Is an SDLT refund claim still in time if HMRC has already received it before the 4-year deadline?

Introduction

A common concern with Stamp Duty Land Tax refund claims is the 4-year time limit. This often comes up where a buyer argues that a property was not suitable for use as a dwelling on the effective date of the transaction and should therefore have been taxed at non-residential rates instead of residential rates.

The practical worry is simple: if HMRC is slow, asks for more documents, or appears to have misplaced part of the correspondence, can HMRC later say the claim is out of time? In general, if the claim was made and received within the statutory time limit, later HMRC processing delays do not usually make it late.

The Question

A buyer purchased a property some years ago and later submitted an SDLT refund claim on the basis that the building was not suitable for use as a dwelling at the effective date. As the 4-year deadline was approaching, the buyer became concerned about whether HMRC had everything it needed and whether a further chase or re-submission was necessary to protect the claim.

The background materials referred to serious physical problems with the building, later demolition and replacement, and supporting planning material said to show that the original structure was in very poor condition.

Nick’s Explanation

Nick’s key point was that the timing question turns on when the claim was submitted and received, not on when HMRC eventually decides it. In anonymised form, his explanation was:

“Since the claim was submitted and received by HMRC some time ago, it is well within the time limit. HMRC are currently holding claims of this type while they finalise their legal position. Recent contact with HMRC indicated that further communication should be expected in due course.”

He had also previously explained that where HMRC’s records appeared incomplete, the practical answer was to re-send the material with an updated covering letter making clear that the later submission was a follow-up to the earlier claim.

That is a sensible procedural step. It does not usually change the original date of claim if the first claim was already validly made in time, but it can help avoid administrative confusion.

The Law

SDLT is charged under the Finance Act 2003. Whether property is residential or non-residential matters because different rates can apply. Section 116 of the Finance Act 2003 contains the statutory definition relevant to whether property is “residential property”, including whether a building is suitable for use as a dwelling.

Where too much SDLT has been paid, a taxpayer may seek amendment or repayment, but the claim must normally be made within the statutory time limit. In broad terms, SDLT amendment and overpayment procedures are time-sensitive, and the 4-year limit is often critical in practice.

For “not suitable for use as a dwelling” arguments, the condition of the property is assessed at the effective date of the transaction. The modern appellate guidance is now much stricter than many earlier taxpayers assumed.

In particular, the threshold in uninhabitable or not suitable for use cases is now relatively high following Amarjeet and Tajinder Mudan v The Commissioners for HMRC [2025] EWCA Civ 799. The Court of Appeal made clear that disrepair, poor condition, or the need for substantial works will not automatically stop a building being a dwelling for SDLT purposes. The question is objective and focuses on whether the property still retained the fundamental character of a dwelling.

Analysis

The issue has two separate parts:

1. whether the claim was made in time; and
2. whether the underlying “not suitable for use as a dwelling” argument is strong enough.

On the first issue, if HMRC received the claim before the 4-year deadline expired, the claim is generally in time. A later request for further evidence, a re-submission of papers, or delay within HMRC does not normally mean the claim has become out of time. The important point is to be able to show that a valid claim was lodged within the statutory period.

If HMRC says it only has part of the file or only recognises an earlier related case, the safest course is usually to send the documents again with a clear covering letter. That letter should explain:

• the date of the original claim;
• that the claim was previously submitted within time;
• that the enclosed material is a follow-up or duplicate for ease of reference; and
• what decision or repayment is being sought.

On the second issue, the merits of the claim depend on the condition of the property at completion. Evidence such as severe damp, water ingress, roof failure, infestation, structural degradation, planning documents, demolition approvals, photographs, contractor correspondence, and expert evidence may all help. But after Mudan, the bar is high.

The Court of Appeal in Amarjeet and Tajinder Mudan v The Commissioners for HMRC [2025] EWCA Civ 799 rejected the idea that a property becomes non-residential merely because it is not immediately habitable or falls below modern living standards. The court’s approach is objective and multi-factorial. Relevant questions include whether the building:

• had previously been used as a dwelling;
• retained the structural and functional features of a dwelling;
• required repair or instead total reconstruction;
• was dangerous or unsafe to occupy; and
• had effectively ceased to be a dwelling and become a development site.

So, even if a building was in very poor condition, the taxpayer must still show more than neglect or serious disrepair. The strongest cases are those where the property had truly lost its identity as a dwelling by the effective date.

In the scenario described, the fact that demolition and replacement were pursued soon after purchase may support the argument, especially if planning and technical documents show that reconstruction was necessary rather than elective. However, demolition after purchase is not conclusive by itself. HMRC and the courts will still ask what the building was like on the effective date and whether it objectively remained a dwelling at that point.

Outcome

If the SDLT refund claim was submitted and received by HMRC before the 4-year deadline, the claim should generally remain in time even if HMRC is slow, asks for more information, or requires papers to be re-sent.

However, being in time is only one part of the problem. Success on the substance of a “not suitable for use as a dwelling” claim is now harder after Amarjeet and Tajinder Mudan v The Commissioners for HMRC [2025] EWCA Civ 799, because the legal threshold is relatively high.

Practical Steps

If you are in a similar position, the sensible next steps are:

1. Check the original submission date and keep proof that HMRC received the claim.
2. Keep copies of the full claim pack, attachments, and covering letters.
3. If HMRC appears not to have the papers, re-send them promptly with a clear explanation that this is a follow-up to an earlier in-time claim.
4. Gather objective evidence of the property’s condition at the effective date, including photographs, surveys, planning documents, contractor opinions, and correspondence created close to completion.
5. Test the facts carefully against the stricter approach in Mudan, especially whether the property had genuinely lost the character of a dwelling.
6. Record any HMRC calls or correspondence confirming that the claim is under review or being held pending policy or litigation developments.

Conclusion

The main timing point is straightforward: if HMRC received the SDLT refund claim before the 4-year deadline, later administrative delay should not usually make it late. The harder question is whether the building was truly not suitable for use as a dwelling at the effective date. After Mudan, that is a demanding test and requires strong objective evidence.

Legal References Used

• Finance Act 2003, including section 116(1)(a)
• Amarjeet and Tajinder Mudan v The Commissioners for HMRC [2025] EWCA Civ 799

This page was last updated on 22 March 2026.

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