Vernon Sellahewa
Legal
SDLT Tribunal Case Highlights Risks of Misunderstanding Relief Rules
A recent case, Bemal v HMRC [2025] TC09467, has shed light on the importance of correctly understanding Stamp Duty Land Tax (SDLT) rules – particularly when it comes to classifying a property as residential or non-residential.
In this case, the buyer (the appellant) appealed HMRC’s refusal to refund an SDLT overpayment. He had claimed that lower, non-residential rates should have applied to the property he purchased. However, the Tribunal disagreed. Even though the property wasn’t suitable to live in at the time of purchase, it was clearly in the process of being constructed or adapted for residential use.
That crucial detail meant it fell within the legal definition of residential property, and therefore the higher residential SDLT rates were correctly applied. The appeal was dismissed, leaving the buyer liable for the higher amount of tax.
The above case highlights how complex SDLT rules can be—and how easily they can be misunderstood. Buyers should be particularly cautious when approached by third-party companies offering SDLT relief or refunds. As mentioned in our previous blog, How Companies are Encouraging Buyers to make Unfounded Claims Regarding SDLT Refunds | Mullis & Peake, some of these firms promote aggressive or incorrect interpretations of the rules, which can lead to costly disputes with HMRC. The HMRC have found that over 95% of ‘Not Suitable for Use’ claims are incorrect and fell below the required threshold.
Vernon Sellahewa, a solicitor in our Residential Property Department said:
“Always seek independent tax advice before making any SDLT claims or relying on third-party relief schemes. At Mullis & Peake LLP, whilst we are unable to provide tax advice ourselves, our team works closely with clients to ensure that their property transactions are managed accurately and confidently.”