The Upper Tribunal has confirmed that Stamp Duty Land Tax overpayment relief is a real backstop — not a dead letter once the 12-month amendment window closes. In HMRC v Christian Peter Candy [2026] UKUT 00282 (TCC), decided 27 July 2026 and published shortly after, Mr Justice Cawson and Judge Ashley Greenbank dismissed HMRC’s appeal. A taxpayer who substantially performed a land contract, paid SDLT, and later saw that contract extinguished can still claim repayment under paragraph 34 of Schedule 10 to the Finance Act 2003 even after the return-amendment route under section 44(9) FA 2003 is time-barred.
If your group has ever rested on contract, started works before completion, novated a development interest, or collapsed a site deal after SDLT was paid on substantial performance, this is a cash and controls issue. Read the full UT decision PDF and pair it with Warner v HMRC [2026] UKUT 284 (TCC) — the two decisions together draw the line CFOs need. See also the Claritax note on Warner.
What happened
In 2012, Christian Candy contracted for a long lease of Gordon House in Chelsea with a £48 million premium. Building works began. Under the SDLT code, that was substantial performance: the contract is treated as the land transaction, tax becomes due, and the return must be filed. Candy paid £1.92 million SDLT and reported it.
In 2014 he novated his interests to his brother. The original contract was extinguished and “not carried into effect”. Section 44(9) FA 2003 says that where a substantially performed contract is afterwards rescinded, annulled, or for any other reason not carried into effect, tax paid by virtue of substantial performance “shall… be repaid” — and that “Repayment must be claimed by amendment of the land transaction return.”
That amendment route failed. Earlier litigation — including the Court of Appeal in Candy v HMRC [2022] EWCA Civ 1447 — confirmed the 12-month amendment window is hard-edged. Candy then claimed overpayment relief under paragraph 34 Schedule 10 FA 2003, which carries a four-year limit from the effective date. HMRC refused, arguing section 44(9) was the exclusive route. The First-tier Tribunal allowed Candy’s appeal. HMRC went to the Upper Tribunal and lost again.
The Upper Tribunal’s answer
The UT held that “must” in section 44(9) governs that repayment route. It does not lock out general overpayment relief once amendment is unavailable. Overpayment relief is a statutory last resort where excessive SDLT has been paid and no other effective path remains.
That sits with the FTT analysis in Candy v HMRC [2025] UKFTT 416 (TC): HMRC attacked exclusivity of section 44(9), not the classic “mistake consisting of failing to make a claim” bar. See KPMG’s note on the April 2025 overpayment decisions. The UT has now locked the exclusivity point for the taxpayer.
Outcome: HMRC’s appeal dismissed. The £1.92 million overpayment claim remains available in principle. Unanimous judgment. Boards should plan on the UT analysis until a higher court says otherwise.
Do not confuse Candy with Warner
One week later, the UT decided Warner. That case also involved late SDLT relief — multiple dwellings relief on Isle of Wight plots — and the taxpayer tried to recharacterise a late MDR request as overpayment relief. The UT dismissed the appeal. On the facts, no valid overpayment claim had been made in time; and if one had been, Case A in paragraph 34A would have barred it because the overpayment arose from a mistake consisting of failing to claim MDR when it could have been claimed.
That is the CFO distinction:
- Candy: tax correctly paid on substantial performance; later commercial event (contract not carried into effect) made the tax no longer due; amendment window missed through timing of the collapse, not ignorance of a claim that should have been on the original return. Overpayment relief available.
- Warner: relief that should have been claimed on the original return (or a timely amendment) was not. Overpayment relief is not a free second chance for forgotten elections and reliefs. Case A exists to stop the four-year window swallowing every missed claim.
If your team only remembers “Candy = refunds for four years”, you will overclaim and lose. If they only remember “Warner = no late relief”, you will leave cash on the table after genuine deal collapses. Both decisions are right — on different facts.
