Can HMRC Confirm a Property Transfer Is Exempt?

Some property transfers carry no Stamp Duty Land Tax at all. HMRC lists three situations where a transaction does not need a return: where no money or other type of payment changes hands, where property is left to you in a will, and where property is transferred because of divorce or the dissolution of a civil partnership¹. Those are the clearest cases of an exempt transfer.

The trap is that "no tax to pay" and "no return to file" are different questions. For most land transactions a return is due within 14 days of the effective date of the transaction, even if you do not owe any tax². Filing produces a Unique Transaction Reference Number and an online SDLT5 certificate, and the reference must be used when making any SDLT payment³.

HMRC does not routinely write to confirm that nothing is due. It does not acknowledge paper returns at all⁴. Where a form does trigger a reply, HMRC writes to confirm receipt and gives a date by which it would ask questions; no contact after that date means no questions⁵. A repayment being made is not the same as HMRC agreeing the refund was due⁶.

Transfers with no Stamp Duty to pay

Stamp Duty Land Tax applies in England and Northern Ireland only⁸. It is charged on a slice basis, so rates are graduated and more expensive properties face progressively higher rates⁸. The exemptions sit outside that structure entirely.

HMRC's list of transactions that do not need a return covers three situations: transactions where no money or other type of payment changes hands, property left to you in a will, and property transferred because of divorce or the dissolution of a civil partnership¹. A gift of a property between living people falls into the first category, because nothing is paid for it.

There is a separate point about mobile homes. There is no stamp duty to pay when you buy a mobile home⁹. That is a different rule from the SDLT exemptions above and applies to that type of purchase specifically.

Where a transfer is exempt, the practical question becomes whether a return is still required. HMRC's position is that you may still need to send a return even if you are exempt from paying¹. The exemption removes the tax, not necessarily the paperwork.

You usually still file a return, even when nothing is due

The general rule is that a return must be sent within 14 days of the effective date of the transaction, even if you do not owe any tax². That deadline applies whether or not the transaction is one of the exempt categories.

How the return is filed depends on who is doing it. If you are not represented, you must use the SDLT1 paper return and send it to HMRC by post³. If a representative is filing on your behalf, they should do this online³. In most purchases the return is handled by the solicitor or conveyancer acting for you¹⁰.

There is a wider principle behind this that appears across the tax system: unless a return is withdrawn by HMRC, it must be submitted by the due date even if there is no income to report, and penalties for failing to file still apply¹¹. HMRC will not send you a tax return or notify you to complete one if you are not registered⁸, so the obligation to know whether a return is needed sits with the taxpayer.

Inherited property: no Stamp Duty, but check Inheritance Tax

Property left to you in a will is on HMRC's list of transactions that do not need a return¹. That removes the Stamp Duty question. Inheritance Tax is a separate matter and follows its own rules.

An estate is an excepted estate where the value is below the threshold, and in that case there is no longer any requirement to fill in an HMRC tax form¹². Where the estate is not excepted, Inheritance Tax may be due. Property left to a spouse is exempt from Inheritance Tax¹³, and there is no Inheritance Tax to pay on estates left entirely to a spouse, civil partner or charity⁵.

Where Inheritance Tax is due, the estate's executor deals with it, and HMRC has a dedicated account for payment: the account name is HMRC Inheritance Tax⁴. Where a form is filed, HMRC writes to confirm receipt and gives a date by which any questions would be asked; no contact after that date means no questions⁵.

First-time buyer relief: up to £300,000 at 0%

First-time buyer relief is not an exemption from filing. It is a relief that reduces the tax to nil on part of the price, and it must be claimed.

The relief exempts the first £300,000 of the price from SDLT for a first-time buyer, provided the total purchase price does not exceed £500,000⁷. The legislation sets the rate at 0% on so much of the relevant consideration as does not exceed £300,000¹⁴. Any value between £300,000 and £500,000 is taxed at 5%, and above £500,000 the relief is not available at all⁷.

Where a purchase is made jointly, both applicants must be first-time buyers to be eligible for the relief¹⁵. If you are buying with a partner, you both need to be first-time buyers to qualify for any stamp duty exemptions¹⁶.

The relief does not apply in Scotland. It was introduced for England, Wales and Northern Ireland, and SDLT was devolved to Scotland on 1 April 2015⁷. In Scotland the equivalent relief is claimed in the first LBTT return made in relation to the transaction, or in an amendment to that return¹⁷.

