Our client purchased a property inside the SDLT Holiday, which contained a house, annex and a shop.
Our client paid £7,500 in stamp duty land tax and became aware that he may have overpaid, so he sought SDLT advice from Cap Ex Associates Tax Ltd.
Our advisers identified that there were potential savings up to an estimated £4,900 and proceeded to guide the client through the process of accessing these savings. By working as his Stamp Duty Land Tax agents, our advisers confirmed that overpayment had occurred as specialist advice was not sought upon acquisition. With the client’s permission, a refund request to HMRC was submitted on his behalf and payment was received four weeks after submission to HMRC.
Prior to any relief being applied, the transaction would have been charged to the mixed use rates, putting the SDLT liability at £7,500. First, we needed to calculate the Non-Residential element for our client’s Mixed Use Multiple Dwelling Relief. As the inherited site was split between commercial value (the shop) and residential value, the total consideration was identified as £360,000. Calculating the Non-Residential SDLT with this in mind put the total to £2,083.33.
Secondly, the Residential SDLT needed to be calculated, as this was the remaining balance to be apportioned to the dwellings. As Multiple Dwelling Relief applied, the dwelling value then needed to be calculated. As completion was in May 2021, the properties were of benefit to the Stamp Duty Holiday. The property’s Residential Stamp Duty Land Tax total came to £2,600.
This put our client’s total Stamp Duty Land Tax due at £4,683.33, meaning that he was eligible to apply for a tax relief refund of £2,816.67.