Recently released figures have indicated the difficulties which stamp duty land tax (SDLT) has caused for both clients and legal professionals.
Whilst the data from the HMRC indicated that the tax had increased revenue, it also indicated that problems had emerged as a result; the Law Society is now calling for your feedback on this.
60,000 higher rate transactions occurred during the first half of 2017, resulting in SDLT receipts totalling £1.8 billion. Although the additional tax will apply to second property purchases, consumers may also fall into the higher rate band if they are unable to sell their former home before buying another one. These people can reclaim the higher rate of tax paid, on the condition that they sell their home within three years of purchasing a new one.
In 2016/17, the HMRC statistics indicate that additional property refunds totalled £80 million, with a further sum of £47 million being paid out in the three months to June of this year. Suggestions have estimated that a quarter of residential properties subject to the tax will be liable to pay the higher rate amount of 3%.
The Law Society highlighted that problems have been experienced following the introduction of the higher rate in April 2016. It stated that the feedback received indicated difficulties with interpreting the guidance provided by HMRC.
The Law Society highlight that the existing process of refunding the higher rate may be an issue for residential conveyancers, especially if companies continue to tell clients this.
The Law Society is inviting feedback on the experience of higher rate SDLT until 29 August 2017.
