SDLT Extension of the three year time limit within which to sell a previous home.

SDLT_Geek

Extension of the three year time limit within which to sell a previous home. HMRC have said today that an amendment is to be made during the course of the Finance Bill to allow for exceptional circumstances where people cannot sell their previous main home within three years of buying their new home.

There are people who bought a new home about three years ago and who were dependent on selling an old home in order to recover the 3% extra SDLT. The changes will say that in exceptional circumstances they will be entitled to apply to HMRC to get the extra 3% SDLT back when they sell their old home, even outside the usual three year time limit.

SDLT_Geek

A written statement has now been made in Parliament about this: 
https://www.parliament.uk/business/publications/written-questions-answers-statements/written-statement/Commons/2020-06-03/HCWS266/

Rural_Puppy

That is interesting. I wonder if there are likely to be any similar provisions made in Scotland? We already have a less generous 18 months sales window, so it could be argued that we are even more disadvantaged and a similar extension ought to be considered. Anyone have any thoughts on that?

davidmcn

Rural_Puppy said:

That is interesting. I wonder if there are likely to be any similar provisions made in Scotland?

There already have been:

https://www.revenue.scot/news/covid-19/ads-repayment-claims

Rural_Puppy

Darn. The dates don't seem to work in my case.
Bought new residence on 16th July 2018.
Sold previous residence on 8th April 2020. 
In between serious illness of my OH meant we had to return to live in previous property, before putting it back on the market.
If the same concession to the rule as England had been applied in Scotland, we might have been able to reclaim the ADS. Seems a bit unfair.
Do you think there is any chance of HMRC considering  a refund in this case? Or any idea how we could raise it as an issue with the powers that be?

[Deleted User]

Rural_Puppy said:

Darn. The dates don't seem to work in my case.
Bought new residence on 16th July 2018.
Sold previous residence on 8th April 2020. 
In between serious illness of my OH meant we had to return to live in previous property, before putting it back on the market.
If the same concession to the rule as England had been applied in Scotland, we might have been able to reclaim the ADS. Seems a bit unfair.
Do you think there is any chance of HMRC considering  a refund in this case? Or any idea how we could raise it as an issue with the powers that be?

LBTT is a devolved tax so you will have paid the money to Revenue Scotland not HMRC.  It has nothing to do with HMRC so HMRC are not going to consider a refund for money that that never paid to them.

You would need to get the Scottish Parliament to grant an extension so perhaps it is something to contact your MSP about.

SDLT_Geek

HMRC have added a page to their Manual on SDLT about the incoming exceptional circumstances rule. https://www.gov.uk/hmrc-internal-manuals/stamp-duty-land-tax-manual/sdltm09807

davidmcn

Rural_Puppy said:

Darn. The dates don't seem to work in my case.
Bought new residence on 16th July 2018.
Sold previous residence on 8th April 2020. 
In between serious illness of my OH meant we had to return to live in previous property, before putting it back on the market.
If the same concession to the rule as England had been applied in Scotland, we might have been able to reclaim the ADS. Seems a bit unfair.
Do you think there is any chance of HMRC considering  a refund in this case? Or any idea how we could raise it as an issue with the powers that be?

I suspect Revenue Scotland will consider that Parliament has already decided what the relevant period should be, and if you want Parliament to change that (again) then you lobby your MSPs.

There is provision elsewhere for Revenue Scotland to consider "extenuating circumstances" (which would include illness) but that's to do with the penalties which come in if you miss the time limits for submitting returns (or paying the bill) rather than the additional dwelling supplement being payable (or refundable).

But I suppose there's no harm in asking. To some extent they've been making up rules as they go along...

SDLT_Geek

I see that HMRC have also updated their Manual page https://www.gov.uk/hmrc-internal-manuals/stamp-duty-land-tax-manual/sdltm09800 giving guidance about the "replacement exception" to the 3% surcharge.  It now refers to the "exceptional circumstances" and provides a link to the guidance at SDLTM09807.

SDLT_Geek

I see that the guidance about how to reclaim the extra 3% once the "old home" has been sold has been updated too.  It is here: https://www.gov.uk/government/publications/stamp-duty-land-tax-apply-for-a-repayment-of-the-higher-rates-for-additional-properties

SDLT_Geek

There is a brief article here from Sean Randall about these points   https://www.bmmagazine.co.uk/opinion/government-must-further-revise-stamp-duty-in-the-current-circumstances/  He notes that the proposed extension of time is for those not able to sell their old home within three years of buying a new home.  However there is no such similar extension proposed for those who previously sold a previous home and have three years within which to buy another property if they are to escape the 3% surcharge.