How to claim a refund from HMRC
Emma Ellis, a Solicitor in the Residential Property team, discusses how to apply to HMRC for a repayment of the stamp duty land tax payable on additional properties when you qualify for a refund.
On 1 April 2016 stamp duty rates were increased if you were purchasing an additional property and the new property did not replace your main residence. The higher rates apply even if your existing residential property is outside England, Wales or Northern Ireland.
However, you can apply to get money back from HMRC if you meet certain criteria.
If you sell your main residence within three years from the date your new purchase completed, you can make a claim for a refund to HMRC. The refund would be for the difference between what you paid at the higher rate and what you would have paid if the higher rate had not applied.
For example, if you buy a second property for a price of £850,000, without selling your main residence, the stamp duty due would be £58,000 instead of the lower rate of £32,500 (rates pre SDLT holiday). If you sell your main residence within three years from legal completion of your purchase, you can apply for a refund of £25,500.
You can claim a refund by completing a SDLT repayment request form which can now be completed electronically as well as by post. If you sold your previous main residence on 28 October 2018 or earlier, HMRC must have your request within 3 months of the sale of that previous main residence, or within 1 year of the date on which the stamp duty was filed on the purchase – whichever is later.
If you sold your previous main residence on 29 October 2019 or later, HMRC must have your request within 12 months of the sale of that previous main residence, or within 12 months of the filing date of the return relating to the new residence – whichever is later.
To be able to complete the form you will need the following details;
- details of the property that attracted the higher rates of SDLT, including the date of purchase and the SDLT unique transaction reference number;
- details of the previous main residence you’ve sold, including the date of sale, the address of the property and the name of the buyer;
- the amount of tax paid on the property that attracted the higher rates of SDLT; and
- the amount of tax you’re asking for a repayment of.