Stamp Duty has become a subject of concern among experienced tax experts, who are raising awareness about potential instances of excessive payment due to errors made by HMRC (Her Majesty’s Revenue and Customs).
Cornerstone Tax, a renowned tax consultancy, has been successful in reclaiming a substantial £30 million on behalf of their clients from the Revenue within the past three years alone. This figure highlights the magnitude of the issue and suggests that there may be numerous other cases of overpayment that have gone unnoticed. Surprisingly, over 60% of buyers have never considered investigating potential errors, indicating a widespread lack of awareness regarding this matter.
Stamp Duty Regulations
Buyers must understand the applicable Stamp Duty regulations to avoid unnecessary financial burdens. Properties purchased below £250,000 (or £425,000 for first-time buyers) are exempt from Stamp Duty. However, for main residences priced between £250,001 and £925,000, a charge of 5% of the property’s value is imposed.
Additionally, an extra 8% is levied on purchases of additional properties.
Foreign buyers acquiring a second home in England or Northern Ireland face even higher rates, with Stamp Duty reaching 12% for main residences and 17% for such purchases. It’s worth noting that Wales and Scotland have their own purchase taxes, distinct from Stamp Duty.
Cornerstone Tax has identified three frequently overlooked aspects that can contribute to overpayment of Stamp Duty: reliefs, exemptions, and misconceptions. Understanding these elements can help individuals avoid unnecessary financial strain. Chairman David Hannah stresses the importance of conducting a thorough analysis, seeking professional advice, and familiarizing oneself with the relevant regulations.
By doing so, individuals can significantly minimize the risk of overpaying Stamp Duty Land Tax. In the unfortunate event of an overpayment, promptly initiating a review allows for rectification of the situation, accumulation of supporting evidence, and the pursuit of appropriate actions to claim a refund or make necessary adjustments to the tax amount paid.
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