Can You Amend an SDLT Return for an Auction Purchase Using the Memorandum of Sale?

Introduction

People often ask whether an auction purchase can support a Stamp Duty Land Tax refund claim, especially where HMRC asks for the contract and transfer documents when an SDLT return is being amended. The issue matters because auction transactions are usually documented differently from ordinary private treaty purchases. Instead of a conventional signed sale contract in the usual form, the buyer may have a memorandum of sale and auction conditions.

A related question is whether a property bought in poor condition can qualify as non-residential for SDLT purposes. That depends on the facts and the legal tests, and the threshold for showing a dwelling was not suitable for use as a dwelling is now relatively high following Amarjeet and Tajinder Mudan v The Commissioners for HMRC [2025] EWCA Civ 799.

The Question

The general question is this: where a purchaser bought a property at auction and later wants to amend the SDLT return to seek a repayment, can the buyer rely on the auction memorandum of sale and the auction conditions as the required contract documents for HMRC?

A further point raised was whether this approach helps in cases involving distressed, semi-derelict or ex-local authority property, and whether the same type of reclaim can be pursued outside England and Northern Ireland.

Nick’s Explanation

Nick’s explanation was that auction SDLT reclaim cases had initially faced resistance from HMRC in some instances, but that progress improved once the legal argument was framed more directly around the statutory document requirements.

In anonymised form, his reasoning was:

Where the property was bought at auction, the buyer is usually issued with a memorandum of sale and the associated auction conditions. Under section 2 of the Law of Property (Miscellaneous Provisions) Act 1989, a contract for the sale of an interest in land must be in writing, incorporate the agreed terms, and be signed by or on behalf of each party. The memorandum of sale and conditions can satisfy that requirement.

For an SDLT amendment that would generate a repayment, Schedule 10 to the Finance Act 2003 requires the purchaser to provide the contract for the land transaction and the instrument, if any, by which the transaction was effected. On that basis, the memorandum of sale and associated conditions can be submitted as the relevant contract documents.

Nick also noted an important territorial point: SDLT applies in England and Northern Ireland. Purchases in Scotland are generally dealt with under Land and Buildings Transaction Tax rather than SDLT, so the legal route is different.

The Law

The key legal provisions are these.

Law of Property (Miscellaneous Provisions) Act 1989, section 2 sets formal requirements for contracts for the sale or other disposition of an interest in land. In broad terms, the contract must:

• be in writing;
• contain all the expressly agreed terms in one document, or in exchanged documents;
• incorporate terms either directly or by reference; and
• be signed by or on behalf of each party.

Finance Act 2003, Schedule 10, paragraph 6 deals with amendment of an SDLT return by the purchaser. Where the amendment would entitle the purchaser to a repayment of tax, the notice must be accompanied by:

• the contract for the land transaction; and
• the instrument, if any, by which that transaction was effected.

In practice, HMRC may want to see the legal documents that created and completed the transaction. In an auction context, that often means the signed memorandum of sale, the auction conditions, and the transfer or conveyance if there is one.

If the reclaim argument depends on the property not being residential because it was not suitable for use as a dwelling, the substantive SDLT rules come from the residential property provisions in Finance Act 2003. HMRC and the courts have treated suitability for use as a dwelling as a fact-sensitive question. The current approach is stricter than many earlier claimants assumed, and the threshold is now relatively high following Amarjeet and Tajinder Mudan v The Commissioners for HMRC [2025] EWCA Civ 799.

Analysis

The first step is to separate two different issues that are sometimes confused.

1. Is there enough documentation to support an SDLT amendment and repayment claim?
2. Does the underlying reclaim argument actually succeed on the facts?

The auction document point mainly answers the first question.

In an ordinary conveyancing transaction, the contract is usually easy to identify. In an auction sale, however, the binding contract is commonly formed when the hammer falls, with the memorandum of sale signed and read together with the auction conditions. That documentation can amount to the contract for the land transaction if it satisfies section 2 of the 1989 Act.

That is why the memorandum of sale matters. It is not just an administrative note. If it contains or incorporates the agreed terms and is properly signed, it can be the relevant contract document for the purposes of Schedule 10 to the Finance Act 2003.

The second step is to consider whether there is also an instrument by which the transaction was effected. In many cases that will be the transfer deed. If there is such a document, it should normally be provided as well.

The third step is to consider the actual reclaim basis. The fact that the property was bought at auction does not itself create an SDLT refund. Auction status only affects how the contract was formed and evidenced.

If the reclaim is based on the property being uninhabitable or not suitable for use as a dwelling, the buyer still has to prove that point. A property being run-down, requiring refurbishment, or described by an estate agent as derelict will not necessarily be enough. Following Amarjeet and Tajinder Mudan v The Commissioners for HMRC [2025] EWCA Civ 799, the condition thresholds are now relatively high. The question is not whether the property was unattractive, inconvenient, or in poor repair. The question is whether, at the effective date of the transaction, it was truly not suitable for use as a dwelling under the legal test.

The fourth step is to check the tax jurisdiction. SDLT applies to land transactions in England and Northern Ireland. If the property is in Scotland, the relevant tax is LBTT and the SDLT reclaim framework does not apply. The legal concepts may overlap in places, but the legislation, procedure and tax authority are different.

Outcome

The practical conclusion is that, for an auction purchase in England or Northern Ireland, a buyer amending an SDLT return can in principle rely on the memorandum of sale and the auction conditions as the contract documents required by Finance Act 2003, Schedule 10, paragraph 6, provided they satisfy section 2 of the Law of Property (Miscellaneous Provisions) Act 1989.

However, that only deals with the documentary requirement. It does not prove that the refund claim itself is valid. If the reclaim depends on saying the property was not suitable for use as a dwelling, the buyer must still meet a demanding factual and legal threshold, which is now relatively high after Amarjeet and Tajinder Mudan v The Commissioners for HMRC [2025] EWCA Civ 799.

If the property is in Scotland, the case is not an SDLT case and must be considered under LBTT instead.

Practical Steps

If you are assessing a similar case, the sensible next steps are:

• identify the location of the property first, because SDLT only applies in England and Northern Ireland;
• obtain the full auction legal pack, including the memorandum of sale and all auction conditions;
• check whether the memorandum and conditions satisfy section 2 of the Law of Property (Miscellaneous Provisions) Act 1989;
• obtain the transfer deed or other instrument that completed the transaction, if there is one;
• review the original SDLT return and the exact basis on which an amendment is proposed;
• if the argument is that the property was not suitable for use as a dwelling, gather strong contemporaneous evidence from the effective date, such as survey reports, photographs, contractor reports and utility or safety evidence;
• test that evidence against the stricter approach confirmed in Amarjeet and Tajinder Mudan v The Commissioners for HMRC [2025] EWCA Civ 799>;
• make sure the amendment is made within the applicable time limit.

Conclusion

Yes, an auction memorandum of sale can be an important part of the contract evidence for an SDLT amendment and repayment claim. But it is only one part of the picture. The success of the claim still depends on the underlying SDLT analysis, and where the argument is based on a property being uninhabitable, the legal threshold is now relatively high.

Legal References Used

• Law of Property (Miscellaneous Provisions) Act 1989, section 2
• Finance Act 2003, Schedule 10, paragraph 6
• 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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