Deadlines: 14 days to file and pay

The return and the payment are both due within 14 days of the effective date of the transaction². That is a short window, and it runs from completion rather than from exchange.

Late filing has a direct cost. HMRC charges a late filing penalty and interest if an SDLT return is not filed on time³. Interest is also charged on late payment once the payment date has passed¹⁸.

There is a longer window for one specific refund. Where the higher rates of SDLT were paid and the previous home took longer than three years to sell, a refund can still be applied for if the new home was bought on or after 1 January 2017, exceptional circumstances stopped the sale of the previous home, and the previous home has now been sold⁶. The application must be made within the period of 12 months beginning with the effective date of the transaction disposing of the major interest in the sold dwelling, or within a longer permitted period agreed by HMRC under exceptional circumstances⁷.

Where SDLT does not apply: Scotland and Wales

Stamp Duty Land Tax is not charged in Scotland or Wales¹. It applies in England and Northern Ireland only⁸. Scotland has Land and Buildings Transaction Tax, and Wales has Land Transaction Tax, which replaced SDLT on residential and non-residential property and land interests from 1 April 2018⁹.

The surcharge on additional properties does not apply to purchases of land or buildings in Scotland or Wales¹⁰. Where SDLT applies to a transaction it cannot be linked with any transaction where Land and Buildings Transaction Tax applies, even if it includes land in Scotland⁸.

This matters for anyone buying across a border or owning property in more than one nation. A purchase in England cannot be linked with a purchase in Scotland for SDLT purposes, so the two are assessed separately under their own rules.

Does HMRC give written confirmation that no Stamp Duty is due?

Not as a matter of course. HMRC does not tell you that it has received a paper return⁴. So a paper SDLT1 posted to HMRC may produce no reply at all, and the absence of a reply is not evidence that anything is wrong.

Where a form does generate a response, the pattern is set out in HMRC's guidance on the IHT100: HMRC writes to confirm receipt and gives a date by which any questions would be asked, and no contact after that date means no questions⁵. That is a confirmation of receipt and a closing date for queries, not a statement that no tax is due.

There is a further distinction that catches people out. Even after a repayment has been made, HMRC has not agreed that the refund is due⁶. If you receive a repayment where the amount you claimed was not due, you must pay it back along with any interest due⁶.

What the 11-character transaction reference is for

Filing online produces two outputs: a Unique Transaction Reference Number, known as a UTRN, and an online SDLT5 certificate³. The UTRN must be used when making the SDLT payment³. The SDLT5 certificate is the record that the return has been filed.

That certificate matters even when the tax bill is nil. It is the document that shows a return was made, which is what a buyer, a lender or a later purchaser may need to see. Where a solicitor or conveyancer files on your behalf, they will hold it.

If you are filing yourself and are not represented, the route is the SDLT1 paper return sent to HMRC by post³. That is the only paper route, and it is the one that produces no acknowledgement⁴.

Can I claim a refund if I paid when I did not need to?

Refunds are applied for either online or by writing to HMRC⁶. The application route is set out in HMRC's guidance on applying for a refund of Stamp Duty Land Tax.

The refund rules carry a sting. A repayment being made does not mean HMRC has agreed the refund was due, and if you receive a repayment where the amount you claimed was not due, you must pay it back along with any interest due⁶. So a refund that arrives is not a final determination.

For the higher rates specifically, the refund route has its own conditions and its own deadline, covered above. Where a refund is claimed and later found not to be due, the repayment plus interest is recoverable.

Where to get help

HMRC publishes the guidance on which transactions do not need a return, how to send a return, and how to apply for a refund¹. Those are the primary sources for anyone checking their own position.

For free, independent help with a tax problem, TaxAid provides guidance on preparing for Self Assessment and on problems paying a tax debt¹¹. Where a return has been filed late and a penalty has been charged, HMRC's own guidance on paying a Self Assessment penalty sets out the process¹⁹.

Where a purchase is being handled by a solicitor or conveyancer, they will normally deal with the return and hold the SDLT5 certificate²⁰. If a conveyancer has failed to pay the tax, that is a separate problem with its own route, covered in what to do if your conveyancer fails to pay property tax.