HMRC SDLT: SDLTM09760 – SDLT – higher rates for additional dwellings: Claiming a refund

SDLT Higher Rates for Additional Dwellings: Claiming a Refund

This section of the HMRC internal manual provides guidance on claiming a refund for the higher rates of Stamp Duty Land Tax (SDLT) applicable to additional dwellings. It outlines the principles and procedures involved in the refund process.

Eligibility criteria for claiming a refund.
Documentation required for the refund application.
Step-by-step guide on the refund process.
Timeframes for processing refund claims.
Contact details for further assistance.

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HMRC SDLT: SDLTM09760 – SDLT – higher rates for additional dwellings: Claiming a refund

SDLTM09760 – SDLT – Higher Rates for Additional Dwellings: Claiming a Refund

Understanding SDLT and the Additional Dwellings Rule

Stamp Duty Land Tax (SDLT) is a tax that you pay when you buy a property or land in England or Northern Ireland. If you purchase an additional dwelling, such as a second home or a buy-to-let property, you may be subject to higher rates of SDLT.

This section outlines the process for claiming a refund on this higher rate under specific circumstances.

Who is Affected by Higher Rates?

If you buy a property that is not your main home, you might have to pay the higher rates of SDLT. The higher rate usually applies if:

– You already own a residential property.
– The new property you are purchasing will be an additional dwelling.

When Can You Claim a Refund?

You can claim a refund of the higher rate of SDLT if your circumstances change. The typical scenarios that allow for a refund include:

1. Selling an Existing Property: If you sell your previous home, and the property you recently purchased was your main home when you bought it, you may be eligible for a refund.

2. Moving Your Main Residence: If the newly acquired property becomes your main home after selling your previous property, a refund can be claimed.

3. Disposal of Property: If you dispose of other properties or change your main home, you might qualify for a refund.

How to Claim Your Refund

To claim a refund for the higher rates of SDLT, follow these steps:

1. Check Eligibility: Make sure you qualify by reviewing the criteria listed above.

2. Gather Supporting Information: Collect any necessary documentation to prove your claim. This could include:

– A copy of the property sale agreement for any properties sold.
– Evidence to show the change of your main residence.

3. Complete the Claim Form: You will need to fill out form SDLT1 which can be found on the HMRC website.

4. Submit Your Claim: Send the completed form to HMRC along with any supporting documentation.

5. Await Decision: HMRC will review your claim and will typically respond within four weeks concerning your refund.

The Process in Detail

Let’s break down each of these steps further for a clearer understanding.

Step 1: Check Your Eligibility

Before starting your claim for a refund, confirm that you meet the required conditions. If you meet any of these scenarios, you should be able to claim:

– You have sold your previous main home within the stipulated timeframe.
– You have changed your main residence.

Step 2: Gather Supporting Information

Having the correct paperwork is essential when making your claim. Organise all relevant documents to avoid delays. Important items include:

– Sale documentation: This shows that you have sold the previous home. Look for official documents, invoices, or agreements that indicate the sale has taken place.

– Proof of residency: If you have moved your main residence, you may need letters, bills, or other official documents that illustrate your current living situation.

Step 3: Complete the Claim Form

The SDLT1 form is the formal document required to initiate a claim. Carefully complete the form and ensure that all information provided is accurate. Missing details can delay the process.

Make sure to:

– Fill in your contact details.
– State the reasons for your refund.
– Provide the transaction details for both the purchase and the sale.

Step 4: Submit Your Claim

Once you have completed the SDLT1 form and gathered your documents, send everything to HMRC.

You can submit your claim via post or through the online portal if you’re registered. Online submissions may be quicker and allow for easier tracking of your claim status.

Step 5: Await Decision

After submitting your claim, be patient while HMRC processes it. They aim to complete most claims within four weeks. If there are issues or if additional information is needed, HMRC will contact you.

Important Considerations

– Time Limits: You must submit your claim within a specified time after the purchase of the additional dwelling or after the sale of your original property. Keeping track of these deadlines is important to ensure a smooth claim process.

– Notification of Changes: It is your responsibility to inform HMRC of any changes to your circumstances that could affect your SDLT liability. If your eligibility changes after your purchase, notify HMRC as soon as possible.

– Interest on Refunds: If HMRC takes longer than their typical processing time, you may be entitled to interest on your refund.

Special Cases for Higher Rates

There are certain situations where the rules about higher rates may differ:

– Multiple dwellings: If you are purchasing multiple homes at the same time, the higher rates can apply on the purchase of any additional properties.

– Inherited Properties: If you inherit a property, it generally won’t affect your SDLT liability when you buy an additional home as long as it does not count as your main residence.

– Buying for Children: If you purchase a property on behalf of your children, these transactions can also be subject to the higher rates.

Remember to assess your situation carefully and ensure that you keep informed about the criteria for claiming higher rates and potential refunds.

Helpful Resources

To help you navigate the SDLT process further, consider referring to the following resources:

– HMRC website: Their official site can provide you with the SDLT1 claim form and more detailed guidance about the stamp duty process.

– Tax Advisory Services: Consult a tax advisor who can assist you in understanding your specific circumstances and ensure that you take appropriate steps for your refund claim.

– Online Forums: Engaging with community forums can provide additional insights and experiences from others who have gone through the SDLT refund process.

By staying informed and organized, you can successfully claim a refund on any higher rates of SDLT you have had to pay when acquiring an additional property.