Homeowners could be entitled to stamp duty refunds worth thousands

Homeowners across the UK could be entitled to claim stamp duty refunds worth thousands of pounds from HMRC, Cornerstone Tax has revealed.

The stamp duty advisory practice suggested people could be eligible to claim a refund if they have unknowingly overpaid on Stamp Duty Land Tax (SDLT).

Cornerstone said that “commercial activity” on someone’s land turns their house into a “mixed use” property in regards to stamp duty, meaning they would only be liable for the lower non-residential rates.

This does not mean the seller has to have run a business from the property, but whether the house, or its land, generates a business income, Cornerstone stated.

The tax expert added that this comes in many forms, from having a commercial business operating on-site, to renting or licensing part of the buildings or land to someone else to use – known as property business income in HMRC terms.

Cornerstone suggested that no matter how little of the land is used, or how small the income is, if land is being used it is therefore “conclusive” that some homeowners shouldn’t be paying, or have paid too much via the residential rate.

The tax expert also highlighted wayleave agreements, which give rights to utility companies to install, place or run their equipment on the land that a property sits on, in order to provide power, water, or sewerage. In return for granting the right to use this land, the utility company would usually pay a fee, similar to a tenant paying rent to a landlord – which Cornerstone also noted would therefore qualify a property as a “commercial use”.

Another situation that the tax specialist suggested people could be allowed to pay the lower non-residential stamp duty rate is through properties with an annexe – with homeowners potentially eligible for Multiple Dwellings Relief.

“Since the start of the initial lockdown in March, we have been inundated with requests to look into whether people have overpaid on stamp duty,” commented Cornerstone founder, David Hannah.

“The effects of the pandemic have made people more aware of their personal finances, and many who previously wouldn't have bothered to look into whether they had overpaid, are now seeing this as an opportunity to get some extra cash quickly.

“It remains to be seen how many cases of overpayment have occurred, but at Cornerstone Tax, we are aware of several cases where the overpayments amount to several hundreds of thousands of pounds.”

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