Have you overpaid your stamp duty land tax?

Sponsored feature | Judith Pederzolli, SDLT specialist at PEM

The majority of property purchases are dealt with by a solicitor or conveyancer, but often their services do not include providing advice on minimising the stamp duty land tax (SDLT) liability.

Therefore buyers could be missing an opportunity to reduce their SDLT bill, either because they could be eligible for reliefs or perhaps because they have paid the three per cent surcharge on additional dwellings where it is not actually due. Sometimes buyers are unaware that they may qualify for a refund of the three per cent when they later sell their old main residence.

In recent years, SDLT has undergone several changes and is now an extremely complex tax. The SDLT calculator on HMRC’s website is very simplistic and overcharges SDLT in a number of scenarios. This makes it difficult to check whether you are paying the correct amount and specialist advice is often required.

At PEM, we regularly assist clients in reducing their SDLT liabilities through proper application of the rules and claiming the reliefs available to them. Typically, savings can be made where:

• The client has been told to pay the three per cent surcharge but their circumstances mean they are exempt;
• The purchase consists of accommodation that could be used as a second dwelling, such as a self-contained annexe;
• The property has features which mean SDLT can be charged at the lower non-residential rates.

Savings can be significant. For example, PEM has recently secured a saving of £20,000 for a client on the basis that the basement level of a townhouse was used as a separate, self contained flat.

Timing can be crucial in making a claim for a refund as buyers generally have only 12 months from the filing date of the original SDLT return to make an amendment.

If you would like to check whether you may be eligible for a refund please contact Judith Pederzolli (jpederzolli@pem.co.uk) or Sarah Davis (sdavis@pem.co.uk).