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HMRC to update “confusing” guidance surrounding stamp duty surcharge

HM Revenue & Customs will update its “confusing” guidance on the higher rate of Stamp Duty Land Tax, according to new reports.

The Stamp Duty surcharge, introduced in April 2017, places an additional three per cent charge on top of properties which aren’t your main residence.

But according to new figures, there have been more than 15,700 cases of individuals wrongly paying the charge who were eligible for a refund.

In many cases the guidelines are unclear on exactly what circumstances individuals should be paying the surcharge.

The rules can become particularly complicated when concerning a divorce or buy-to-let property.

Generally, the guidelines suggest that if at the end of the day of a transaction you own two or more properties, the surcharge should be charged. However, there have been multiple instances where homeowners have overturned the decision and been refunded.

Member of the Law Society’s conveyancing and land law committee, Sarah Dwight, said: “It is a very complex area and the guidance does not give conveyancing lawyers much clarity.

“HMRC seems to have thought the guidance it issued was going to be sufficient, but there are so many different types of scenarios that arise when people are seeking to buy and sell a property, that not everyone fitted into HMRC’s boxes.”

An HMRC spokesperson told the FTAdviser: “We keep all guidance under constant review, including taking legal developments into account. HMRC is working to update its guidance on the higher rates of stamp duty land tax.”

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