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Multiple Dwellings Relief (MDR)

Did you over pay SDLT on your purchase

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If you have bought a property with an annexe then MDR could apply to you!

Multiple Dwellings Relief (MDR) is an allowance that many home buyers are not aware of until many months or years after they purchased their property. Often the first time they become aware is when an accountancy firm or claims management company (CMC) send a letter. These companies mine cases and can correct the potential error for 12 months and 2 weeks after the completion.

The cause of the overpayment is that many conveyancers do not understand when it is possible to claim the reduced SDLT due on the purchase of a property with annex. For the conveyancer if there is any ambiguity it is safer to pay the higher level of tax. However of course it is your money so you would want to pay the correct tax.

Many homeowners may believe that the letter is a hoax or a scam and never look into this any further.

Multiple Dwellings Relief is not a hoax, have you contributed to the £180m overpaid in SDLT?

Many conveyancers do not understand MDR

HMRC have not helped, as they never defined what a dwelling was. A dwelling has to have certain features to be accepted and the estate agent saying “with annexe” is not enough. Given the uncertainty many conveyancers file the SDLT return as a single property thinking this is best. To be fair saying a property is two or more dwellings and being wrong does have consequences. If HMRC review the purchase and find that the application was incorrect then they can ask for the extra SDLT with interest and penalty payments.

Some of the companies who contact you are very optimistic on the definition of a dwelling so please beware. We have been asked is putting a microwave and a bucket in the garage good enough to make the garage a dwelling? Of course it is not and there are many other examples of bad practice

Can I claim MDR on my property?

In many instances the suggestion that you could have overpaid Stamp Duty Land Tax (SDLT) will be correct.

If you contact your conveyancer asking if they can claim the appropriate relief’s for you they may state that:

  1. We did nothing wrong
  2. We don’t give tax advice
  3. You would need to consult a specialist tax accountant for that
  4. We didn’t have the lenders consent to apply for MDR

Very few solicitors will actually look at any problem relating to MDR and seek to correct the error if there is one.

For the first 12 months and 2 weeks after the completion the overpayment will be returned by HMRC and this is what the people writing the letters rely on. After this time there is just under 5 years where the conveyancer must pay for the overpayment provided they were negligent which is much harder to prove.

If you really have multiple dwellings what do you do?

After 12 months has passed, you only have five more years to pursue a claim for overpaid Stamp Duty Land Tax against the conveyancer you used. A claim of this nature can only be pursued by a solicitor or by you, and not by an accountancy firm or CMC, this is why our team of experts at Lincoln Green Solicitors can assist you.

At Lincoln Green Solicitors we have successfully pursued a large number of cases of this nature, thus, we will pursue your claim under a “no win no fee” claim, and you will only pay us a fee if your case is successful.

Why use us?

Once a homeowner has become aware that they have reasonable grounds for reclaiming MDR they have just over a year to resubmit a SDLT amendment to HMRC, failing which HMRC will not accept the claim. If the window of opportunity to make the correction is lost the only recourse is a claim against the conveyancer.

At this point, having the services of a specialist solicitor like Lincoln Green Solicitors to assist you will be key. At Lincoln Green Solicitors we are experts at handling these types of claim, and are happy to pursue these types of claim for you under a “no win no fee” agreement so that you only pay if we win.

 

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