Imagine Mr and Mrs A who purchased their dream rural idyll on 1 May 2017, but were still working in London so couldn't sell their current home. They would have paid the 3% higher rate for additional dwellings (HRAD) surcharge, but thought they could claim that back as they had 3 years within which to sell the London property, i.e. up to 30 April 2020.    

On 15 December 2019, they celebrated as they exchanged contracts for the sale of the London property with a completion date of 31 March 2020, as that was when Mrs A was due to retire.  However, government advice between 26 March and 13 May 2020 meant that completion could not occur as planned.  Instead, it took place on 1 June 2020, outside the three year window.  

Fortunately, recently published guidance in the HMRC SDLT Manual indicates that in such a situation, HMRC should be able to exercise their discretion and issue a refund.  The guidance includes other examples of reasons for late completion that would not be regarded as exceptional circumstances for the purposes of a refund, for example, an inability to maximise sale proceeds. In essence, HMRC are looking for the sale to have been frustrated.