SDLT higher rates on additional dwellings – exceptional circumstances


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When a person buys a dwelling, they pay a higher rate of Stamp Duty Land Tax where the property is not the only dwelling that they own.

This is known as the Higher Rates for Additional Dwellings (HRAD). A payment of HRAD will be refunded where the new property replaces the person’s main home and the previous main home is sold within three years of buying the new home.
For most people, three years is and remains enough time to sell a previous main dwelling. However, the government recognises that there will sometimes be exceptional circumstances not in the control of the buyer or seller which mean that the previous dwelling cannot be sold within three years. As an example, the Ministry of Housing, Communities and Local Government issued guidance in response to the Covid-19 pandemic, advising against the marketing of properties in most cases from 26 March to 13 May 2020. This meant that some people could not sell their properties during this time. In addition, some sellers have found that prospective buyers have had to pull out of transactions directly as a result of Covid-19. Other individuals have been unable to undertake house sales because they need to self-isolate.
The Government does not want people to face an additional tax charge as a result of exceptional circumstances outside of their control, such as the government’s recent instructions relating to the housing market. As a result, the government has announced its intention to change the HRAD legislation. This will mean that people can receive a refund where they sell their previous main residence outside the three year period because exceptional circumstances made it impossible to sell the property within three years. The Covid-19 pandemic is an exceptional circumstance, and other examples might include action taken by a public authority preventing the sale of the property.
The person must sell their previous main residence as soon as possible after the exceptional circumstances no longer apply in order to qualify for the refund. The legislation will apply where the three year period ended on or after 1 January 2020 and the previous main residence is sold after the three years.
The HRAD pages on GOV.UK and the SDLT manual have been updated to reflect this change. The guidance sets out that customers who sold their previous main residence on or after 1 January 2020 and outside the three year period due to reasons outside their control should write to HMRC with an explanation of why they were unable to sell their previous main residence within the three year period and the following information: 
  • the name, address and daytime telephone number of the person making the request (either the main buyer of the property which attracted the higher rate of SDLT or their agent)
  • the main buyer’s name and address, if they are not the person making the request
  • details of the property that attracted the higher rates of SDLT, including the effective date of purchase and the SDLT unique transaction reference number
  • details of the previous main residence that has been sold, including the effective date of sale, the address of the property and the name of the buyer
  • the amount of tax paid on the property that attracted the higher rates of SDLT
  • the amount of the requested repayment of tax
  • the bank account and sort code details of the person to receive the payment
If the repayment is to go to an agent rather than the purchaser HMRC will need a signed purchaser authority. If an agent is making the request HMRC also needs a signed letter of consent from the lead purchaser.
The request should be sent to:
BT Stamp Duty Land Tax, HM Revenue and Customs, BX9 1HD
HMRC will consider each customer’s amended return on a case-by-case basis.
This applies to homes sold in England and Northern Ireland. Wales and Scotland have their own land and property transaction taxes.
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