How to Claim your Stamp Duty Land Tax refund

Do you need help with claiming tax refunds after purchasing property with land, woodland, annexes or outbuildings?

If so, you’re not alone. Stamp Duty Land Tax (SDLT) is an extremely complex area of taxation. It has seen more changes since being introduced in 2003 than any other comparable tax and is now a minefield of exemptions, exceptions, special circumstances and reliefs.

Conveyancers are often not familiar with the wide range of different circumstances that can affect this tax, including the many types of properties and buyers and the residential or commercial classifications that may apply. It doesn’t help that there are often conflicting messages from regulators, and the result is that many people end up paying too much SDLT on properties that include land and woodland, annexes or outbuildings.

Thomtax are experts in this ever-changing area. Our team has a wealth of specialist experience and can help to ensure that you pay no more than you should and are able to claim refunds that you are owed.

Refunds on your SDLT

If you are about to complete the purchase of a property, or have done so in the last 12 months, then you could be liable for a refund on your SDLT.

If your property has features including land, outbuildings, woodland or separate annexes, then you should contact us for advice and one of our experts will talk you through the options.

Why might you have overpaid?

There are a number of reasons why homeowners are overpaying their SDLT, and you might have seen reports in the media recently saying that such overpayments are becoming more frequent. Despite these reports, there seems to be a lack of understanding of the tax rules in this important area on the parts of both buyers and the property professionals who are there to help them.

HMRC is often accused of providing inadequate support in this area. Tax calculators are often poorly implemented. Training is sometimes inadequate or not provided in a timely enough fashion to deal with the frequent updates.

At the end of the day, SDLT is a tax and it often requires experienced tax experts such as Thomtax to untangle the many different threads. Properly assessing and calculating features such as land, woodland, separate annexes and outbuildings can have a significant impact on any SDLT due and could result in a refund if you have overpaid.

Making an accurate calculation can also ensure that you do not end up making an overpayment in the first place that you then have to claim back.

Some of the main reasons why homebuyers overpay are:

Changes in the tax

SDLT has been subject to frequent changes since its inception. Many exceptions, exemptions and reliefs apply, but these are not always properly understood by property professionals such as conveyers.

The HMRC calculator

HMRC has an SDLT calculator. Buyers and professionals frequently use this calculator as their main source of information when it comes to calculating SDLT, but it is essentially very basic and does not deal with the many nuances and variations in the tax system. HMRC itself says that its calculator should only be used as a guide.

Using the wrong professionals

Solicitors, conveyancers and agents all have their parts to play in property sales, but they are not generally tax experts and may make incorrect assumptions that lead to too much SDLT being paid.

Does your property qualify?

If your home cost in excess of £500,000 and the grounds contain land, woodland, outbuildings or annexes, then it is possible that you have paid too much SDLT, which would make you liable for a refund.

Annexes

If the property contains an annex such as a “granny flat” or separate living accommodation, then you could qualify for “mixed use” tax relief.

Outbuildings

Outbuildings such as barns on the grounds of your property could also significantly reduce your SDLT liability. If this has resulted in an overpayment, then you could be looking at a refund.

Land

If the property has more than 1.3 acres of land attached to it, then “mixed use” rules could potentially save you thousands in SDLT.

Woodland

Forestry land is often parcelled up alongside a residential property in the same transaction. This can provide another strong argument for “mixed use” and potential savings on tax due.

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