HMRC extend the 3-year time limit to obtain a refund of SDLT 3% surcharge
22 Jun 2020
HMRC have issued new guidance on exceptional circumstances preventing the sale of a main home within the 3-year time limit, in order to claim a refund of the 3% additional dwelling SDLT surcharge.
Currently there is no 3% charge levied if replacing a main residence, but if a new home is bought before the previous one is sold, then the surcharge must be paid initially and reclaimed after sale. The guidance permits an extension where the taxpayer was prevented from selling within the time limit by an “exceptional circumstance beyond their control” and the previous home was sold as soon as was reasonable after the exceptional circumstance ceased.
Being prevented from selling the property owing to Covid-19 Government guidance is specifically cited as a qualifying circumstance but waiting for market conditions to improve is not.
The previous main residence must be sold before HMRC will consider an extension and there is no pre-transaction clearance. This will come as a welcome relief to some who faced losing entitlement to a valuable refund of SDLT.
See the full outline of the new guidance HERE.