Taxman to update guidance on ‘confusing’ Stamp Duty surcharge

HMRC is set to update its guidance on the higher rate of Stamp Duty, which has been branded so confusing that it has caught out solicitors and estate agents.

Since the Government’s additional 3% Stamp Duty was applied to second homes in 2017, there have been more than 15,700 individuals wrongly paying the charge who were eligible for a refund, according to HMRC figures.

Last month, EYE reported how even an experienced estate agent nearly fell foul of the rules.

David Poole, a partner at Michael Poole estate and letting agents in Teesside, bought a property with his wife Emma.

The couple were moving out of rented accommodation and it never crossed their minds that they would have to pay the surcharge. Poole had sold an earlier home over ten years previously.

However, they were told that because Emma owned two buy-to-let properties, they would have to pay an extra £14,160.

He and his wife ended up paying almost £28,000 in Stamp Duty but David Poole continued to believe they should not have paid the surcharge and was eventually proved right.

Now HMRC has indicated that it will update its guidance.

A spokesman for HMRC told FTAdviser: “[We keep] all guidance under constant review, including taking legal developments into account.

“HMRC is working to update its guidance on the higher rates of stamp duty land tax.”

The news comes after the Law Society criticised a “lack of clarity” in the guidance.

Sarah Dwight, a member of the Law Society’s conveyancing and land law committee, said: “It is a very complex area and the guidance does not give conveyancing lawyers much clarity.

“HMRC seems to have thought the guidance it issued was going to be sufficient, but there are so many different types of scenarios that arise when people are seeking to buy and sell a property, that not everyone fitted into HMRC’s boxes.”

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4 Comments

  1. Terrierdave99

    How can anyone who owns 2 BTL’s NOT have to the higher rate SDLT?

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  2. ArthurHouse02

    Because the argument is they were moving their own residence and that is where the problem lies. No one really seems to have a definitive answer that if you have buy to let properties and you sell your own home to buy another should you have to pay the surcharge or not. Morally you shouldnt and the HMRC website seems to suggest this, but it isnt clear and if you ring the revenue, different people give you different answers

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  3. brandonhoppe40

    Thank you for sharing such an informative post. I’m new in the real estate business. I work as a broker, but as I don’t have knowledge about tax, my father suggested me to opt for professional services. To help me he explored the Internet and asked me to view http://www.bsmaccounting.com/taxservices.php here. After reading your post I and understanding the seriousness of legal work, I would definitely look for professionals.

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  4. bitaccounting

    is this report from IRS? https://bitaccounting.com/

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