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Where Taxpayers and Advisers Meet

Out of time SDLT 3% Refund

nomadic
Posts:6
Joined:Mon Sep 22, 2014 10:00 am
Out of time SDLT 3% Refund

Postby nomadic » Sat Oct 29, 2022 4:30 pm

Afternoon all,

I wonder if you can provide some assistance, guidance. I have applied for the 3% refund and have been told that my request is out of time. I understand from briefly reading the web that there is an HMRC guidebook on this and it is open to interpretation. My question for the forum is if anyone has successfully appealed an out of time refund and how they did it.

Here is the back story:

I bought a home (A) back in 2019. Hated it and decided to rent it out and bought another place (B)in late 2019 while keeping it. Paid the 3% additional SDLT on home B.

Roll forward to late 2020 and we discover that our child is not in the catchment of the desired school and try to sell home A and B to get a sale for onward purchase. End up selling home A and buying Home C (current) at the start of 2021 and get into desired school (hooray). No additional SDLT is paid on home C as home A is sold before home C is purchased. My interpretation
at the time was that I had two homes and therefore no additional stamp duty was applicable.

Roll forward to today and we have sold Home B. I thought this was the point of when I could apply for an SDLT refund as I am going from 2 homes to 1. The time lapse is circa 20 months from the sale of home A.

What I understand is that I should have claimed the refund on Home B and paid additional SDLT on Home C? The price difference between the two homes was circa £30K, so I imagine I am technically liable for the difference on that difference. Yet there is no time limit of me owing tax to HMRC, yet they can time box me into not making a claim.

I've spoken to a few firms who want £1,500 plus VAT to advise me on if I can appeal this.

Thanks in advance.

bd6759
Posts:4234
Joined:Sat Feb 01, 2014 3:26 pm

Re: Out of time SDLT 3% Refund

Postby bd6759 » Sat Oct 29, 2022 11:30 pm

You do not get a refund on the sole grounds that you have disposed of a property and no longer have more than 1.

The problem you have is that you did not pay the correct SDLT when you acquired house C. On that day you owned more than one dwelling and had not disposed of a previous dwelling. House A does not count as a previous dwelling because you subsequently acquired house B which became your dwelling.

When you sold B you could have reclaimed the additional 3% you ought to have paid when you bought house C, because you were then disposing of a previous residence.

In the round, you have paid the correct SDLT. But HMRC could penalise you for submitting an incorrect return and paying the wrong amount when you acquired C.

billypiper
Posts:114
Joined:Wed Aug 06, 2008 4:10 pm

Re: Out of time SDLT 3% Refund

Postby billypiper » Sun Oct 30, 2022 1:06 pm

Obtain a formal written decision from HMRC Stamp duty that they will not refund the SDLT.

Any decision by HMRC is subject to an appeal within 30 days.

If you need assistance call me

Dennis Wren

Taxesclear

07802704840

someone
Posts:686
Joined:Mon Feb 13, 2017 10:09 am

Re: Out of time SDLT 3% Refund

Postby someone » Sun Oct 30, 2022 5:08 pm

The order of transactions is critical here.

I think it went:

Own Home A
Buy Home B (pay 3% surcharge A+B - A no longer a home)
Sell Home A (triggers refund of 3% surcharge on B)
Buy Home C (pay 3% surcharge B+C - B no longer a home)
Sell Home B (triggers refund of 3% surcharge on C)

You seems to have messed things up by linking the sale of A to the surcharge on C - which implies that you didn't think B was your home (which HMRC might be inclined to agree with due to the short period of ownership)

I have no idea whether it's feasible to resolve this now - but I can understand why firms want 1500 to investigate as there's going to be a lot of paperwork needed to establish that B really was a home.

bd6759
Posts:4234
Joined:Sat Feb 01, 2014 3:26 pm

Re: Out of time SDLT 3% Refund

Postby bd6759 » Mon Oct 31, 2022 9:26 am

There is more than 3 years between the acquisition of B and the sale of A, so refund is not due.

someone
Posts:686
Joined:Mon Feb 13, 2017 10:09 am

Re: Out of time SDLT 3% Refund

Postby someone » Tue Nov 01, 2022 8:48 am

There is more than 3 years between the acquisition of B and the sale of A, so refund is not due.
You might be right, the OP isn't very clear but I read it as bought B in late 2019 and sold A at start 2021. Bought C at start 2021 and sold B Q3/4 2022.

nomadic
Posts:6
Joined:Mon Sep 22, 2014 10:00 am

Re: Out of time SDLT 3% Refund

Postby nomadic » Tue Nov 01, 2022 9:57 pm

You seems to have messed things up by linking the sale of A to the surcharge on C - which implies that you didn't think B was your home (which HMRC might be inclined to agree with due to the short period of ownership)
Apologies for the late reply, I wasn't notified of further replies, only the initial one.

The above is partially correct, I did incorrectly link the sale of home A to the surcharge on home C. B was my home, I have utility and council tax bills for all three properties. So that wasn't the mistake. And I doubt any sane person moves home 3 times in under 3 years... Based upon other replies, the transaction time of 3 years has been met, it is the application for refund that hasn't been. Also, I don't believe I did nomination of home during that time...

someone
Posts:686
Joined:Mon Feb 13, 2017 10:09 am

Re: Out of time SDLT 3% Refund

Postby someone » Wed Nov 02, 2022 7:59 pm

You seems to have messed things up by linking the sale of A to the surcharge on C - which implies that you didn't think B was your home (which HMRC might be inclined to agree with due to the short period of ownership)
Apologies for the late reply, I wasn't notified of further replies, only the initial one.

The above is partially correct, I did incorrectly link the sale of home A to the surcharge on home C. B was my home, I have utility and council tax bills for all three properties. So that wasn't the mistake. And I doubt any sane person moves home 3 times in under 3 years... Based upon other replies, the transaction time of 3 years has been met, it is the application for refund that hasn't been. Also, I don't believe I did nomination of home during that time...
AIUI nomination for CGT is irrelevant. SDLT is decided on the facts.

The problem isn't the theoretical application, it's convincing HMRC that that is the correct interpretation.

HMRC could equally argue that neither A nor B were main homes with a view to permanence. In which case, not only are you not entitled to another refund, the refund you did get isn't correct either and they could demand it back.

As you said yourself "And I doubt any sane person moves home 3 times in under 3 years"


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