Stamp duty FAQs.

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First Legal Solicitors Limited work with a team of legal experts, who are dealing with claims like yours. Your claim will be assessed by one of our experts and if you qualify, you will then be passed to a dedicated handler, so you always have someone to contact.

What is stamp duty land tax?

Stamp duty land tax (stamp duty) is a tax targeted at buyers of land, property and rights over property (like leases). You pay stamp duty when you purchase property, or a piece of land. Not all purchases attract stamp duty. The rules over when you pay stamp duty and how much you pay are extremely complicated. Generally, the following 7 factors will effect whether and how much you have to pay:

1. Whether the land/property is used for commercial purposes;
2. Whether the property was classed as uninhabitable at the point of purchase;
3. How much you paid for the land;
4. Who you are: an individual, a company, a partnership;
5. Where you live: if you are a UK resident or non-resident;
6. Why you brought the land/property;
7. Whether you have bought anything else in a related transaction.

When and how do you pay?

You normally have to pay stamp duty within 14 days of when your property or land transaction completes. However, if you pay some money before completion or use a non-traditional agreement of purchasing land, you may have to pay stamp duty in multiple parts. To pay, you need to fill out a land transaction return on specific forms and send it to HMRC. Sometimes you will also need to send a letter explaining matters not covered on the forms. Your solicitor normally handles this for you at the same time as they manage the transaction. Typically, they will then make the payment to HMRC on your behalf.

Why do you pay stamp duty?

In 2003 the government reformed the way it taxed purchases of land and created a new tax called stamp duty land tax which only applied to the buyer of land/property. There were a number of reasons for this but the main two where:

1. Stamp duty was too easy to avoid – stamp duty land tax is much more difficult to legally avoid paying; and
2. Stamp duty was complex, was not always fair and sometimes did not make much sense. Stamp duty land tax is still complicated and is, when people are not overpaying in the billions, perhaps a little fairer.

Can you avoid paying stamp duty?

There are certain ways to reduce stamp duty liability – by applying for reliefs or taking advantage of exemptions. Your advisor (typically your conveyancing solicitor) should deal with this and advise you accordingly. But in the main, where a transaction attracts stamp duty, you must pay it.

Who is eligible for a refund?

HMRC estimate that over £ 2 billion in stamp duty is overpaid each year. These overpayments often arise because the conveyancing solicitor at the time have made mistakes when filing a return on your behalf. The criteria for paying stamp duty is complex and mistakes can be made when entering the data relating to the purchase of a property into the HMRC calculator. Other reasons are not understanding the rules surrounding stamp duty and reliefs available or simply making a costly error. If it can be proved that an overpayment of stamp duty has been made, then a claim for repayment can be instigated to HMRC or to the conveyancing solicitor if out of time.

Is there a deadline for stamp duty refund claims?

Yes there is. To reclaim an overpayment from HMRC the deadline is usually 12 months and 14 days from when you paid the stamp duty. In extremely limited circumstances that deadline can be extended up to 4 years and 14 days. If you are too late to claim the repayment from HMRC (which is usually a quicker and more certain process) you can bring a court claim against the conveyancing solicitor who dealt with the purchase for you if their advice or work was negligent and it caused you to overpay. In either scenario, we can help!