CQS Stamp Duty Land Tax Policy (Oct25)

Policy

This policy applies to all staff in The Eric Whitehead Partnership that are subject to compliance with the Conveyancing Quality Scheme (CQS). For the purposes of this policy, the term “Staff” means all members of The Eric Whitehead Partnership staff including permanent, fixed term, and temporary staff, any third-party representatives, agency workers, volunteers, engaged within the business under CQS.

This policy is in line with Requirement 5.16 of the CQS Core Practice Management Standards, Version: 23 February 2022 (effective from 1 May 2022).

SDLT includes Land Transaction Tax, where applicable.

Steps you must take

We need to ensure SDLT calculations are accurate, and that purchaser clients are properly advised about their liability before they exchange contracts. Hence conveyancing fee earners must do the following as early as possible in a transaction.

• Remember your duty to ensure your clients are in a position to make informed decisions about the advice they may need and the options available and ensure you set out the limits to the areas on which you will advise. Make it clear in the retainer/ client care letter, that only SDLT and LTT calculations that are of the most simple and straightforward kind will be included in the initial quote and more complex calculations will be provided once the client has provided the necessary information (see the next point). For particularly complex tax calculations, consider including a provision reserving the right to instruct specialist tax counsel or to refer the client to tax advisers (along with the right to charge the client the fees incurred in doing so.
• Have the SDLT Information Form completed (see below) so as to obtain the necessary information from the client – ensure this is approved and signed by the client if they do not complete the form themselves.
• Calculate the SDLT payable, using the HMRC SDLT calculator, which can be accessed here.
  For LTT, an LTT calculator is available here.
• Check that the assumptions made about the SDLT remain correct by checking with the client that the information they have given has not changed. Then double check your SDLT calculation before exchange of contracts. If you have less than three years’ experience that should involve having your SDLT calculation and advice checked by an experienced supervisor before you send it to the client. The verification process must be recorded on the file.
• Advise the client in writing of the amount of SDLT calculated to be payable (see below).
• Provide the client with any further SDLT advice necessary. For example, where a transaction is subject to the 3% ‘higher rates’ surcharge but is intended as a replacement of the client’s current main residence, advising the client of the need to complete a sale of the current main residence within three years of completion of this transaction.
• Keep an audit trail of evidence of what you have done on the matter file, including:
  • A copy of the completed SDLT Information Form.
  • Evidence that you sent the form to the client to check, if it was not filled in by the client and evidence that they signed the declaration to confirm their approval of the contents.
  • A copy of your SDLT advice.
  • Document the amount of SDLT payable in a cash statement which is readily accessible to supervisors and which is supported by evidence of payments into and out of client account.

Be alert to risks

Tax Evasion

Be alert to circumstances where the client might be attempting illegally to avoid or minimise liability to SDLT (e.g., an unreasonable apportionment of a purchase price between the price for the land and the price for any chattels or where there s evidence that they are not a first time buyer when they say they are).

Extra Liability

Also be alert to potential traps for the client which result in a liability or greater liability to SDLT than would otherwise be the case (e.g., simultaneous sale of buy-to-let/purchase of first home where the purchase transaction completes with bridging finance but the sale is delayed, resulting in the client owning two homes, and irrecoverable 3% surcharge tax is therefore incurred).

Overseas buyers

Be alert to cases where the 2% ‘non-resident transaction’ surcharge applies. This is a surcharge applied under SDLT (but not LTT) where a non-UK resident is buying an interest in a dwelling.

A ‘non-resident transaction’ is one where the purchaser or, if there is more than one purchaser, at least one of the purchasers is not resident in the UK, the transaction involves the acquisition of a major interest in one or more dwellings (whether with or without other property), and the consideration for the transaction is £40,000 or more (or, where the consideration includes rent, the average annual rent is £1,000 or more).

A person is treated as being resident in the UK if he or she is present in the UK (meaning present at the end of a day) on at least 183 days during any continuous period of 365 days falling within the ‘relevant period’. The ‘relevant period’ is a period beginning with the day that is 364 days before the effective date of the transaction to a date that is 365 days after the effective date. Where spouses or civil partners acquire jointly and are treated as living together for the purposes of the Income Tax Act 2007, and one of them qualifies as being resident in the UK in relation to the transaction, but the other does not, both are treated as UK residents in relation to the transaction.

Reliefs

Check to ascertain if any reliefs from SDLT or exemptions from higher rates are available to the client. For example, first-time buyer’s relief is applicable under SDLT, but not LTT.

Other reliefs include multiple dwellings relief, sub-sale relief, relief for annexes/granny annexes, mixed use relief and exemption from the 15% charge on ‘higher threshold transactions’ for corporate buyers of dwellings (applicable under SDLT, but not LTT)).

Price Changes

Take care over any changes in the price. Ensure that the consideration is consistently stated in the contract, transfer, SDLT return form and in the firm’s client account ledger and correct or report any discrepancies.

