Almost every buyer lets their solicitor deal with stamp duty and never thinks about it again. That is usually fine. The bit worth knowing is that the return is legally yours, not theirs, and so is the penalty if it goes in late and the refund if you have paid too much.
Refunds are the reason this matters. Three of the most common stamp duty overpayments only come to light months after completion, by which point the file is closed and nobody is watching the clock but you. Here is the process, the deadlines, and what to do when the figure turns out to be wrong.
What the return is and when it is due
An SDLT return is the form that tells HMRC about a land transaction in England or Northern Ireland and self-assesses the tax on it. It has to be filed, and the tax paid, within 14 days of the effective date of the transaction.
The effective date is normally completion. It can be earlier if the contract is substantially performed first, which usually means you have taken possession or paid most of the price before completion. Long delayed completions and some off-plan purchases can trigger this without anybody intending to, so if you are moving in before completion, tell your conveyancer.
Fourteen days is short. It was 30 days until March 2019. If you are handling a transaction without a solicitor, which is rare but legal, that fortnight goes very quickly.
When no return is needed
Not every transaction is notifiable. You generally do not need to file where:
- The consideration for a freehold or an assigned lease is under £40,000
- Property is transferred to you in a will or under intestacy, with no consideration
- Property is transferred between spouses or civil partners on divorce, dissolution or separation
- It is a genuine gift with no chargeable consideration, and no mortgage debt is being taken on
That last one has a trap in it. If you are given a property and you take on the mortgage, the outstanding debt counts as consideration, and stamp duty can be due on it even though no money changed hands.
Penalties for a late return
| How late | Penalty |
|---|---|
| Up to 3 months after the filing date | £100 |
| More than 3 months after the filing date | £200 |
| More than 12 months after the filing date | A tax-based penalty on top of the fixed penalty, which can be up to the full amount of tax due on the return |
Interest runs separately on late paid tax, from the day after it should have been paid until the day it is paid, at the official rate set by HM Treasury. Interest is not a penalty and there is no right of appeal against it, so the only way to reduce it is to pay sooner.
Amending a Return
You have 12 months from the filing date to amend an SDLT return. Since the filing date is 14 days after the effective date, that is effectively a year and a fortnight from completion.
To amend you need the Unique Transaction Reference Number from the SDLT5 certificate, along with details of what is changing. Where there is more than one buyer, or a buyer is being added or removed, HMRC wants written confirmation and signatures from everyone named.
If the mistake is older than the amendment window and you have paid too much, there is still a route to a refund, but it is a separate claim rather than an amendment and the evidence bar is higher. Do not assume a year is a hard cut-off, and do not assume it is easy either.
The three refunds worth knowing about
1. The additional dwellings surcharge, after you sell your old home
If you bought a new main residence before selling the old one, you will have paid the 5% surcharge on completion. Sell the previous main residence within three years of the new purchase and you can claim the whole surcharge back.
The deadline is the one people miss. For a previous home sold on or after 29 October 2018, the claim must be made within 12 months of whichever is later: the date you sold the old home, or the filing date of the SDLT return on the new one. Since the filing date is only two weeks after completion, in most chain-break cases the clock runs from the sale of the old property.
2. The 2% non-resident surcharge
If you were non-UK resident on the day you bought but you subsequently spend at least 183 days in the UK within a qualifying 365-day period around the purchase, you can amend the return and reclaim the 2%. That claim runs on its own clock: two years from the effective date of the transaction.
3. First-time buyer relief that was never claimed
It happens, usually where the buyer did not realise they qualified or the relief was not flagged at the time. If you were entitled to first-time buyer relief and the return did not claim it, an amendment within the 12-month window recovers up to £5,000.
How to make a claim
Refund claims go to HMRC directly. Whichever route you use, you will need:
- The Unique Transaction Reference Number from the SDLT5
- The address of the property and the effective date of the transaction
- The date the previous main residence was sold, where that is the basis of the claim
- The amount of tax originally paid and the amount you are reclaiming
- Bank details for the repayment, and confirmation from all the buyers named on the return
If your original conveyancer is still instructed, they are usually the quickest route because they hold the file and the reference numbers. Most will do it for a modest fee, and some do it as part of the original retainer. Ask before you pay anyone else.
A word on unsolicited refund offers
Stamp duty reclaim agents cold-call buyers after completion, usually offering a no-win, no-fee claim on the theory that the purchase was really mixed use, or that an annexe made it two dwellings. Some of these claims are sound. A good many are not.
Two things to weigh. The return is in your name, so if HMRC opens a check and the claim fails, you repay the tax with interest and possibly a penalty, and the agent's fee is rarely refunded. And if you have a genuine refund of the kind described above, you do not need an agent at all: it is a form, a reference number and a bank account.
Where the position is genuinely arguable, take it to a solicitor or a chartered tax adviser who will put their name to the advice and is regulated if it goes wrong.
Keep the SDLT5
The SDLT5 certificate is the proof the return was filed, and it carries the reference number every later claim depends on. It arrives in the completion pack and is then usually never looked at again. Scan it, put it somewhere you will find it in three years, and note the completion date alongside it.
Before completion, check the figure. Run the price through our stamp duty calculator, compare it with the number on your completion statement, and query anything that does not match. Catching an error in the week before completion is a phone call. Catching it eighteen months later is a claim.