Why CFOs should care
Substantial performance is not a private-client curiosity. Development SPVs, forward-funding structures, site assemblies and PE real-estate stacks routinely hit the SDLT trigger before legal completion. Cash leaves the group. Then the deal is restructured, novated, aborted or rewritten so the original contract is never carried into effect.
Twelve months after filing, the section 44(9) amendment route is gone. Many finance teams stop there. Candy says that is incomplete. If the tax is genuinely not due, the four-year overpayment window can still fund a recovery — often seven-figure cash on large premiums.
It also matters for tax DD and locked-box deals. Buyers inherit SPVs that paid SDLT on contracts later extinguished; sellers may retain the refund right. Neither side wants a silent multi-million contingent asset discovered after completion.
The CFO controls cut
Do this in the next two board cycles if property or development is material:
- Inventory land contracts that hit substantial performance in the last four years. Map effective date, SDLT paid, current status of the contract, and whether completion, rescission, novation or abandonment occurred after the 12-month amendment window.
- Separate “deal went off” files from “we forgot a relief” files. Candy-type facts (contract not carried into effect) go on the recovery list. Warner-type facts (missed MDR or other claimable relief on the original return) go on the lessons-learned list — do not waste fees dressing them as paragraph 34 claims without a Case A analysis.
- Document extinguishment properly. Deeds of novation, rescission, or clear commercial records that the original contract is not being carried into effect are what prove the tax is “not due”. Loose emails are not a claim pack.
- Diary both clocks. Primary: amend within 12 months of the filing date where you can. Secondary: paragraph 34 four years from the effective date. Do not wait for HMRC to invite the claim.
- On PE/real-estate deals, put SDLT prepaid and contingent refunds in tax DD and SPA mechanics. Ask: any substantial performance without completion? Any novation after SDLT paid? Who owns the refund claim? Specific indemnity or purchase-price adjustment for unrecovered SDLT and related interest.
- Align legal, tax and development controls. Legal often owns the deed; tax owns the return; treasury owns the cash. One schedule, one owner, one audit-committee line if the amounts are material.
How this sits with HMRC’s payment and debt agenda
Candy is a taxpayer win on recovery. HMRC’s summer agenda is about getting cash in faster. The consultation on requiring VAT and PAYE return liabilities by Direct Debit closes 16 August 2026. The consultation on timely payments in Income Tax Self Assessment closes 4 August 2026. Same direction of travel: less lag between liability and cash.
That is why a four-year SDLT overpayment right still matters. HMRC will take money early on substantial performance. Boards need equal discipline when the commercial facts reverse the charge. For contingency/uncertainty process context, see SDLTM50300 — different machinery, same lesson: know which claim route and which clock you are on.
What not to over-read
- Facts still drive the outcome. Candy does not abolish Case A, Case C, or the need for a properly framed overpayment claim. Warner shows how quickly a late relief story fails without them.
- Amounts are case-specific. Use the decision for principle, not as a template quantum for your own site.
- Primary compliance still wins. The cheapest refund is the one claimed by amending the return inside 12 months. Overpayment relief is the safety net, not the operating model.
Bottom line
The Upper Tribunal has confirmed that section 44(9)’s “must amend” wording does not shut the door on paragraph 34 overpayment relief when a substantially performed land contract is later not carried into effect and the amendment window has closed. Candy is the backstop case. Warner is the limit case. Together they tell finance teams exactly where late SDLT recovery is real — and where it is not.
If you have development SPVs, prepaid SDLT on uncompleted contracts, or deal files that went quiet after novation, run the four-year inventory now. Cash, controls and clean DD — that is the CFO cut.
Sources: UT Candy decision page; UT Candy PDF; Find Case Law Candy; FTT Candy; CA Candy 2022; UT Warner; Claritax on Warner; KPMG overpayment note; FA 2003 s.44; FA 2003 Sch 10; SDLTM50300; Direct Debit consultation; ITSA timely payments consultation; UT decisions index.