Have you experienced difficulties with higher rate SDLT? Please complete our survey by 29 August
HMRC released figures on 28 July showing the impact of the additional 3 per cent stamp duty land tax ( SDLT) charged to buyers of second homes and buy-to-let property.
Whilst this has produced more revenue, it also seems to have produced some difficulties for you and your clients. To assist our further discussions with HMRC please complete our survey.
In the six months to the end of June 2017 there were 60,000 higher rate transactions producing £1bn out of a total of £1.8bn SDLT receipts. Whilst some people are buying second properties and the additional tax is payable, some others are only liable to pay the higher rate SDLT because they buy another home before they have been able to sell their former home. Those people are obliged to pay the SDLT and then, provided that they sell their main residence within three years of buying another property, reclaim the higher rate tax paid.
It appears from the HMRC figures that 6,800 additional property refunds totalling £80m were paid in 2016/17, with a further £47m repaid in the second quarter of 2017.
It has been suggested that approximately 25% of residential purchases which are liable to SDLT (cost more than £125,000) are subject to the higher rate charge . It is not clear what proportion of this will be reclaimed. Multiple dwellings relief may be available in some circumstances.
Since the introduction of the higher rate SDLT in April 2016, you have told us about some of the difficulties you have had in interpreting the guidance from HMRC. An update to this guidance was published in March 2017.
The nature of the change to SDLT introduced in April 2016 is very different from changes to SDLT that involve a rate change. It requires clients to provide full details about their property ownership and possibly their marital status.
The emergence of companies who tell clients they can claim back overpaid higher rate SDLT demonstrates that the current system may not sit happily within the residential conveyancing process.
Please let us have details of your experience with this tax by completing our survey by 29 August 2017. We will discuss the results with HMRC.
For more information see HMRC's guidance and statistics.