Should it be established that you have overpaid SDLT and you are due a benefit from HMRC, you will typically receive your reward in one of three ways, they are as follows:
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1. Stamp Duty Land Tax Refund​
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A Stamp Duty Land Tax refund refers to a situation where a person or entity who has already paid the tax on a property transaction becomes eligible to receive a reimbursement of the amount paid. This typically occurs when certain conditions or circumstances change after the transaction, making the individual or entity eligible for a refund.
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2. Stamp Duty Land Tax Exemption​
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A Stamp Duty Land Tax exemption refers to a situation where a person or entity is entirely relieved from the obligation of paying the tax on a property transaction. In other words, they are exempted from any liability to pay Stamp Duty Land Tax, regardless of the transaction's value or circumstances. Exemptions are usually granted in specific cases outlined by the tax legislation, such as certain types of properties or specific types of buyers.
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3. Stamp Duty Land Tax Relief​
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Stamp Duty Land Tax relief refers to provisions within the tax legislation that allow individuals or entities to receive a reduction or mitigation of the amount of tax they are required to pay on a property transaction. This relief is granted in specific circumstances outlined by the tax legislation, such as purchasing properties for certain purposes (e.g. first-time homebuyers relief) or under specific conditions (e.g. properties with agricultural use relief). The relief reduces the tax liability without necessarily exempting the individual or entity from paying any tax.
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In summary, a refund applies to cases where the tax has already been paid and is reimbursed, exemption refers to complete relief from paying the tax, and relief provides a reduction or mitigation of the tax liability without total exemption.