The Government announced on 3rd June 2020 that it intended to extend the 3-year time limit for the refund of the Supplemental 3% Stamp Duty Land Tax charge which is paid when purchasing an additional property.

There are a number of caveats to what might at first sight seem a generous concession: first, this will only apply where the 3-year period ended on or after 1st January this year (in other words only for purchases which completed on or after 1st January 2017). Secondly, the Taxpayer must show that the sale was delayed by “exceptional circumstances” which they could not control; and thirdly, the Taxpayer must sell their property as soon as they reasonably can after those circumstances which prevented the sale have ended.

Taxpayers will only know if their circumstances qualify for a refund after they sell and HMRC makes clear that they will look at each case on its own merits.

HMRC states that “exceptional circumstances” would include where Government guidance during the Covid-19 pandemic (or other public authority action) prevented a sale, but that will not include what it describes as “events that occur in the ordinary course of buying and selling property”, such as people changing their minds, or being unwilling to sell at a loss (regardless, it seems, whether those might be caused by Covid-19) or lack of funds.

Examples provided by HMRC in its Manual, include some which make clear that to be successful in a claim for a refund, the Taxpayer’s marketing of their property must have actually been prevented by the Government Covid-19 advice on 26th March 2020, that the Taxpayer should sell as soon as they reasonably can after 13th May 2020 (when that advice changed), and that the concession cannot be used merely to extend the period to a time when marketing conditions are more favourable.

For advice on SDLT matters please contact any member of our Property Team.