Have you overpaid Stamp Duty Land Tax? Are you due a repayment?

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 for a quote by filling in the form below. We will review your position briefly and if we are asked to proceed on the basis of the quote will draft detailed advice for a tax reclaim to be made.

NB Our minimum charge for SDLT advisory services is £375+vat per enquiry. If this is not acceptable then we are unlikely to be able to assist on this particular matter.

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We were recommended Phil Kinzett-Evans at Ross Brooke by our solicitor at Gardner Leader as she thought we might have a case for obtaining a part refund on our stamp duty land tax. Right from day one Phil was very helpful, very speedy with his responses and kept us well informed. He provided the technical tax advice necessary in order for us to make our reclaim. Happily our refund claim was successful, Phil made the whole process very easy and we would highly recommend him to anyone needing advice.

Belinda – Stamp Duty Client
How we helped our clients

A client recently came to us for a review of his Welsh property purchase. Our advice has saved him £92,400 in Welsh Land Transaction Tax. The property concerned was identified as having four dwellings included in it and as such a valuable relief is available for him to claim. Our work involved working with him to identify the legislation, consider the rules of multiple dwellings relief and additional dwelling surcharges and advise him appropriately. A fantastic result for a fee in the region of 1.2% of that tax saving!

Phil Kinzett-Evans

SDLT amendment success claim resulted in a £42k repayment to the client who had been incorrectly advised by their solicitor.

This was a house with some registered farmland and an outbuilding which was not quite a ‘dwelling’. I assisted the client in resubmitting the transaction as non-residential. HMRC accepted this and made the repayment to the client.

Where residential properties are bought with non-residential properties, the whole transaction is subject to non-residential rates… which is usually far more SDLT efficient.

Phil Kinzett-Evans

Our clients asked us to advise on the correct treatment of their property purchase for Stamp Duty Land Tax Purposes. We advised that the property had mixed-use and therefore should be subject to the non-residential rates of SDLT, which at the time of the transaction gave a more favourable tax outcome than residential rates.

HMRC enquired into the Return filed by the solicitor. We provided evidence to support the classification.

HMRC has confirmed their agreement with our view that the property was mixed-use, and the non-residential rates were correctly applied.

“A reclassification to residential rates would have cost our client thousands in extra tax, and so we, and our client, are very pleased HMRC agreed with our view of the transaction. Anyone in doubt about the correct classification of a property for any tax purpose, should take professional advice as there are many small details that can impact the end result.” (PKE)

Our clients said: “We must thank you for your help in this matter, we are very pleased that we were able to present the evidence convincingly.”

Phil Kinzett-Evans