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Rebate On Overpaid SDLT ‘Welcome But Frustrating’

Real Estate Tax Expert Comments On HMRC Decision


By Rob Dixon

HM Revenue & Customs has confirmed that overpaid stamp duty land tax (SDLT) on leases which could have been VAT exclusive can be reclaimed subject to the usual criteria and exclusions for making such claims, and as long as the claim is made within four years of the original transaction.

This confirmation has come several months after the Revenue accepted that the grant of a lease could in certain circumstances be a transfer of a going concern (TOGC) for VAT purposes and that adjustments could be made to the VAT paid in those transactions where it had been overpaid and not recovered. A TOGC is outside the scope of VAT.

Alex Barnes, a Partner in Irwin Mitchell’s who specialises in advising on real estate tax issues, said that many commentators remained confused as to why this latest decision was not made much earlier.

He explained: “Despite the announcement on VAT coming at the end of last year, the Revenue has dragged its heels on announcing the SDLT position on overpaid VAT when surely it was never in doubt that the Revenue would have to accept it could be reclaimed.”
“The delay in the announcement will be very frustrating for those claimants who could have made a claim had the SDLT position been clarified in the original announcement but who are now time barred from making such a claim.”

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