In recent years, SDLT has undergone several changes, leading to confusion and a more urgent requirement for specialist advice to determine the right amount of SDLT due.
Solicitor or specialist conveyancers deal with the majority of property purchases, but in many cases their scope of work does not include providing advice on the stamp duty land tax (SDLT) liability. As a result buyers could be missing an opportunity to reduce their SDLT bill, either because they could be eligible for specific statutory reliefs or perhaps because they have paid the three percent surcharge where it is not applicable, or they are unaware that they may qualify for a refund of the three percent when they later sell their old main residence.
The key occasions where SDLT savings can be made include:
- The purchase consists of more than one dwelling, and multiple dwellings relief is available;
- The property has features which allow access to the non-residential rates;
- The taxpayer has been told to pay the three percent surcharge but their situation means this is not the case;
- The taxpayer is eligible for a refund of the three percent surcharge when they later sell their old main residence.
Time is of the essence in making a claim for a refund. In most cases the legislation only allows buyers 12 months and 30 days from the purchase date to amend SDLT returns.
By way of an example of the SDLT savings achievable, we recently assisted a purchaser to recover £45,000 SDLT that they had inadvertently overpaid on the purchase of a small country estate consisting of five dwellings as well as farm buildings, 210 acres of farmland and 212 acres of woodland.
Whilst the conveyancing solicitor had correctly recognised that non-residential rates should apply to the purchase, they had failed to identify that the SDLT liability could be reduced by making a multiple dwellings relief claim in respect of the residential part of the purchase. As a result of this SDLT advice this purchaser has now become a client of this firm and valuable tax and accounts work annual fee income has been generated.