HM Revenue & Customs has returned a total of £30mn in reclaimed stamp duty fees, Cornerstone Tax has revealed.
Cornerstone said HMRC has returned £30mn to its clients from overpaid stamp duty land tax over the past three years.
This comes as research from Cornerstone revealed that 61 per cent of homeowners have never considered the possibility of errors in the stamp duty they paid.
Stamp duty land tax (SDLT) is charged when purchasing a property and/or second properties.
In England and Northern Ireland, you’ll need to pay SDLT if the price of that property reaches a certain threshold.
No stamp duty is due on a property purchase of up to £250,000 or £425,000 for first-time buyers while 5 per cent of the property price is charged for prices on main residences between £250,001 and £925,000 and 8 per cent for additional properties between that price.
The top rate of the tax now stands at 12 per cent for a main residence and 17 per cent for foreign purchasers buying a second home in England or Northern Ireland.
While this tax is similar in Scotland and Wales, they have their own distinct rates.
Cornerstone has identified three commonly overlooked stamp duty reliefs, exemptions and misconceptions that could result in overpaying on stamp duty.
Multiple dwellings relief
Someone can claim relief when they buy more than one dwelling if a transaction, or a number of linked transactions, includes freehold or leasehold interests in more than one dwelling.
Cornerstone said it has helped clients save a total of £7,662,310 in overpaid stamp duty on multiple dwellings.
In England alone, there are currently 24.8mn households with registered multiple dwellings on their properties according to the English Housing Survey.
It said many homeowners may have overpaid on stamp duty due to errors in the dwellings' status, resulting in an average loss of £34,987 in potential savings.
Uninhabitable status
When purchasing abandoned or uninhabitable properties, buyers may be eligible to pay a lower rate of SDLT or qualify for a tax refund.
HMRC assesses SDLT based on the issues and damages of the property; however, for owners of uninhabitable homes, HMRC may dispute the property's status and deny an SDLT exemption.
As a result, it is important to get the matter assessed by a specialist to ensure the correct amount of SDLT is being paid from the outset.
Cornerstone has assisted 27 clients in saving a total of £907,432 in SDLT, averaging £33,608 per customer.
Pensions
A common practice of homeowners nearing retirement is to sell their homes. Many opt for a self-investment personal pension which allows them to invest the profits into their pension funds and pay stamp duty before the funds are deposited.
In the case of a transfer of a commercial property into a Sipp or Ssas pension, the likelihood is that all of the owners of the property will also be members of the pension scheme – hence, the total discount against the stamp duty amount which would normally be due on the transfer of the property would be 100 per cent.
