What is Stamp Duty Land Tax?

Often referred to as Stamp Duty, or SDLT, Stamp Duty Land Tax is a self-assessed tax paid by buyers of property in the UK. The amount paid is based on the value of the property, as well as other, less well known factors. Introduced in 2003 as a replacement for the old Stamp Duty, it has been one of the UK’s most adjusted and amended pieces of tax legislation ever since.

Why would I have paid the wrong amount of SDLT?

The complexity of SDLT legislation, along with its propensity for change, have combined to ensure that SDLT is now one of the least understood taxes. In particular, by those associated with calculating what is due, and those buyers directly affected by overpaying. Most buyers rely heavily on their solicitors to correctly complete the SDLT return on behalf of their clients.

Add to this the fact that the SDLT calculators provided on HMRC’s websites, are not tailored to take into account all of the variables that can affect the amount due on a transaction, and there is plenty of margin for errors. In a 2018 statement to a national newspaper reporting on SDLT, HMRC clarified that the calculators are intended merely as ‘a guide’.

All this means that mistakes are common – we believe that as many as one in five SDLT returns are incorrectly completed, leading to millions of pounds in overpaid SDLT to HMRC every year. This can be because of missed reliefs based on the circumstances of the buyer, misclassification of the property being bought, or any one of the more than thirty exemptions set out in the legislation, but which are often missed by the solicitor completing the SDLT return.