Excerpt from; Stamp Duty Land Tax Guide For Property Investors.

How to Make a Reclaim

(Overview: Process of Reclaiming SDLT)

Section Summary: Making a Stamp Duty Land Tax (SDLT) reclaim requires presenting a well-documented case to HMRC, explaining why the reclaim is justified and adhering to specific deadlines.

Key Points

  1. Identify the reason for overpayment, such as misclassification or incorrect calculation.
  2. Collect all relevant documents like SDLT returns and property deeds.
  3. Understand the deadline for claims, generally 12 months for amendments, or up to four years for reclaims.
  4. Prepare and submit the necessary documentation and a clear argument for the reclaim using the correct forms.

Main Principles The process emphasises thorough documentation, adherence to legal deadlines, and clear communication with HMRC to successfully reclaim overpaid SDLT.

Making a Stamp Duty Land Tax (SDLT) reclaim involves a detailed process where you need to present a solid case to HM Revenue and Customs (HMRC), backed by appropriate documentation and a clear argument for why the reclaim is justified. 

Step 1: Review Your SDLT Payment

  • Understand the Basis of Your Claim: Determine the reason for your SDLT overpayment. Common reasons include misclassification of the property (residential vs. non-residential), incorrect calculation, or newly discovered relief eligibility.
  • Gather Relevant Documents: Original SDLT return, conveyance deed, property valuation documents, and any other relevant correspondence or contracts.

Step 2: Check the Deadline for Making a Claim

  • Familiarise yourself with the time limits for making a claim. Typically, you have 12 months from the filing date of the return to amend it for any mistakes. However, for overpayment reclaims outside of this window, Section 34 of the Finance Act allows up to four years from the effective date of the transaction.

Step 3: Prepare Your Documentation and Arguments

  • Documentation: Include all pertinent documentation that supports your claim. This may involve:
    • Proof of Payment: Bank statements or receipts showing the SDLT payment.
    • Evidence Supporting the Claim: For example, if claiming a relief, provide the necessary evidence that the property or transaction qualifies for that relief.
  • Arguments: Prepare a clear and concise argument outlining why the SDLT was overpaid. This should reference specific legislation, guidelines, or recent case law that supports your position.

Step 4: Complete the Correct Claim Form

  • Depending on the nature of your claim, you may need to amend your original SDLT return or complete a specific claim form. Ensure you are using the correct form for your particular situation.

Step 5: Submit Your Claim

  • How to Submit: Claims can often be submitted online through the HMRC website or sent via post. Check the latest guidance on the HMRC website for where and how to submit your claim.
  • Include a Cover Letter: Accompany your claim with a cover letter that summarises your case, highlighting the key points and documents included.

Step 6: Follow Up

  • Track Your Claim: Keep a record of your submission and any correspondence. If possible, send your claim via recorded delivery or use online tracking.
  • Be Prepared to Provide Further Information: HMRC may request additional details or clarification. Respond promptly and thoroughly to any inquiries.

Step 7: Appeal if Necessary

  • If your claim is denied and you believe the decision is unjust, you have the right to appeal. Review the reasons for the refusal carefully and consider whether additional evidence or arguments could support your appeal.

Key Considerations

  • Professional Advice: Given the complexity of SDLT legislation, consider seeking advice from a tax professional or solicitor who specialises in property taxation.
  • Accuracy and Honesty: Ensure all information provided in your claim is accurate and truthful. Making a fraudulent claim can lead to penalties.

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This Article Written By Nick Garner
Founder Stamp Duty Advice Bureau
Author of Stamp Duty Land Tax Guide
For Property Investors.