What the PN Bewley v HMRC (2019) Ruling Means for Your Stamp Duty Refund
Explore how the landmark PN Bewley v HMRC ruling changed Stamp Duty Land Tax (SDLT) rules for uninhabitable properties — and discover whether your purchase qualifies for a rebate.
3 min read
In January 2019, the tribunal decision in PN Bewley Ltd v HMRC (2019 UKFTT 65 (TC)) marked a turning point in how SDLT is applied to properties in poor condition. The tribunal concluded that a bungalow which was unoccupied, asbestos-ridden and without heating or floorboards was not suitable for use as a dwelling at the date of purchase. For you as a property investor or buyer, this case offers a practical opportunity: if you acquired an additional residential property and it was in a similar state of disrepair, you may be eligible to reclaim overpaid SDLT (including the 3 % higher rate surcharge).
At The Stamp Duty Experts, we help claimants understand how this case applies, gather the right evidence, and submit a refund claim to HMRC.
What Happened in the Case
The appellant company purchased a bungalow and plot for £200,000 in January 2017, intended for demolition and redevelopment. The building had been vacant since 2014, the heating system and copper piping removed, and a demolition survey identified asbestos needing urgent removal. The company’s SDLT return classified the property as residential and paid the standard rate plus the 3 % surcharge for an additional dwelling. HMRC amended the return, increasing the SDLT liability from £1,500 to £7,500. The company appealed. The tribunal’s focus was the statutory test: is the building “used or suitable for use as a single dwelling” at the effective date of the transaction (para 18(1)(a) Schedule 4ZA, Finance Act 2003)?. The tribunal held it was not. Crucially, the decision emphasised that the test is instantaneous, not based on future potential occupation.
As a result, the property was treated as non-residential for SDLT purposes, the higher rates did not apply, and the surplus tax paid could be reclaimed.
Why It Matters for Buyers Now
If you purchased an additional residential property (whether as investment or second home) and found it required substantial work, you might have overpaid. This is especially relevant when one or more of the following apply: the property lacked heating or plumbing, was unoccupied for some time, required demolition, or contained hazardous materials like asbestos. The Bewley ruling shows that such conditions may mean a property is not a “dwelling” in the sense required for higher SDLT charges.
However, it’s equally important to understand the limits. In a more recent case, Henderson Acquisitions Ltd v HMRC (2023 UKFTT 739 (TC)), the tribunal rejected a claim where the property needed modernisation but was still habitable at purchase.This underlines the fact that mere disrepair or cosmetic defects don’t automatically give a refund right. The property’s condition must go beyond renovation into being unsuitable for residential use at completion.
How to Apply This to Your Property
Start by gathering information relevant to your property purchase: survey reports, photographs at completion, utility disconnection notices, solicitors’ completion statements, and any internal evidence of disrepair. Then ask whether, at the date of purchase, your property was more than simply in need of updating — was it reasonably unfit for somebody to live in without significant works?
If the answer is yes, you may be in a position to claim back overpaid SDLT. At The Stamp Duty Experts, we offer a full service: from document review, through to submission of your case to HMRC. The typical timeline for a case that has all the required documentation is about six weeks from submission to refund.
How to Apply This to Your Property
Start by gathering information relevant to your property purchase: survey reports, photographs at completion, utility disconnection notices, solicitors’ completion statements, and any internal evidence of disrepair. Then ask whether, at the date of purchase, your property was more than simply in need of updating — was it reasonably unfit for somebody to live in without significant works?
If the answer is yes, you may be in a position to claim back overpaid SDLT. At The Stamp Duty Experts, we offer a full service: from document review, through to submission of your case to HMRC. The typical timeline for a case that has all the required documentation is about six weeks from submission to refund.
