Stamp duty refund info for HMRC after solicitor error
Discussion
We recently sold a 2nd house that we bought in 2013. We used an accountant to handle the CGT and they found that our solicitor has calculated the stamp duty wrongly so we are due a refund.
The mistake may have been because the property was covered by the "Disadvantaged Areas" legislation which was in force when the offer was made, but was abolished in April 2013 which was before the exchange and completion.
According to our accountant the rate which would have been applicable would then have been the standard rate of £270 on the £27,000 excess over the Nil threshold of £125,000. However we paid £1520 which is 1% of the purchase price of £152,000.
So in order to claim a refund HMRC need the following info
- the UTRN - I assume this is my UTRN from the gov gateway?
- copy of the original SDLT return - would the solicitor have this?
- reason why you think you’ve overpaid - I can explain this
- contract for the land transaction (if appropriate) - Is this the Land Registry doc?
- instrument (if any) by which the transaction was effected, this is generally the relevant transfer document, the lease or similar document - dunno what this is or if relevant
The mistake may have been because the property was covered by the "Disadvantaged Areas" legislation which was in force when the offer was made, but was abolished in April 2013 which was before the exchange and completion.
According to our accountant the rate which would have been applicable would then have been the standard rate of £270 on the £27,000 excess over the Nil threshold of £125,000. However we paid £1520 which is 1% of the purchase price of £152,000.
So in order to claim a refund HMRC need the following info
- the UTRN - I assume this is my UTRN from the gov gateway?
- copy of the original SDLT return - would the solicitor have this?
- reason why you think you’ve overpaid - I can explain this
- contract for the land transaction (if appropriate) - Is this the Land Registry doc?
- instrument (if any) by which the transaction was effected, this is generally the relevant transfer document, the lease or similar document - dunno what this is or if relevant
AndyTR said:
When was the stamp duty paid? You can usually only make a claim for an overpayment within 12 months of the purchase, extended to 3 years in some circumstances. If the stamp duty overpayment was in 2013 you're likely to have any claim rejected.
I think you can - screenshot from HMRC site heregmaz said:
AndyTR said:
When was the stamp duty paid? You can usually only make a claim for an overpayment within 12 months of the purchase, extended to 3 years in some circumstances. If the stamp duty overpayment was in 2013 you're likely to have any claim rejected.
I think you can - screenshot from HMRC site here
On your specific points:
- the UTRN: this is the UTRN specific to that SDLT return. It would be on the SDLT5 certificate.
- copy of the original SDLT return: the solicitor should have this; really they should have sent it to you at the time. They may have archived or destroyed the file after this length of time.
- reason why you think you’ve overpaid: this is interesting; if you completed the purchase in 2013 then the rate of SDLT which applied to a £152,000 purchase would be 1% on the total price which is what you paid: https://www.gov.uk/government/publications/rates-a... - why does the accountant think this is wrong?
- contract for the land transaction (if appropriate): this would be the contract, not the Land Registry TR1. You'd need to have this from the solicitor.
- instrument (if any) by which the transaction was effected, this is generally the relevant transfer document, the lease or similar document: this is the Land Registry TR1; you could potentially obtain a copy from the Land Registry.
The major point is whether it was calculated incorrectly. You refer to disadvantaged areas; that was a relief that ended on 6 April 2013 and applied to sales up to £150,000 so wouldn't ever have been relevant to your purchase. On the face of it, the SDLT calculation looks right to me. Back then, SDLT was charged on the whole price and the rate depended on which band the price fell in; your accountant may be confused because SDLT since December 2014 has been charged in tiers: https://www.gov.uk/government/publications/rates-a...
I'd query this further with the accountant - maybe referring him to these links - rather than spending your time on this.
- the UTRN: this is the UTRN specific to that SDLT return. It would be on the SDLT5 certificate.
- copy of the original SDLT return: the solicitor should have this; really they should have sent it to you at the time. They may have archived or destroyed the file after this length of time.
- reason why you think you’ve overpaid: this is interesting; if you completed the purchase in 2013 then the rate of SDLT which applied to a £152,000 purchase would be 1% on the total price which is what you paid: https://www.gov.uk/government/publications/rates-a... - why does the accountant think this is wrong?
