Stamp Duty Changes: SDLT Risks for Conveyancing Lawyers

Originally published January 2016. Updated October 2026.

Stamp duty changes create risks for conveyancing lawyers when client questionnaires, calculations and advice fail to keep pace with the rules. The challenge is often establishing the facts that determine which tax treatment applies.

Our original article examined the consultation preceding the introduction of higher SDLT rates for additional residential properties in 2016. That consultation has closed. This updated article focuses on practical controls for today’s conveyancing files.

What has changed since the original article?

The original article discussed a proposed 3% additional-property surcharge. Current HMRC guidance generally applies an additional five percentage points to residential SDLT rates where the higher-rate rules apply.

The standard residential nil-rate band is currently £125,000. First-time buyer relief has separate conditions: eligible purchases attract no SDLT on the first £300,000, with relief unavailable where the purchase price exceeds £500,000.

These figures do not determine every transaction. Check the effective date, applicable conditions, reliefs and any transitional provisions using HMRC’s current residential SDLT guidance.

SDLT applies in England and Northern Ireland. Wales uses Land Transaction Tax and Scotland uses Land and Buildings Transaction Tax.

Ask questions clients can answer accurately

Asking whether a purchase is a “second home” can produce an incomplete answer. A client may overlook an overseas property, an inherited share or an interest held through a trust.

A practical questionnaire should gather the facts needed to assess:

• Existing residential property interests in the UK and overseas.
• The circumstances of every joint purchaser.
• Relevant spouse or civil partner interests.
• Whether the purchase replaces a previous main residence.
• Potential first-time buyer relief and non-resident surcharge issues.
• Company, trust or other unusual purchasing arrangements.

Apply the relevant rules to those facts. Explain why the questions matter and query answers that conflict with other information on the file.

Check higher rates and main residence replacement

Buying a property to live in does not automatically prevent the higher rates from applying. Existing ownership, joint purchasers and relevant spouse or civil partner circumstances can affect the result.

Where a client buys before selling their previous main residence, assess the tax payable at completion separately from any potential later refund. Refund eligibility generally involves disposal within three years, subject to the detailed conditions and any applicable exceptional-circumstances provisions.

Do not promise a refund merely because the client intends to sell. Explain the conditions, claim deadline and who will handle the application.

Use HMRC’s higher-rate SDLT guidance when assessing the transaction.

Reconfirm facts before completion

Information provided at instruction may change. A planned sale may be delayed, another property may be acquired or the identity of a purchaser may change.

Build a final review into the workflow. Confirm whether relevant circumstances have changed and revisit the calculation where necessary.

A signed client questionnaire is useful evidence of instructions. It does not resolve an inconsistency or replace the firm’s analysis of the applicable rules.

Keep an audit trail of the SDLT calculation

The file should allow another reviewer to understand how the result was reached. Record the client information relied upon, relevant guidance, calculation and reasons for claiming relief or applying a surcharge.

Check that the consideration used is consistent with the transaction documents. Escalate linked transactions, mixed-use claims, unusual consideration and other complex arrangements for appropriate review.

Our article on preparing an SDLT policy examines questionnaires, calculations and audit trails in more detail.

Define responsibility when using external tax advisers

If specialist advice is needed, agree the scope, information required, turnaround time and cost early. Record who will advise, approve the return, submit it and manage any subsequent enquiry or refund claim.

Explain that arrangement to the client and ensure the specialist receives accurate transaction information. Review our related article on SDLT outsourcing and conveyancing risk.

Monitor filing and payment deadlines

For a straightforward purchase, HMRC generally requires the SDLT return and payment within 14 days of completion. Check the effective date and any special rules relevant to the transaction.

Use clear diary controls, identify who is responsible and retain submission and payment evidence. Make provision for staff absence and failed submissions.

See HMRC’s SDLT overview and filing information.

Review the firm’s SDLT procedures regularly

When tax rules change, review questionnaires, calculation tools, client communications and staff guidance together. Updating a rate table alone may leave outdated assumptions elsewhere in the process.

Our article on operational policies for conveyancing firms provides wider context for documenting responsibilities and implementing changes.

The practical lesson from the original 2016 article remains relevant: gather accurate facts, explain the tax treatment and keep a clear record of the reasoning.