HMRC is set to update its guidance on the higher rate of Stamp Duty, which has been branded so confusing that it has caught out solicitors and estate agents.
Since the Government’s additional 3% Stamp Duty was applied to second homes in 2017, there have been more than 15,700 individuals wrongly paying the charge who were eligible for a refund, according to HMRC figures.
Case study:
A partner in an estate and letting agents bought a property with his wife.
The couple were moving out of rented accommodation and it never crossed their minds that they would have to pay the surcharge. The couple had sold an earlier home over ten years previously.
However, they were told that because his wife owned two buy-to-let properties, they would have to pay an extra £14,160.
The couple then ended up paying almost £28,000 in Stamp Duty, but they continued to believe they should not have paid the surcharge and was eventually proved right.
Now HMRC has indicated that it will update its guidance although they recently commented that they keep all guidance under constant review.
The news comes after the Law Society criticised a “lack of clarity” in the guidance. HMRC seems to have thought the guidance it issued was going to be sufficient, but there are so many different types of scenarios that arise when people are seeking to buy and sell a property, that not everyone fitted into HMRC’s boxes.