Interest on an SDLT repayment: when does it run?
SDLT repayment interest
When HMRC repays overpaid SDLT, interest normally runs from payment until it issues the repayment order.
- Keep evidence of both dates.
- The rule also covers repaid penalties.
- Check current law for later repayments.
Scroll down for the full analysis.
Read the original guidance here:
Interest on an SDLT repayment: when does it run?
When HMRC accepts that you paid more stamp duty land tax than was due and repays the overpayment, the repayment should normally include interest. That is the usual result.
The period starts when you paid HMRC. It ends when HMRC issues its repayment order, even if the money reaches your bank later rather than arriving on the date of that order. That end date matters.
What this rule is about
Interest is intended to reflect the period during which HMRC holds money that it should not have kept, including where the repayment concerns SDLT or certain related amounts.
It is paid before any return of the money. This rule covers SDLT and certain related amounts.
What the official source says
For guidance, HMRC’s manual directs readers to the rules on interest for overpaid tax, while the legislation rather than the manual sets the legal position. The legislation controls.
- A repayment of overpaid SDLT should include interest.
- A repaid SDLT penalty is also covered.
- Money lodged with HMRC for SDLT is covered too.
- The rate is the rate set by the linked statutory rule.
What this means in practice
Start with the date on which you made the payment, then compare it with HMRC’s repayment-order date before deciding how far the interest period can run. Do not assume that interest continues until the money reaches your bank.
Section 89 instead uses the date when HMRC issues the repayment order.
- Keep proof of the payment date.
- Keep HMRC’s repayment notice or letter.
- Check whether the repayment includes tax, a penalty, or both.
How to analyse it
Work through a simple sequence of questions. Identify what HMRC repaid and when each relevant event occurred.
- Has HMRC accepted that it must make a repayment?
- Was the amount SDLT, a penalty, or money lodged for SDLT?
- When did you make that payment or lodge that money?
- When did HMRC issue the repayment order?
Example
After Sam paid £1,000 of SDLT, HMRC later agreed that the amount had been overpaid and that, under the rule, a repayment was due to him. The date Sam received the money does not control.
Where the repayment is covered by the rule, interest should normally run from Sam’s payment date to the date on which HMRC issued its repayment order.
Why this can be difficult in practice
The key dates may appear in different letters, bank records and online account messages. A separate exception applies where an order or judgment can itself award interest.
- The repayment-order date may differ from the bank payment date.
- The supplied source does not give a current interest rate.
- Interest paid under this rule is not income for tax purposes.
Key takeaways
- Interest normally accompanies an SDLT repayment.
- It normally starts when you paid HMRC.
- It normally ends when HMRC issues the repayment order.
Technical analysis
For advisers, and for anyone who wants to check the law behind this page. You do not need this section to understand the guidance above.
Legislation
- FA 2003 section 89 — interest on SDLT repayments and repaid penalties
Official guidance
The pages below are HMRC’s guidance. Guidance is not law. It sets out how HMRC reads the legislation, and it is not binding on you, on a tribunal or on a court. Where guidance and the legislation differ, the legislation wins. HMRC can also change or withdraw guidance, and it may not cover your facts.
Where this is not settled
- The supplied HMRC page does not state the interest rate or explain HMRC’s administrative repayment process.
- The supplied statutory text is current only to 17 November 2025. The current wording and rate should be checked for a later repayment.
Evidence you would need
This kind of case is decided on the facts of the individual property. These are the records that usually settle it, and the ones an adviser would ask you for.
- proof of the original SDLT payment or money lodged with HMRC
- HMRC’s repayment decision and repayment-order date
- details of any penalty included in the repayment
- any order or judgment connected with the repayment
Explore this with an AI
Readers often want to test their own situation. Copy the prompt below into ChatGPT, Claude or Gemini. It hands the model the actual legislation for this page rather than letting it answer from memory, and tells it to be explicit about what is uncertain. What comes back is information, not advice – check it against the links above.
I am researching UK Stamp Duty Land Tax (SDLT), which applies in England and Northern Ireland. MY QUESTION Interest on an SDLT repayment: when does it run? [Replace this with your own situation: what you are buying, the price, the dates, who the buyer is, and what you plan to do with the property.] THE LAW THIS TURNS ON - FA 2003 section 89 - interest on SDLT repayments and repaid penalties https://www.legislation.gov.uk/ukpga/2003/14/section/89/2025-11-17 HMRC's guidance page on this topic (guidance, not law): https://www.gov.uk/hmrc-internal-manuals/stamp-duty-land-tax-manual/sdltm50800 HOW I WANT YOU TO ANSWER 1. Work from the legislation above. Read it before answering. HMRC guidance is HMRC's view of the law, not the law, and does not bind a tribunal or a court. 2. Tell me what the rule actually requires, in plain English. 3. Tell me which facts decide the answer, and which facts would change it. 4. Tell me what evidence I would need to support the position. 5. Be explicit about anything unsettled or fact-sensitive. Do not guess. 6. Your training data has a cutoff and SDLT rates and reliefs change at fiscal events. Say so if you are not sure the law is current. POINTS ALREADY KNOWN TO BE UNCERTAIN ON THIS TOPIC - The supplied HMRC page does not state the interest rate or explain HMRC's administrative repayment process. - The supplied statutory text is current only to 17 November 2025. The current wording and rate should be checked for a later repayment. Do not give me a conclusion you cannot support from the provisions above.
Legislation links show Finance Act 2003 as it stood on 2025-11-17. The law may have changed since, and the rules that apply are those in force on the date of your transaction. The official guidance this page is based on is here.
This page was last updated on 1 September 2026
Useful article? You may find it helpful to read the original guidance here: Interest on an SDLT repayment: when does it run?
Search Land Tax Advice with Google
