Refund of the higher rates SDLT

Refund of the higher rates SDLT after 3 years due to exceptional circumstances

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I wonder if anyone has had any sucess claiming a refund of the higher rate of SDLT where a client has sold a second property past the 3 year window due to exceptional circumstances (COVID).

 

The guidance states:

prevention of the sale as a result of a restriction imposed by a public authority (e.g. the government restrictions placed on the housing market as a result of the COVID-19 pandemic).

I thought it might be worth trying for a client, as they exceeded the 3 years by 4mths, COVID was at play in this case.

Really appreciated and examples of where you have sucessfully got a repayment post the 3 year window.

Replies (5)

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By Bobbo
10th Jun 2024 11:26

When was the new property bought?
When was the old property sold?

I would think that now we're what two years since all restrictions were removed that claiming covid restrictions as a cause for delay of sale wouldn't carry much weight.

Consider Example 2 of this https://www.gov.uk/hmrc-internal-manuals/stamp-duty-land-tax-manual/sdlt...

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By VCM Accountants
10th Jun 2024 11:59

They tried to sell their family home in late 2020 to buy another family home (with a new partner). COVID had a big impact on the sale of the former home, it kept falling through. They were at risk of losing the new home, so they let the old home. Originally for a fixed 24 month period with the view to try to sell at that point. Unfortunately they couldn't remove the tenants, ended up in court, huge delays with this process due to COVID. Property empty for best part of a year waiting for new sale.

Thought It might be worth a shot.

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Replying to VCM Accountants:
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By Bobbo
10th Jun 2024 13:38

As Jason says the client may as well have a go at a claim.

My uninformed view is that letting the property for a 24 month period was essentially firing a howitzer at their foot. Was the property being marketed for sale with a tenant in situ?

Unclear what letting the old home has to do with being at risk of losing the new home, as seemingly they didn't need the money from selling old home to buy new home.?

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VAT
By Jason Croke
10th Jun 2024 12:07

I don't have direct experience of claiming for the SDLT refund where the client has slightly gone over the timeframes. My client claims are all in-time but one day I am sure I will get a lat claim request.

My view on these sort of situations (borderline, edge type stuff, be it SDLT or VAT), is that it is always worth a punt, a couple of hours of your time with the potential to succeed is surely worth doing rather than telling the client they are out of time.

As it is SDLT being clawed back, it'll be a decent sum of money, so from the clients perspective they'd be stupid to not at least try and submit a claim and the only cost to them will be some of your time to draft a letter, which details the Covid, unable to evict tenants, you can include some evidence such as court reports, eviction notices and chances are HMRC may allow it.

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By Tax Dragon
11th Jun 2024 06:18

The same 'guidance' also states:

"The types of circumstances that may qualify as exceptional usually affect large groups of people and not only the buyer or seller in an individual transaction."

and

"To be eligible for the refund, you must sell your previous home without further delay once the reason for the original delay has ended."

I wouldn't get your client's hope's up. And I would suggest agreeing any additional fee with them before incurring time writing letters.

But good luck on both counts.

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