Penalties: Stamp Duties

 What penalties apply for late payment and late submission of Stamp Duty? How to appeal a stamp duty penalty.

This is a freeview 'At a glance' guide.

Stamp Duty penalties: from 1 October 2014 there are revised penalties for late stamping.

Stamp Duty is a tax on paper instruments and is not to be confused with Stamp Duty Land Tax (SDLT). 

Stamp Duty penalties:

• Where Stamp Duty is payable, the documents must be stamped by HMRC within 30 days of being executed; otherwise, a late submission penalty may be charged.
• If a document is executed abroad, the 30 days run from the date the document is first received in the UK. 
•  
• Penalties are calculated separately for each late document. 
• HMRC will not charge a penalty of less than £20.  
• If the delay is more than 12 months, the penalty may be higher if there is evidence that the failure was deliberate. 
• Late payment interest may also be charged where Stamp Duty is not paid on time. This is separate from any late submission penalty.

Penalties

Appeals

A penalty may be appealed within 30 days on the grounds that the taxpayer has a reasonable excuse for submitting the document late for stamping. 

HMRC lists the following as examples of what sort of excuses it considers 'reasonable'. 

From HMRC:

Some examples of a 'reasonable excuse' include:

• You can show that you posted your documents in good time, and that due to industrial action at the Post Office or other document carrier they were lost or delayed.
• The original document was destroyed beyond use in your solicitor's office due to fire, flood or another natural disaster.
• Your solicitor suffered a serious illness which prevented them from controlling their business and private affairs.
• Your solicitor died.

Some examples of excuses that HMRC will not accept as reasonable include:

• Your solicitor was waiting for you to pay the Stamp Duty, or another solicitor was due to pay it.
• You were waiting for a valuation. In this situation, you should send in your documents while the valuation is being decided.
• The delay was caused by the vendor's solicitor.
• There was a disagreement between your solicitor and the vendor's solicitor.
• You were abroad and could not sign the documents. In this situation, you should arrange a Power of Attorney so that someone else can sign on your behalf.
• The documents were held by another government department, for example, the Land Registry.

Note that if the reason for the delay was a personal one, HMRC will not accept it as reasonable if it did not prevent you from dealing with your other affairs.

Bear in mind that each case will need to be decided according to its own merits and HMRC's view is only its own view: the tribunal may hold a different opinion.

See HMRC penalties for Stamp Duty returns and payment

Useful guides on this topic

Stamp duty: Share for share exchangesHow to you calculate stamp duty on a share for share exchange? What relief is available from stamp duty on a share for share exchange?