- contract for the land transaction (if appropriate): this would be the contract, not the Land Registry TR1. You'd need to have this from the solicitor.
- instrument (if any) by which the transaction was effected, this is generally the relevant transfer document, the lease or similar document: this is the Land Registry TR1; you could potentially obtain a copy from the Land Registry.
The major point is whether it was calculated incorrectly. You refer to disadvantaged areas; that was a relief that ended on 6 April 2013 and applied to sales up to £150,000 so wouldn't ever have been relevant to your purchase. On the face of it, the SDLT calculation looks right to me. Back then, SDLT was charged on the whole price and the rate depended on which band the price fell in; your accountant may be confused because SDLT since December 2014 has been charged in tiers: https://www.gov.uk/government/publications/rates-a...
I'd query this further with the accountant - maybe referring him to these links - rather than spending your time on this.
Jobbo said:
On your specific points:
- the UTRN: this is the UTRN specific to that SDLT return. It would be on the SDLT5 certificate.
- copy of the original SDLT return: the solicitor should have this; really they should have sent it to you at the time. They may have archived or destroyed the file after this length of time.
- reason why you think you’ve overpaid: this is interesting; if you completed the purchase in 2013 then the rate of SDLT which applied to a £152,000 purchase would be 1% on the total price which is what you paid: https://www.gov.uk/government/publications/rates-a... - why does the accountant think this is wrong?
- contract for the land transaction (if appropriate): this would be the contract, not the Land Registry TR1. You'd need to have this from the solicitor.
- instrument (if any) by which the transaction was effected, this is generally the relevant transfer document, the lease or similar document: this is the Land Registry TR1; you could potentially obtain a copy from the Land Registry.
The major point is whether it was calculated incorrectly. You refer to disadvantaged areas; that was a relief that ended on 6 April 2013 and applied to sales up to £150,000 so wouldn't ever have been relevant to your purchase. On the face of it, the SDLT calculation looks right to me. Back then, SDLT was charged on the whole price and the rate depended on which band the price fell in; your accountant may be confused because SDLT since December 2014 has been charged in tiers: https://www.gov.uk/government/publications/rates-a...
I'd query this further with the accountant - maybe referring him to these links - rather than spending your time on this.
Hi, thanks for this and yes, it looks like the accountant made the error, not the solicitor.- the UTRN: this is the UTRN specific to that SDLT return. It would be on the SDLT5 certificate.
- copy of the original SDLT return: the solicitor should have this; really they should have sent it to you at the time. They may have archived or destroyed the file after this length of time.
- reason why you think you’ve overpaid: this is interesting; if you completed the purchase in 2013 then the rate of SDLT which applied to a £152,000 purchase would be 1% on the total price which is what you paid: https://www.gov.uk/government/publications/rates-a... - why does the accountant think this is wrong?
- contract for the land transaction (if appropriate): this would be the contract, not the Land Registry TR1. You'd need to have this from the solicitor.
- instrument (if any) by which the transaction was effected, this is generally the relevant transfer document, the lease or similar document: this is the Land Registry TR1; you could potentially obtain a copy from the Land Registry.
The major point is whether it was calculated incorrectly. You refer to disadvantaged areas; that was a relief that ended on 6 April 2013 and applied to sales up to £150,000 so wouldn't ever have been relevant to your purchase. On the face of it, the SDLT calculation looks right to me. Back then, SDLT was charged on the whole price and the rate depended on which band the price fell in; your accountant may be confused because SDLT since December 2014 has been charged in tiers: https://www.gov.uk/government/publications/rates-a...
I'd query this further with the accountant - maybe referring him to these links - rather than spending your time on this.
Well this is interesting, the accountant has doubled down on her own calculation and is claiming the HMRC website is wrong and that thousands of people may have paid the wrong amount back in 2013/2014.
I just hope I don't get the invoice for the solicitor and accountant fighting it out at a rate of £150 per hour + vat
gmaz said:
So in order to claim a refund HMRC need the following info
- the UTRN - I assume this is my UTRN from the gov gateway?
