Stamp Duty Land Tax Refunds

It is estimated that around 40% of Stamp Duty (SDLT) returns are incorrect. In the majority of cases the errors are in HMRC’s favour.

(If you purchase a property in Scotland, you no longer pay SDLT, instead, you pay Land and Buildings Transaction Tax)
(If you purchase a property in Wales, you no longer pay SDLT, instead, you pay Land Transaction Tax)

Private individuals, companies and investors have for many years been paying more Stamp Duty Land Tax (SDLT) than they actually owe.

This has often occurred due to the complexities surrounding SDLT rules. More often than not, a conveyancing solicitor will submit your SDLT returns to HMRC after calculating the amounts using the HMRC calculator. In many cases this can quote a figure higher than is due.

What can cause the HMRC calculator giving the wrong figure?

The overpayment generally occurs when the type of property is incorrectly stated. Property could be categorised as residential, when in fact, it could be mixed-use property which may carry a lower rate of SDLT.

A transaction comprising both residential and non-residential components can vastly reduce your Stamp Duty liability.

Have SDLT reliefs been applied when calculating what is due?

There are several reliefs available for property purchases in instances where:

• You buy more than one dwelling
• A developer buys an individual’s home
• There is a Compulsory Purchase Order
• Transfers of property between group companies take place
• Charities purchase property
• The property developer is subject to planning conditions
• The purchase has taken place within a Freeport tax site

Other instances where someone may have overpaid Stamp Duty

If you were regarded as a non-resident at the time of purchasing your property, you will have undoubtedly paid a surcharge of 2%. If following the purchase you met the criteria of becoming a resident, you are eligible to claim a refund within a time limited period.

If at the time of purchase of a replacement main residence where, by the date of completion, your previous main residence had not been sold, you would have had to pay a 3% surcharge. Following the subsequent sale of your first main residence, you would be eligible to claim a refund within a time limited period.