Read the original guidance here:
HMRC SDLT: SDLTM31905 – Application – Power of Attorney

Power of Attorney and SDLT Returns

The process of completing a Stamp Duty Land Tax (SDLT) return can often be complex. If you are unable to complete this return yourself, a Power of Attorney can help. Here is a simple breakdown of how this works and key points to remember.

Understanding Power of Attorney

A Power of Attorney is a legal document that allows someone (the attorney) to act on behalf of another person (the individual). This can be very useful in property transactions, such as when you are buying or selling land or property and need to submit an SDLT return.

Using Power of Attorney for SDLT Returns

According to Section 81B of the Finance Act 2003, an individual can have someone else complete their SDLT return if they have given that person the authority through a Power of Attorney. This is particularly important for the required declaration that confirms the return is accurate and complete.

The declaration necessary for the SDLT return must come from the purchaser(s) and it relates to two main parts of the legislation:

• Paragraph 1 of Schedule 10 (for paper returns)
• Paragraph 1A of Schedule 10 (for electronic returns)

Requirements for the Power of Attorney

The Power of Attorney must meet certain criteria in order to be valid for SDLT purposes:

• Written Document: The Power of Attorney must be a written document.
• Signature: The individual granting the Power of Attorney must sign the document.
• Specific Authority: The document must clearly authorise the attorney to act on behalf of the individual in matters relating to the SDLT return.

How to Complete the SDLT Return

When completing the SDLT return, the attorney is responsible for ensuring that all information provided is accurate and complete. Here’s a brief guide on how to proceed:

1. Gather Necessary Information

Before starting the return, make sure you have all relevant information, such as:

• Details of the property being bought or sold
• The purchase price of the property
• Any existing mortgages or liens on the property

2. Fill Out the SDLT Return

Once you have all the information:

• Access the appropriate SDLT forms online or obtain paper forms if necessary.
• Fill in the required details accurately.

3. Make the Declaration

As the attorney, you will need to make a declaration stating that the return is complete and accurate. This declaration must adhere to the requirements of Section 81B.

4. Submit the SDLT Return

After completing the return and declaration, submit it:

• If using electronic submission, follow the online guidelines.
• If using paper forms, send them to the correct address as indicated in the guidelines.

Important Considerations

Here are some critical points to keep in mind when using a Power of Attorney for SDLT returns:

• Check Validity: Ensure that the Power of Attorney is still valid. If it has expired or been revoked, you cannot act on behalf of the individual.
• Scope of Authority: Make sure the Power of Attorney covers the specific transaction for which you are acting.
• Seek Professional Help: If you are unsure about how to complete the SDLT return or about the legalities of the Power of Attorney, consider consulting a solicitor or tax advisor.

Examples of Power of Attorney in Action

Here are a couple of scenarios to illustrate how Power of Attorney functions in property transactions:

Example 1: Selling a Property

Imagine Sarah owns a house but is unable to handle the sale due to health issues. She can grant her friend Tom Power of Attorney, allowing him to manage the sale on her behalf. Tom will then complete the SDLT return, sign the necessary declarations, and submit them, ensuring everything is accurate and within legal requirements.

Example 2: Buying a Property

John wants to purchase a new home, but he is overseas for work. He can set up a Power of Attorney for his sister, Rachel. This enables Rachel to negotiate the property purchase and fill out the SDLT return in John’s name, ensuring that all steps are followed correctly.

How to Create a Power of Attorney

Creating a Power of Attorney generally involves several steps:

• Understand the Types: There are different types of Power of Attorney, including General, Lasting, and Enduring Power of Attorney, each suited for various circumstances.
• Draft the Document: You can draft the Power of Attorney yourself or use a template. However, it’s advisable to get professional help to ensure it meets all legal requirements.
• Sign in Front of Witnesses: The individual granting the Power of Attorney must sign the document in front of a witness.
• Make Copies: Keep copies of the Power of Attorney document for record-keeping and provide one to the attorney.

Submitting the SDLT Return

Once the SDLT return is completed and the declaration made, it is important to submit it as soon as possible:

• For paper returns, ensure you send them to the right address, which is usually outlined in the SDLT guidance.
• For electronic submissions, follow the specific steps provided in the online portal where the SDLT return is submitted.

Final Thoughts on SDLT and Power of Attorney

Understanding how to use Power of Attorney for SDLT returns can make property transactions smoother, especially for individuals who cannot attend to their affairs personally. Always ensure that you comply with legal requirements and maintain accurate records throughout the process.

Remember that being an attorney comes with responsibilities. Always act in the best interest of the person you are representing and keep them informed about all transactions and correspondences.