Overpaid Stamp Duty? You Might Be Owed a Huge Refund

If you’ve overpaid Stamp Duty Land Tax (SDLT) on a property purchase in England or Northern Ireland, you may be eligible for a refund. Refunds can apply in cases such as selling your previous main home after paying higher rates or mistakenly paying the wrong SDLT category. Below is a comprehensive guide on who can claim a refund, how to apply, and what to expect from HMRC.

Who Can Claim an SDLT Refund?

You may be able to get a refund of overpaid SDLT if any of the following situations apply:

1. You Paid Higher Rates When Buying a New Main Home

If you bought a new main home but had not yet sold your previous one, you likely paid an additional 5% SDLT surcharge (higher rates for additional properties). You can apply for a refund of this extra 5% if:

 Your new home replaces your main residence.
 You sold your previous main home within 36 months of completing the new purchase.

What If You Sold After 36 Months?

You may still be eligible for a refund if:

 You bought your new home on or after 1 January 2017.
 Exceptional circumstances (such as government restrictions or legal issues) prevented the sale.
 You have now sold your previous home.

2. You Were Not a UK Resident at the Time of Purchase but Are Now Considered a UK Resident

Non-UK residents buying residential property in England or Northern Ireland must pay a 2% SDLT surcharge.

You can claim a refund of this 2% surcharge if:

 You have been physically present in the UK for at least 183 days (6 months) within a continuous 365-day period that includes:

• The year before the completion date, and
• The year after the completion date.

Example: If you bought a property on 12 October 2022, but you spent 3 months in the UK from September to November 2022 and another 3 months from May to July 2023, you meet the 183-day rule and may claim a refund.

Important: This refund only applies to individual buyers, not companies.

3. You Were Eligible for an SDLT Relief or Exemption but Did Not Claim It

If you failed to claim SDLT relief or an exemption when filing your original SDLT return, you can apply for a refund. Reliefs include:

Charity purchases
Right to Buy properties
Social housing provider exemptions

4. You Paid the Residential Rate Instead of the Non-Residential Rate

If you mistakenly paid SDLT at residential rates when your property should have been taxed as non-residential or mixed-use, you can claim a refund for the overpaid amount.

5. You Made a Mistake in Calculating SDLT

Errors in SDLT calculations or paying more than the amount owed can result in overpayment. If this happened:

 You can apply for a refund of the excess amount.
 If you used a tax agent, you are still responsible for the accuracy of the claim.

How to Apply for an SDLT Refund

Key Points Before You Apply

 If more than one person was involved in the purchase, all purchasers must be included in the refund claim.
 If an agent submits the claim on your behalf, you remain responsible for its accuracy.

Steps to Apply for an SDLT Refund

1. Apply for a Refund of the Higher Rates (5% Surcharge) on a Main Home

• Online Application: Use the HMRC SDLT refund portal.
• By Post: If online submission isn’t possible, you can send a written application to HMRC’s SDLT refund department.

2. Apply for a Refund of the 2% Non-Resident Surcharge

• Provide evidence that you were present in the UK for at least 183 days within the qualifying period.
• Submit your claim online or by post.

3. Apply for Other SDLT Refunds

If you:
 Paid the residential rate instead of the non-residential rate
 Failed to claim SDLT relief
 Overpaid SDLT due to an error

You can apply for a refund either online or by post through HMRC.

How Will You Receive Your Refund?

Refund Processing Time:

• HMRC typically processes SDLT refunds within 15 working days.
• If additional information is required, HMRC may contact you by post, which can delay the process.

What Happens If Your Refund Claim Is Wrong?

• If HMRC later finds your claim to be incorrect, you must repay the refund in full, along with any applicable interest and penalties.

If you overpaid SDLT for any reason, you may be eligible for a refund. Whether it’s due to selling a previous home after paying higher rates, correcting an SDLT filing mistake, or meeting UK residency requirements after purchase, applying for a refund through HMRC is straightforward. Make sure to submit the correct documents and meet the application deadlines to avoid delays.

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