Guest blog: Stamp Duty Land Tax (SDLT) refund opportunity

8 April 2019 |

Stamp duty rates for those buying at the top end of the market have soared in recent years and now represent a significant cost, especially for those purchasing in prime areas. LonRes figures show average house prices in Westminster of £4,649,145. The SDLT payable on such a house is over £470,000, or almost £610,000 if the property doesn’t meet the main residence rules and is therefore subject to the dreaded 3% SDLT surcharge.

But many buyers are paying more stamp duty than is required, either because the 3% surcharge doesn’t need to be applied (or can be reclaimed), or because of an often-overlooked aspect in the detail of the stamp duty rules.

Properties which have annexes, granny flats or other smaller dwellings on their grounds which could be used as a separate dwelling, can be treated as two separate dwellings for SDLT purposes. This means that the lower rate bands on the two homes are applied twice and this can result in a worthwhile saving.

Taking that £4.65m semi in Westminster, for example, the saving might be over £70,000. For clarification, HMRC have issued guidelines on the circumstances when the additional 3% stamp duty surcharge does not need to be applied.

It’s something worth considering when talking to clients. If you are an agent who has recently sold a property with an annexe or self-contained dwelling, your client could be entitled to a refund on the SDLT paid, on which you can earn substantial commission from. Do get in touch to find out more.

We have experience of over a hundred successful claims so we know how to put the claim together, and we have an excellent working relationship with the HM Revenue & Customs team which handles them.

There are strict time limits for making claims. If you might be affected please contact us without delay.

About the author

Tajinder Bhalla

Principal, Shipleys

Work and clients: Tajinder’s focus is on planning advice for private clients and business owner managers, with particular attention on property taxes including mitigating Capital Gains Tax and Stamp Duty Land Tax. He also advises on HMRC Tax enquiries and appeals to the Tax Tribunal.

Memberships: Chartered Institute of Taxation (ATII both Direct & Indirect Tax), Barrister (Middle Temple).

Aim: To unravel the complexities of tax to give ongoing advice that is relevant and responds to the changing tax rules and needs of clients and their business, which consistently creates greater value for the client than the competition.

Tajinder Bhalla, Principal of Shipleys - LonRes Guest Property Blog