Read the original guidance here:
HMRC SDLT: SDLT Adjustment Procedures for Contingency Changes or Consideration Ascertainment: Special Cases

SDLT50310 – Procedure: Adjustment when contingency ends or consideration is confirmed

This article provides guidance on the adjustments needed for Stamp Duty Land Tax (SDLT) when the original estimated consideration for a transaction changes. Adjustments are necessary when a contingency ends or when the consideration becomes clear. There are different scenarios where this occurs, and each has specific procedures to follow. Below are the key points to consider for each scenario.

1. Original Transaction Notified with No Tax Due

In this case, you submitted your original SDLT return, and no tax was due because the estimated consideration was below the required threshold. However, if you later determine that the actual consideration is higher than your initial estimate, you must take action.

Steps to Follow:

• Prepare a letter to the Stamp Office.
• Include the following details in your letter:
• UTRN: Provide the Unique Taxpayer Reference Number from the original return.
• Details of actual consideration: Clearly state the actual amount of consideration.
• Self assessment of tax due: If applicable, provide a self-assessment indicating the tax now owed.
• Tax payment: Ensure payment of any additional tax is made within 30 days from the date the actual consideration was confirmed.

2. Original Transaction Notified and Tax Paid

If you submitted your original return with an estimated consideration on which you calculated and paid SDLT, but now the actual consideration is known, further action is necessary.

Steps to Follow:

• Draft a letter addressed to the Birmingham Stamp Office.
• In your letter, include the following information:
• UTRN: Provide the Unique Taxpayer Reference Number from your original return.
• Details of actual consideration: Clearly state what the actual consideration amount is.
• Self assessment of tax due: Provide a self-assessment to indicate any additional tax owed.
• Additional tax payment: If your estimate was too low, you must pay the extra tax within 30 days of knowing the actual consideration. Alternatively, if your estimate was too high, you should request a tax refund.

3. Original Transaction Not Notified

In some situations, the original transaction may not have been reported because the estimated consideration was below the notification threshold. There are two paths from here:

Cases:

• If the actual consideration is still below the notification threshold on the effective date of the transaction:
• No further action is necessary.
• If the actual consideration now exceeds the threshold:
• You must complete and submit an SDLT1 form. Include all relevant transaction details.
• Note: The actual consideration refers to the confirmed amount, and the effective date relates back to the date of the original transaction.

Important Deadlines and Penalties

It’s important to be aware of deadlines for submitting your return, as penalties may apply for late submissions.

• The return that notifies the actual consideration must be submitted within 30 days of it becoming known. If you miss this deadline, you could face a penalty.
• In the third scenario mentioned above, a penalty is assessed from the effective date of the original transaction.
• If you have estimated the consideration too low, interest will start to accumulate on the tax payable from 30 days after the effective date.
• For tax refunds in case of an overestimate, interest will be calculated from when HMRC receives your refund request.

Deferment Under Section 90

If you claimed deferment under Section 90, be aware that the penalties and interest charges will apply from the date the contingency ended or when the consideration was confirmed.

• Review your Situation: If you are unsure whether penalties or interest apply to your case, it is best to review your specific situation to ensure compliance.

Final Notes

Each case described above outlines a different set of actions based on whether you have filed a return, whether tax was due, and whether the consideration was estimated or confirmed. It is essential to ensure accurate and timely reporting to avoid unnecessary penalties.