Errors made in assessing SDLT on property purchases are actively harming the market and may be hampering investment in the industry. If you have recently bought a property, unless you took the advice of a specialist tax adviser on your SDLT liability, you may have overpaid your Stamp Duty by thousands of pounds.
As an example, a property development firm client of Cornerstone based in Birmingham had purchased a large property for £1,415,000. At the time of completion, the land benefitted from planning permission to make structural alterations. The aim of these was to construct nine residential dwellings, with office space on the lower floors.
When instructed to evaluate the client’s portfolio, Cornerstone quickly identified that the site had been misclassified at the time of the purchase, and that Multiple Dwellings Relief was available at the time of completion.
As a result, they submitted a claim to amend the SDLT return to HMRC on 24 February 2020. Within a month, HMRC had agreed with the assessment and issued a refund for the sum of £34,590.93.
David Hannah, Founder and Principal Consultant of Cornerstone Tax who handled this case;
“Simple mistakes like these have a huge impact on the industry and the wider economy. We have seen countless such examples over the last few years and yet the problem stills persists. At a time when we need to be looking at the rebuilding of industries currently crippled by the worldwide health crisis, it’s more vital than ever that matters like these are handled right first time, every time.
Confidence in the market is hugely important at a time when the numbers of transactions are taking such a hit due to the lockdown. Knowing that the SDLT you are going to pay on your property is accurate could be the difference between buying a house or not and we should be doing all we can to encourage the market back onto its feet “