SDLT Deadlines: The impact for Solicitors and Accountants following Candy v HMRC

Overview

A recent decision by the First-tier Tribunal (“FTT”) in Christian Candy v HMRC [15.04.25] (Candy) has offered fresh insight into the operation of Stamp Duty Land Tax (SDLT) deadlines and the scope of overpayment relief. While the outcome has caught the attention of tax professionals, the case also raises important questions for solicitors and accountants involved in property transactions - particularly around the scope to advise of applicable deadlines.

The Decision in Brief

Mr Candy transferred a property to his brother, shortly after he had purchased it. This resulted in a SDLT liability of £1.92m. Following the transfer, Mr Candy sought a SDLT refund, on the basis that both he and his brother had effectively paid the same tax on the same transaction. Mr Candy made an application to reclaim the SDLT, but this was after the 12-month period during which the SDLT return could ordinarily be amended and any application for relief made. HMRC refused to allow the application for relief.

Mr Candy argued that overpayment relief was still available under Paragraph 34, Schedule 10, Finance Act 2003, which provides an extended time limit for an application, as long as it is made within four years of the date of the transaction. HMRC rejected the claim on the basis that the one-year limit in paragraph 4 of Schedule 11 was exclusive and that paragraph 34 was not intended to apply in circumstances where relief could be claimed elsewhere.

The FTT decision

The Tribunal overturned the original decision and found in favour of Mr Candy. It confirmed that overpayment relief under Paragraph 34 is available even if an earlier route has closed, provided that no other effective remedy remains available. The purpose of Paragraph 34 was held by the FTT to be a last resort option, when no other avenues were available.

Implications for solicitors and accountants

Where SDLT liabilities are significant or the structure of the transaction is complex, a solicitor and accountant’s role in flagging potential reliefs and referral for specialist tax advice can be critical. The role is even more important following the decision in Candy.

In light of the decision, solicitors and accountants should ensure that potential relief claims are made in time and that they have flagged the potential extended time period to clients. Claims are likely to arise when clients are not advised of the potential extended deadline.

Historic SDLT transactions may also need to be revisited. Accountants and solicitors could be expected to consider whether recoveries, previously considered out of time, can now be made as a result of this decision, which could include reviewing any transactions that have completed in the last four years. A proactive approach should be encouraged – clients are unlikely to be aware of this decision and will rely on professional advice. Indeed, this could be positive – when firms are facing claims in relation to out-of-time SDLT relief claims, the Candy decision could be a lifeline and allow potential losses to be avoided.

The difficulty is that the decision is only of the FTT and it is likely to be appealed. How much weight advisers give to the decision remains to be seen. They may face criticism for recommending that the appeals are made, which are ultimately unsuccessful, or face criticism for failing to recommend an appeal. Explaining to clients the risks (and costs) associated with seeking a recovery of SDLT will be important, now more than ever.

Comment

Candy does not radically reshape the SDLT landscape, but it does serve as a timely reminder that advisers must be alive to the full range of avenues available to clients for SDLT relief. Now is the time for advisers to review internal guidance, update client communications, and be prepared for retrospective scrutiny.