Gepp Solicitors - Solicitors in Chelmsford, Essex

SDLT saving opportunities

If you have bought property, the chances are that you paid Stamp Duty Land Tax (SDLT) – but have you considered whether you have paid the correct amount of tax?

In England and Northern Ireland you’re usually liable to pay SDLT on increasing portions of the acquisition price when you buy property or land costing above a certain amount. Wales and Scotland have their own regimes which, although largely similar to England and Northern Ireland, are different.

SDLT has become much more complex in recent years, especially following the advent of surcharge for second properties and the reliefs available on some transactions. The 2024 Budget increased the surcharge from 3% to 5% overnight.

It has become apparent that a number of clients have overpaid their SDLT liability as they and their conveyancer were unaware of the reliefs that their property purchase qualified for.

SDLT can be at such a high level that many firms are offering schemes to reduce the SDLT payable, or to pay none at all. Most of the time, these schemes are convoluted and involve inserting artificial steps. HMRC have been cracking down on purchasers using such schemes as they simply do not work. When a scheme is proven not to work the buyer will have to pay the shortfall of SDLT to HMRC, plus interest and penalties. In addition, the cost of the scheme will likely have been a hefty proportion of the “saving”, as much as 30% in some cases, and it is unlikely that this will be recoverable from the scheme operator.

At Gepp Solicitors, we do things differently. We don’t involve artificial holding companies or include complex transactions. We adhere to the legislation and, with our expertise, your SDLT bill can be reduced significantly in certain circumstances. As part of the ethos of Gepp Solicitors we do not condone or endorse any tax avoidance schemes, and if clients come to us with details of a scheme that they have been offered we would never recommend that they enter into it. We only advise on legitimate methods that use current legislation to reduce your SDLT liability.

Whilst there are several available SDLT reliefs there are three main reliefs with which we have enabled our clients to make significant SDLT savings or enable repayments to be claimed.

The most common questions arising on SDLT are in relation to:

  • Mitigating the 5% surcharge on additional properties,
  • Identifying non-residential aspects of a residential purchase,
  • Whether a property should be considered derelict for SDLT purposes, and
  • Claiming Multiple Dwellings Relief (MDR) – abolished from 1 June 2024 (see below).

Each question is described further below.

Accreditations

For more information or advice

Contact Marc Dorsett on:
Call: 01245 228146 or
email: dorsettm@gepp.co.uk

Contact us

Call: 01245 228125 or email: privateclientenq@gepp.co.uk or request a call back.

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Area of Expertise

Stamp Duty Land Tax Experience

  • Ray and Deborah were selling the house which was their only residence and purchasing a house to be their replacement residence for £700,000. They also owned a further property worth about £300,000 which was rented out. They had concerns about the additional property surcharge applying to the purchase
    We were able to advise them that the 5% additional property surcharge wouldn’t apply as they were replacing their main residence.
  • Robert had bought a property which was uninhabitable and had paid the residential rates of SDLT. Robert approached us for advice about whether the non-residential rates should have applied. We reviewed the purchase and successfully made a claim for a refund of overpaid SDLT from HMRC.
  • Frank wanted to transfer a share in a property to his wife, Marie. There was a mortgage in Frank’s sole name and he had been advised by a friend at his local golf club that he could transfer the share tax free, but he wanted to double check before the transfer. We confirmed that SDLT was payable on part of the outstanding mortgage balance due to the assumption of debt rules.

Your Stamp Duty Land Tax Team

Kayleigh Barton

Trust Administration Assistant

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Marc Dorsett

Tax Partner

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Sarah Field

Trust and Estate Assistant

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Stamp Duty Land Tax FAQs

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If you want to find out more about the services we can offer you, please feel free to get in touch.

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