The overwhelming majority of property purchases in London will require you to pay Stamp Duty Land Tax (SDLT). Usually, your solicitor or conveyancer will be able to offer basic advice on the percentage, with non-UK resident surcharges and first-time buyer’s relief available. However, there are nuances that affect the calculation of what you should or should not pay that may not be taken into account.
There are over 30 different exceptions and exemptions covering the type of property, its use, its habitability, the circumstances of the buyer and the nature of the purchase. Your solicitor, unless they are also a tax specialist, is likely to use HMRC’s online Stamp Duty Land Tax calculator to arrive at the final sum. Whilst ‘official’, this calculator is defined by HMRC themselves as a “guide” rather than an exact tool that takes everything into account. The accuracy of the SDLT return prepared by your solicitor is entirely your responsibility as the buyer.
of things that might affect your Stamp Duty bill include:
- Other land attached to the property (outside the usual garden etc.)
- Mixed-use property
- Taxable income from the purchased land
- Rights of Interest over the land that do not benefit the dwelling itself
- If the buyer has been told to pay the 3% surcharge but is exempt due to their circumstances
- If the buyer is eligible for a refund of the surcharge after the sale of their former primary residence
- If the property consists of more than one dwelling
How can I reclaim any overpaid Stamp Duty?
First and foremost, find out how much SDLT you have paid. HMRC says that returns can be amended within 12 months of filing, however the deadline for claiming back tax that you have overpaid is four years from the “effective date” of the transaction.
If you think you have overpaid your SDLT you will need to write to the Stamp Duty Land Tax Office and state your case in regards to which parts of SDLT you believe to be in error, along with a revised calculation. You will need to confirm the amount to be refunded and the person it should be refunded to. Your Unique Transaction Reference Number (UTRN) and a copy of the original SDLT return will be necessary to process your application.
Alternatively, you can instruct a Stamp Duty Land Tax specialist who can pursue any refund claims on your behalf. You will not need to retain them, they will receive a fee if you are refunded SDLT from HMRC. If you have actually overpaid SDLT you will be refunded by HMRC within 10 weeks of sending your application.
Interlet can recommend the tax advisors we work with on a regular basis, who win back millions in tax refunds for their clients each year. Given the significant amounts of Stamp Duty now at stake, any potential refund is likely to be worth pursuing.
To find out more about how you can reclaim overpaid taxes, call us on 020 7361 7962, or email email@example.com.