Stamp Duty Land Tax (SDLT)

The term stamp duty land tax (SDLT) refers to a specific tax that is imposed by the U.K. government on the purchase of land and properties with values over a certain threshold within England and Northern Ireland. In Scotland it is referred to as LBTT and in Wales this is recognised under the term of LTT.

The British Government made an extra £8 billion on SDLT in the most up to date financial information on the previous 12-month period, which is an incredible rise of 63%, unbelievable statistics.

HMRC have went on record to acknowledge that their software which reviews and highlights the actual calculations is complicated and in certain sections are not accurate.

For example, multiple dwellings relief and the second home surcharge are very vague and don’t ask detailed enough questions. As a result, miscalculations become the normal rule of thumb and the inevitable overcharging becomes standard procedure.

What HMRC won ’t make you aware of, is that multiple dwellings relief, sub sale relief, charities relief, housing association relief, traders ’ relief – (chain break, part exchange properties and employment relocation) is the most potent areas were their software is particularly weak.

Paying the correct amount of SDLT used to be fairly straightforward – you took a calculator and worked out the appropriate percentage of the total purchase price. Now, between the ‘ stepped’ system, the surcharge and the raft of different exceptions, reliefs, and qualifying criteria, only an expert on the subject can hope to be sure of paying the correct amount on a new purchase.

Mistakes are costly – as one can imagine, HMRC is not forgiving of errors in payment, with the power to impose interest and fines on any individual found to have underpaid their liability. Equally, if one overpays, one can expect solid silence from HMRC on the subject unless specifically asked – and if one doesn ’t know the right question to ask, there is no hope of getting any answer.

From advising solicitors on how to calculate the SDLT liability on individual transactions to working with corporate entities to maximise their tax efficiency and assisting in forensic reclaims of overpaid SDLT on historical transactions.

It goes without saying that the complexity of the SDLT system in the UK can lead to errors. Exemptions and allowances hidden in legislation can quite often catch out the unwary buyer and their legal advisers, leading in some cases to six figure overpayments of SDLT. Anyone expecting this error to be caught by HMRC will be in for a long wait.

Our team will examine previous transactions from the last four years and quickly determine whether there is a likelihood that an overpayment of SDLT has occurred. If it has, we can write to HMRC, laying out the technical details, and why we feel that an overpayment has been made.

At the successful conclusion of this, a refund cheque from HMRC is issued to the taxpayer. It is really that simple – no fuss, no hassle and best of all – no fee unless and until there is a refund from HMRC – the only time when you will be pleased to see that brown envelope drop through your letterbox.