Stamp Duty Land Tax (SDLT) must be paid within 14 days of the completion of the property deal. The amount due is calculated according to the purchase price of the property, so normally a refund of SDLT will not be necessary as the correct amount will have been paid.
However, where one or more of the purchasers will owns an interest in two or more residential properties at the end of the day on which the deal was completed, the SDLT will include the 3% supplement on the entire value. This can happen where the individual has bought a new home before they have sold their old home.
When the purchasers sell their original main home within three years of the purchase of their new main home, they can claim a refund of the 3% SDLT supplement. These SDLT refund claims will now be paid out without prior eligibility checks by HMRC, which should speed up the process.
However, repaying out the SDLT doesn’t mean that HMRC has agreed the refund is correct. HMRC has nine months to carry out compliance checks for amended SDLT returns and refund claims. If HMRC finds that the SDLT refund was not due, the taxpayer will be required to pay it back with interest.
Written by the Tax Advice Network