Why pylons and pipes on your property could owe you a stamp duty refund

David Hannah, Founder of SDLT specialists Cornerstone Tax, discusses why, if you are one of 6m affected, pylons and pipes on your property could owe you a stamp duty refund.

Stamp duty is a tax that – prior to the holiday – cost homebuyers £13 billion a year collectively. It has been estimated that over £3 billion worth of stamp duty was overpaid in 2015/16 due to mistakes in advice, and confusing and complex rules.

Stamp duty is a poorly understood tax, and with the nine-month holiday set to end in March 2021, this confusion amongst homebuyers around the ever-changing nature of SDLT is only likely to increase.

One lesser known intricacy of the SDLT is the Wayleave Agreement, which allows eligible homeowners to pay a reduced stamp duty fee. Wayleave Agreements essentially give rights to power companies to install, place or run their equipment in or over the land that your property sits on, in order to provide power to the United Kingdom.

Wayleave Agreements are a fundamental and crucial part of our lives and society, but new research commissioned by stamp duty advisory practice, Cornerstone Tax, revealed that 34% of British homeowners who gave access to utility companies to lay infrastructure on their land, were not advised that they could have paid a reduced rate of stamp duty at the point of purchase. This often leads to homeowners being owed tens of thousands of pounds in stamp duty refunds.

David Hannah, principle consultant and founder of Cornerstone Tax, explains:

“This research demonstrates a lack of clarity in and around stamp duty land tax, both by the public and by the legal sector. Millions of properties across the UK could qualify for reduced stamp duty rates, if for example, they have granted access to utility companies to lay cables and pipes in or over their land. In these cases, solicitors have a duty of care to inform their customers of all potential stamp duty reductions, including where Wayleaves is available.

“The mistakes being made are in almost all cases totally unintentional and otherwise made in fear of underpaying. Most legal professionals are ill-equipped to navigate the complex laws and rules around the SDLT – it is incredibly complex and many advisors who help homebuyers evaluate how much they should pay are trained only to differentiate between residential and commercial property.

“They simply aren’t familiar with the intricacies of the law’s evaluation criteria, which has led to many being mis-advised unintentionally. There are a number of other reasons why people have overpaid; it’s not always a misinterpretation of the 3% surcharge.”

Kindly shared by Cornerstone Tax

Main article photograph courtesy of Pixabay