Lodging the SDLT return and payment to HMRC

The timescale for submitting the SDLT return and making the necessary SDLT payments to HMRC is within 14 days after the effective date of the transaction. The effective date is usually the completion date.

Payment can be made by way of a bank transfer or debit card/credit card transaction. If the tax is paid late, we will be required to pay interest from the day after we should have paid it until the day it is paid.

The firm’s preferred method is by bank transfer which is to be actioned by the accounts department. It is important to note that HMRC must receive the payment before the 14 days deadline therefore the time allowance for the relevant payment method to take effect will need to be factored into the payment process.

Amending an SDLT return

If you need to amend an SDLT return, you have 12 months from the filing date to do so. Minor errors can be amended by phone, however for more substantial errors, you will need to write to HMRC and in some cases, submit a new SDLT return.

More information can be found via the following link.

Overpayment of SDLT

If you believe that you have overpaid SDLT, you can apply to HMRC for a refund, and they have up to 9 months thereafter to undertake a compliance check to ensure that the refund was due to the client. If a repayment is received where the amount repaid was not due, HMRC will require this to be paid back along with any interest/penalties.

Lodging the LTT return and payment to Welsh Revenue Authority Tax (WRA)

 The timescale for submitting the LTT return and making the necessary LTT payments to the WRA is within 30 days after the effective date of the transaction. The effective date is usually the completion date.

A LTT return can be amended up to 12 months from the filing date using an online form and a refund can be applied for online. More information can be found via the following link.

Recommended warning to give to buyers in completion confirmation letter

All clients purchasing property should be warned about the possibility of being contacted by companies’ post-completion claiming they can obtain a partial SDLT refund on their behalf and of the risks involved in making unfounded claims to HMRC.

File reviews

Note that the firm’s file review process will include making checks between the consideration stated in the sale contract and transfer deed and SDLT/ LTT return and the payments on the solicitors’ client account ledger for the transaction.

SDLT [LTT] information form

Note to fee earners:

The following form should be filled in on every purchase. Ideally it would be filled in and signed by the client. However, many clients will find that difficult so you may need to fill it in, having obtained information from the client. In that case you must send them a copy so they can check it is correct and keep a record on file.

Report to your supervisor/Head of Department if any of the following apply:

• The consideration stated on the contract/transfer does not match the consideration the client wishes to have stated on the SDLT return.
• The client appears to be considering entering into any scheme or arrangement designed to reduce SDLT.
• There is the possibility of a linked transaction; e.g., the client is buying other property at the same time.
• You become aware of a change of circumstances that casts doubt on the accuracy of the SDLT calculation e.g. you become aware that a client is in fact not a first time buyer.

Please answer the following questions – IF THERE ARE JOINT BUYERS, EACH OF YOU MUST ANSWER AND SIGN: 

Note that, as with all taxes, it is your personal responsibility to ensure that the correct information is given to the tax authorities and the correct amount of tax paid. If you do not do so, HMRC [the WRA] may investigate and take action including recovery of underpaid tax and other sanctions.

Please note that our role in submitting the tax return as your agent is limited to completing the form based on the information you provide, submitting the form on your behalf and (subject to receipt from you to make the payment) paying the tax due.

 Declaration

 I/We have been advised of the personal nature of my SDLT/ LTT liability and the consequences of any failure to disclose fully any interest of which I am/ we are aware.

 I/We accept that if any circumstances come to light that make me/us liable to the additional SDLT surcharge the liability rests with me/us.

 I/We further declare that the information given by me/us is correct and complete to the best of my/our knowledge and belief and understand that I/we may have to pay financial penalties and face prosecution if I/we have given false information which results in an incorrect SDLT submission being made by me/us or on my behalf.

 I/we declare that the information contained herein is true to the best of my knowledge and understand that I/we must inform you of any changes to the information provided before submission of a tax return in connection with our purchase.

 Unless you hear from me/us to the contrary you may assume that you have my/our authority to disclose information to other parties in the conveyancing chain, including estate agents.

 I/we confirm that you are authorised to discuss details of the transaction with the following:

………………………………………………………………………………………………

(Insert above the names of any persons who do not own the property who you authorise us to communicate with regarding this transaction)

I/we confirm that you may accept instructions from either one or both of us together and either one of us can act as agent for the other.

SDLT Confirmation Letter

We have calculated the SDLT due in relation to your purchase to be £x.

This is based on the purchase price of £x and the following conclusions from the information you have given us:

• Your purchase does/does not qualify for first-time buyer’s relief. (This is not applicable in Wales).
• Your purchase is not part of an acquisition of more than one dwelling (Wales only)
• The higher rate of tax applicable on the purchase of a second home or residential investment property do not apply.
• You/Both of you are UK residents
• Your purchase is a shared ownership transaction, and you have elected to pay tax on the share of the property you are now acquiring/full open market value of the property.

Let me know if you think any of that may not be correct.

This policy will be reviewed by the CQS SRO on an annual basis.

October 2025