Editor: Speculation is already rife about the possibility of tax cuts in the Spring Budget. So far, income tax and inheritance tax have been the focus, but from a property perspective, possible reductions in the headline stamp duty land tax (SDLT) rates remain a popular theme.
There is generally less discussion, though, about the wider SDLT regime, which has become increasingly complex over the past 10 years or so. This is particularly the case in relation to higher-value residential property, where there is now a maze of different rates and reliefs.
For example, in recent years, particular issues have arisen in relation to two quasi reliefs: mixed-use relief and multiple-dwellings relief (MDR). Where they apply, these reliefs can materially reduce the rates, and therefore the tax, applicable to transactions involving residential property. We have seen a deluge of tribunal cases in recent years as HMRC challenges – for the most part successfully – claims for these reliefs.
With some of the law in this area arguably in a state of flux, SDLT advisers’ jobs have become harder, which in turn has affected compliance costs for purchasers.
HMRC has consulted on a number of proposals for reforming the mixed-use relief and MDR rules in order to reduce the scope for what may be regarded as incorrect or abusive claims.
However, since the consultation closed in February 2022, no feedback has been shared or preferred option announced. With the Budget on the horizon, perhaps we can expect a further announcement on this soon.
Jonathan Woodall, partner, Winckworth Sherwood
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