course include farmland.
• You acquire two or more dwellings in a single transaction or linked transactions;
• You buy 6 or more dwellings in the same transaction.

The definition of a ‘dwelling’ takes its ordinary meaning and this is a ‘house, flat or other residence’ which can therefore be considered broadly. It is taken generally to mean ‘a property in which a person can live independently’, and therefore a property which has all the normal services expected in a house. This would include an independent bathroom and kitchen although independent flats with a communal kitchen or bathroom facilities could also be considered dwellings.

Linked transactions can include different but connected purchasers e.g. husband and wife buy two properties from the same vendors in two linked, but separate, legal transactions.

Unfortunately, this means that many buyers are unwittingly out of pocket, having paid an SDLT liability which may not have taken the relevant reliefs into account. This is especially important where the SDLT surcharge 3% has been paid.

We have advised a significant number of clients who have gone on to claim substantial refunds (£104,250 in one instance). There is a time limit of 12 months from the filing date (in most instances therefore 13 months from purchase) to amend your SDLT Return so it is important to act without delay.

If you are wondering if this might apply to your purchase(s) then please do get in touch with our Tax Director, Philip Kinzett-Evans by telephone 01635 555 666 or email pkinzett-evans@ross-brooke.co.uk . He will review your position briefly and advise whether we can help, following which we will draft detailed advice for a tax reclaim to be made.