18th
Aug 2021
The thousands of landlords who took advantage of the Stamp Duty holiday by snapping up additional properties to existing portfolios or new investors entering into the sector, have been issued with a stark warning by a tax consultancy firm to stay alert of possible impending HMRC investigations which are going to substantially increase.
The tax consultancy defines itself as a private wealth firm and states the number of HMRC probes into SDLT (Stamp Duty Land Tax) plummeted by 75% since the start of the pandemic as it had to concentrate on managing Covid related tax issues.
However the consultancy says the HMRC will almost certainly be taking the time to scrutinise returns submitted over the past eighteen months.
The firm says the pertinence of SDLT relief will be judged case by case rather than by an overall objective stance and the HMRC could challenge claims by property owners. However some may not be deliberately trying to fleece the tax payer, but because of not fully understanding the rules believe they are right in claiming relief.
Legitimate ways that owners can claim relief on SDLT on having bought a property include if their property is a mixed-use property thereby able to qualify for a ‘cheaper’ commercial rate of stamp duty; another method is to claim that their property is in multiple dwelling, such as an annexe or granny flat.
However rest assured that HMRC’s SDLT investigations will not doubt uncover bogus claims where owners have attempted to dishonestly ‘skew’ disclosures to take advantage of evading or underpaying stamp duty.
Partner of the private wealth firm Kyra Motley, says: “It is an astonishingly sharp drop in SDLT investigations, especially when set against the boom in residential property transactions.
“It seems unlikely that this drop in investigations means there has been a similarly sharp drop in wrongly claimed SDLT reliefs.
“HMRC will be keen to make up for the shortfall in investigations over the past year. We would expect them to scale up activity now that lockdown restrictions have ended and all the HMRC teams return to a more normal working environment.”
News Archive »