Tax, Duty & Conveyancing

How to Check Duty in Wales

Stamp Duty is called Land Transaction Tax in Wales. The Welsh Revenue Authority are the body who oversee it rather than HM Revenue & Customs. You can use the Welsh Revenue Authority online calculator to check your Land Transaction Tax. Their Calculator is easy to use and you just answer the questions and click through to the result. See the weblink below for calculator:

https://lttcalculator.wra.gov.wales/ChargeableTransactionType

How to Check Duty in England

England’s Stamp Duty Land Tax calculator is online and found here:

https://www.gov.uk/stamp-duty-land-tax/residential-property-rates

HIGHER RATE

Buyers pay Higher Rate if they (together or separately) already own property anywhere in the world or if purchasing in a limited Company name. Bear in mind that this applies to inherited property as well. The important question when considering whether Higher Rate applies, or not, is if the purchase property is your main residence, a second home, or a buy to let / investment property. You don’t pay Higher Rate on your main residence. If in doubt you can always email the Welsh Revenue Authority who are incredibly helpful in comparison to HMRC.

FIRST TIME BUYER RELIEF

Wales does not have First Time Buyer Relief whereas England does.

CALCULATING DUTY

The Duty payable depends on whether the property is residential or commercial and the consideration paid (the price). Exemptions and Reliefs may apply to you. It depends upon your circumstances.

Land Transaction Tax is a personal tax and self-assessed. You need to instruct your Conveyancer accordingly. Conveyancers are not Tax experts and Tax law is vast. Take appropriate advice from a tax specialist. This advice is not via your Conveyancer as tax advice is not within their remit.

Bear in mind - it is your responsibility to pay Duty and submit the return and NOT your Conveyancer’s. The contents of the Return will be based on your instructions to your Conveyancer. They act as agent only and rely on the information you give them. Investigations can be launched by the Revenue post completion so it is important that you give your Conveyancer accurate instructions based on the tax advice from your specialist.

REFUND OF OVERPAYMENT

If you sell your main residence (the one you live in) and move into your second home within 3 years you can make a claim for reimbursement of higher rate duty you have paid. You do not need to instruct anyone to do that for you. This can be done online with the Welsh Revenue Authority quite easily.

https://www.gov.wales/claim-refund-land-transaction-tax-higher-rates

AND with HMRC on English property via:

https://www.gov.uk/government/publications/stamp-duty-land-tax-apply-for-a-repayment-of-the-higher-rates-for-additional-properties

REMEMBER - This is a self-assessment tax your Conveyancer, as agent, pays on completion. They acted on your Instructions at the time. You do NOT need to pay someone to claim a refund if you have overpaid duty on a purchase of property. All that you need is to apply within 3 years of the completion date AND have your UTRN number from your Conveyancer.

Tax, Duty & Conveyancing | A Note on Inheritance Tax & Capital Gains Tax

Conveyancers are NOT tax advisors . We are NOT regulated by the Financial Conduct Authority and cannot give Tax or Financial advice. You should speak to an expert in that field. We may be able to recommend someone for you. There is information out there, freely available to all on the internet. The Government has also set out the relevant information on inheritance Tax here…

https://www.gov.uk/inheritance-tax

REMEMBER: Your tax Return is your responsibility. Errors in your Land Transaction Tax Return fall on you and NOT on your agent, ie. your Conveyancer.

If your Conveyancer submits a Land Transaction Return (LTT - Wales)* on your behalf, they do so as your agent, and based on the instructions you gave to them when you returned your client care pack.

Bear in mind that the Revenue can pursue you after completion for any underpayment or fraudulent return. It is also a criminal offence to defraud the Revenue. They can, and do investigate. See my blog article on this.

The only tax or duty a Conveyancer is involved with is Land Transaction Tax (Wales) and Stamp Duty Land Tax (England). They will have cursory knowledge of reliefs and rely on you to give appropriate instructions. They will not know your personal circumstances and which reliefs apply to you. As a self-assessed personal tax you need to instruct your Conveyancer appropriately.

Capital Gains Tax

The Government has set out the relevant information on Capital Gains Tax here…

https://www.gov.uk/capital-gains-tax

REMEMBER: Your Tax Return is your responsibility. you are self-assessed. Errors fall on you and NOT on your agent I.e. your conveyancer. Your conveyancer only submits the Land Transaction Tax Return as agent.