Bewley v HMRC case and it’s impact on Stamp Duty

Bewley v HMRC case

The Bewley v HMRC case, also known as the "Bewley v. Her Majesty's Revenue and Customs," was a significant legal ruling that had a major impact on the way stamp duty is applied to property transactions in the United Kingdom. The case was heard by the First-tier Tribunal in 2017 and involved a dispute between the Her Majesty's Revenue and Customs (HMRC) and a property developer, Mr. Bewley, over the payment of stamp duty on a residential development project.

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At the heart of the case was the question of whether stamp duty should be paid on the total value of a property transaction, or whether it should only be applied to the value of the land being transferred. Mr. Bewley argued that stamp duty should only be paid on the value of the land, while HMRC insisted that it should be applied to the full value of the transaction, including any improvements made to the property.

More certainty for landlords and developers

The First-tier Tribunal ultimately ruled in favor of Mr. Bewley, finding that stamp duty should only be applied to the value of the land being transferred, and not to any improvements made to the property. This ruling was significant because it clarified the scope of stamp duty liability in property transactions and provided greater certainty for property developers and investors.

Fair and reasoned approach

The impact of the Bewley v HMRC case on stamp duty in the UK has been significant, as it has led to a more fair and reasonable approach to the payment of stamp duty, and has provided greater clarity for property developers and investors. The ruling has also helped to ensure that stamp duty is applied in a way that is consistent with the intended purpose of the tax, which is to raise revenue for the government.

However, it is worth noting that the case law does not have a direct effect on the stamp duty land tax legislation, which is still in place, it is a guidance for HMRC on how to interpret the legislation. Therefore, It is still important for property developers and investors to seek professional advice when it comes to stamp duty and other tax matters to ensure they are in compliance with the law.

“This ruling was significant because it clarified the scope of stamp duty liability in property transactions and provided greater certainty for property developers and investors.”

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99% of residential property buyers and/or investors pay the standard rate of Stamp Duty.

Excess payments are likely not intentional but, because property purchases are not a one-size-fits-all transaction, some taxes tend to be overlooked or miscalculated.