Overpayment Relief Unavailable if Grounds Not Raised in Tribunal or Court Appeal

When SDLT overpayment relief is blocked by appeal rights

You usually cannot use SDLT overpayment relief to recover tax if the same point could have been raised in an appeal about the amount of tax due. The rule is designed to stop overpayment relief being used as a second chance after the appeal process has ended or the time limit for appealing has passed.

• Relief is generally blocked if the ground for the claim could have been argued before a tribunal or court in an appeal about SDLT paid or due.
• HMRC also looks at whether the taxpayer knew, or ought reasonably to have known, about that ground before the latest relevant event, such as the appeal deadline, the appeal decision, a paragraph 37 determination, or withdrawal of the appeal.
• The test is not limited to what the taxpayer actually knew; it also includes what a reasonable person in that position should have known from the facts and documents available at the time.
• In practice, taxpayers should raise all realistic grounds during the appeal process, because holding back an argument and using it later in an overpayment relief claim is unlikely to work.
• To assess whether the block applies, identify the exact ground now relied on, decide whether it could have been raised on appeal, and review the timeline and the taxpayer’s knowledge before the latest relevant event.
• Disputes often arise over what the taxpayer should reasonably have known and whether the overpayment relief claim is truly based on a new point or one that was available earlier.

Scroll down for the full analysis.

When overpayment relief is blocked because the point could have been raised on appeal

This page explains a limit on SDLT overpayment relief. In simple terms, you cannot usually use an overpayment relief claim to raise a point that you could have raised in an appeal about the tax due. The rule matters because it stops overpayment relief being used as a second chance after the appeal route has passed or finished.

What this rule is about

Overpayment relief is a mechanism for recovering SDLT that should not have been paid. But it is not available in every case. One important exclusion applies where the reason for the repayment claim could have been argued before a tribunal or court in an appeal about the amount of SDLT paid or due.

The underlying idea is procedural finality. A taxpayer who disputes the amount due is expected to use the appeal process and to raise all relevant grounds there. Overpayment relief is not meant to reopen matters that could and should have been dealt with on appeal.

What the official source says

The HMRC manual says overpayment relief is not available if the grounds for the claim could have been put to a tribunal or court on an appeal relating to the amount paid or due.

It also says relief is not due if the person knew, or ought reasonably to have known, of those grounds before the latest of the following events:

• the end of the period in which the person could have made an appeal
• the date an appeal was determined by a court or tribunal
• the date an appeal was determined under paragraph 37 of Schedule 10 to Finance Act 2003
• the date the person withdrew the appeal

If more than one of those events has happened, the relevant question is what the person knew, or ought reasonably to have known, before the latest one.

The manual also states that an appellant is expected to consider and put forward all grounds of appeal they might rely on. It points readers to HMRC guidance on late appeals if an appeal was not made in time.

What this means in practice

The key practical question is not just whether an appeal was actually made. It is whether the point now being raised in the overpayment relief claim could have been raised in an appeal about the SDLT liability.

If the taxpayer already knew, or should reasonably have known, about that point while the appeal route was still open or before the appeal process ended, overpayment relief is likely to be blocked.

This means:

• you cannot usually hold back an argument and try to use it later in an overpayment relief claim
• if an appeal is underway, all realistic grounds should normally be considered and included
• if no appeal was made, the question may still be whether the taxpayer knew or should have known enough to appeal in time

The phrase “ought reasonably to have known” is important. It means the test is not limited to what the taxpayer actually knew. It also asks what a reasonable person in that position should have known from the facts and material available at the time.

How to analyse it

A sensible way to approach this issue is to work through four questions.

First, identify the exact ground now relied on for overpayment relief. Is it a legal interpretation point, a factual point, or both?

Second, ask whether that ground could have been put to a tribunal or court in an appeal about the amount of SDLT paid or due. If yes, the exclusion may apply.

Third, identify the relevant timeline. Look at:

• when the appeal window expired, if no appeal was made
• when any appeal was determined
• when any determination under paragraph 37 of Schedule 10 FA 2003 was made
• when any appeal was withdrawn

Fourth, ask what the taxpayer knew, or ought reasonably to have known, before the latest relevant event. This is the crucial time-based test in the manual.

In practical file review terms, relevant material may include the return, transaction documents, correspondence, advice received, and any facts already known to the taxpayer when the appeal could have been brought or was still ongoing.

Example

Illustration: a taxpayer files an SDLT return and pays tax. Later, they say the transaction was taxed on the wrong basis and submit an overpayment relief claim. If the facts needed to make that argument were already known when the taxpayer could have appealed, and the argument could have been raised in an appeal about the amount due, HMRC’s position is that overpayment relief is not available.

The same general approach applies if an appeal was in fact made but the taxpayer did not include that argument, even though they knew or should reasonably have known about it before the appeal was decided or withdrawn.

Why this can be difficult in practice

The main difficulty is often the knowledge test. It may not be obvious when a taxpayer “ought reasonably to have known” of a ground for challenge. That can be fact-sensitive.

Another difficulty is defining the “ground” itself. A taxpayer may say the overpayment relief claim relies on a different point from the one that could have been appealed. HMRC may take a broader view and say the substance of the argument was available earlier.

There can also be timing complications where there has been more than one procedural step, for example an appeal followed by a withdrawal or another form of determination. The manual says the latest relevant event is the one that matters for assessing what the person knew or should have known.

Finally, the manual points to the possibility of a late appeal. In some cases, the real issue may be whether the taxpayer should be trying to pursue the appeal route rather than relying on overpayment relief.

Key takeaways

• Overpayment relief is not a fallback for arguments that could have been raised in an appeal about the SDLT due.
• The taxpayer’s actual knowledge and what they ought reasonably to have known are both relevant.
• The timing matters: you test knowledge by reference to the latest relevant appeal-related event identified in the rule.

This page was last updated on 24 March 2026

Useful article? You may find it helpful to read the original guidance here: Overpayment Relief Unavailable if Grounds Not Raised in Tribunal or Court Appeal

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