- copy of the original SDLT return - would the solicitor have this?
- reason why you think you’ve overpaid - I can explain this
- contract for the land transaction (if appropriate) - Is this the Land Registry doc?
- instrument (if any) by which the transaction was effected, this is generally the relevant transfer document, the lease or similar document - dunno what this is or if relevant
If it is the solicitor’s error, make it their problem and let them sort it out or make you whole themselves. - the UTRN - I assume this is my UTRN from the gov gateway?
- copy of the original SDLT return - would the solicitor have this?
- reason why you think you’ve overpaid - I can explain this
- contract for the land transaction (if appropriate) - Is this the Land Registry doc?
- instrument (if any) by which the transaction was effected, this is generally the relevant transfer document, the lease or similar document - dunno what this is or if relevant
gmaz said:
Well this is interesting, the accountant has doubled down on her own calculation and is claiming the HMRC website is wrong and that thousands of people may have paid the wrong amount back in 2013/2014.
I just hope I don't get the invoice for the solicitor and accountant fighting it out at a rate of £150 per hour + vat
If the accountant is doubling down on the it because you were entitled to disadvantaged areas relief then she is wrong for more than one reason. I just hope I don't get the invoice for the solicitor and accountant fighting it out at a rate of £150 per hour + vat
As has been mentioned there was a £150k max price for that to be relevant.
https://assets.publishing.service.gov.uk/media/5a7...
But also you exchanged post 6 April 2013 so the relief had been abolished.
And then she is wrong as SDLT operated (again as mentioned above) by applying the rate to the entire consideration.
In 2013 the SDLT on a £152,000 purchase was 1% so £1,520.
markh1973 said:
If the accountant is doubling down on the it because you were entitled to disadvantaged areas relief then she is wrong for more than one reason.
As has been mentioned there was a £150k max price for that to be relevant.
https://assets.publishing.service.gov.uk/media/5a7...
But also you exchanged post 6 April 2013 so the relief had been abolished.
And then she is wrong as SDLT operated (again as mentioned above) by applying the rate to the entire consideration.
In 2013 the SDLT on a £152,000 purchase was 1% so £1,520.
Yeah, The "disadvantaged areas" legislation became irrelevant as it was abolished between the date we made an offer on the property, and the completion date. Even though we tried hard to negotiate the asking price to below £150,000 to get a zero rate, the change on 6th April 2013 would have annulled that rate and put us back on the standard rates.As has been mentioned there was a £150k max price for that to be relevant.
https://assets.publishing.service.gov.uk/media/5a7...
But also you exchanged post 6 April 2013 so the relief had been abolished.
And then she is wrong as SDLT operated (again as mentioned above) by applying the rate to the entire consideration.
In 2013 the SDLT on a £152,000 purchase was 1% so £1,520.
Unless there is more to it than you’ve posted, I think the accountant is wrong. The rules for calculating SDLT on a straightforward single freehold house purchase are pretty simple - it’s really on things like multiple dwellings or houses with land where there have been historic challenges from the fly-by-night ‘tax reclaim’ mob.
What’s interesting is that accountants always avoid doing SDLT returns - I had to suggest to a client that he get his accountant to do an SDLT return recently for a lease to his company when I was acting for his pension scheme. He couldn’t find anyone to do it. So your accountant getting involved in one from years ago is most unusual.
What’s interesting is that accountants always avoid doing SDLT returns - I had to suggest to a client that he get his accountant to do an SDLT return recently for a lease to his company when I was acting for his pension scheme. He couldn’t find anyone to do it. So your accountant getting involved in one from years ago is most unusual.
Once you’ve established whether you believe the Solicitor or accountant was at fault, a way to fast-track things may be to initiate (or at least intimate) a claim against their Professional Indemnity Insurance.
You have a perfectly legitimate reason to do this as you’ve suffered a financial loss due to their error - it’s exactly the reason they buy cover.
You have a perfectly legitimate reason to do this as you’ve suffered a financial loss due to their error - it’s exactly the reason they buy cover.
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