Divorcing and Stamp Duty

AskAsk

I have got the conditional order (formerly decree NSI) and we have a signed separation agreement in place for the Equity transfer of me buying out my ex-husband of the marital home.

Every where I have read on the internet, including the government website, no SDLT return is needed in our case but my solicitor insists that she needs to send a SDLT return to HMRC even though there is no stamp duty payable and she has put down code 34 as claim of relief for the return.

I looked this up and it states it is the relief code for pre-completion transactions.  I do not believe this is the correct code to claim relief and as far as I understand, "relief" and "exemption" mean completely different things.

I have raised concerns with her as such.  Anyone with knowledge can comment please?

Thanks

https://www.gov.uk/guidance/stamp-duty-land-tax-transactions-that-dont-need-a-return

SDLT_Geek

AskAsk said:

I have got the conditional order (formerly decree NSI) and we have a signed separation agreement in place for the Equity transfer of me buying out my ex-husband of the marital home.

Every where I have read on the internet, including the government website, no SDLT return is needed in our case but my solicitor insists that she needs to send a SDLT return to HMRC even though there is no stamp duty payable and she has put down code 34 as claim of relief for the return.

I looked this up and it states it is the relief code for pre-completion transactions.  I do not believe this is the correct code to claim relief and as far as I understand, "relief" and "exemption" mean completely different things.

I have raised concerns with her as such.  Anyone with knowledge can comment please?

Thanks

https://www.gov.uk/guidance/stamp-duty-land-tax-transactions-that-dont-need-a-return

Where the divorce exemption applies, there is no need for a land transaction return.  Usually the conveyancers will refer in the transfer to the reference number of the court proceedings and to the agreement under which the transfer is being made.  That way the Land Registry can see on the face of the transfer why no SDLT5 certificate is being sent.

There is some HMRC guidance on the exemption here: https://www.gov.uk/hmrc-internal-manuals/stamp-duty-land-tax-manual/sdltm00550

AskAsk

SDLT_Geek said:

AskAsk said:

I have got the conditional order (formerly decree NSI) and we have a signed separation agreement in place for the Equity transfer of me buying out my ex-husband of the marital home.

Every where I have read on the internet, including the government website, no SDLT return is needed in our case but my solicitor insists that she needs to send a SDLT return to HMRC even though there is no stamp duty payable and she has put down code 34 as claim of relief for the return.

I looked this up and it states it is the relief code for pre-completion transactions.  I do not believe this is the correct code to claim relief and as far as I understand, "relief" and "exemption" mean completely different things.

I have raised concerns with her as such.  Anyone with knowledge can comment please?

Thanks

https://www.gov.uk/guidance/stamp-duty-land-tax-transactions-that-dont-need-a-return

Where the divorce exemption applies, there is no need for a land transaction return.  Usually the conveyancers will refer in the transfer to the reference number of the court proceedings and to the agreement under which the transfer is being made.  That way the Land Registry can see on the face of the transfer why no SDLT5 certificate is being sent.

There is some HMRC guidance on the exemption here: https://www.gov.uk/hmrc-internal-manuals/stamp-duty-land-tax-manual/sdltm00550

The link below is even clearer.  I do not agree with them that the SDLT return should be sent to HMRC with an incorrect relief code claim simply because they can't find a exemption code, which doesn't exist.

Of course I can always answer any queries that may be raised by HMRC from the incorrect submission, but it would be better not to submit something incorrectly, when it isn't even needed in the first place.

https://stampdutyadvicebureau.co.uk/book/sdlt-classifications-reliefs-and-exemptions/sdlt-exemptions

Divorce or Dissolution of Civil Partnership Relief

• Relief Code: This situation does not require a specific relief code because no SDLT return is necessary for property transfers that are part of a divorce or civil partnership dissolution.
• SDLT Rate: The SDLT rate for these transfers is effectively 0%, reflecting the exemption for property transfers under these circumstances.