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  • FIRST POST
    • munch1
    • By munch1 13th Oct 16, 6:14 PM
    • 1Posts
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    munch1
    Minimising SDLT and capital gains
    • #1
    • 13th Oct 16, 6:14 PM
    Minimising SDLT and capital gains 13th Oct 16 at 6:14 PM
    I currently own 1 house (PROPERTY#1) worth ~£400k and am in the process of buying a second property (PROPERTY#2) for ~£250k. I exchanged on PROPERTY#2 before autumn '15 budget (bought off-plan), so won't be liable for additional 3% SDLT.

    I am currently in the process of selling PROPERTY#1 with the intention of replacing it with another similar value property (PROPERTY#3) early next year.

    I would like to keep PROPERTY#2 as an investment and buy-to-let.

    I have the option of moving into PROPERTY#2 when PROPERTY#1 sells, but eventually will let PROPERTY#2 out.

    If I move into PROPERTY#2 and assign it as my primary residence until I find a replacement for PROPERTY #1, will I have to pay the additional 3% SDLT on PROPERTY#3?

    If I do NOT move into PROPERTY#2 and keep it as a secondary residence, my understanding is I can replace my primary residence within the next 18 months and not pay the SDLT additional 3% (in the form of a rebate). However, I will have to pay CG tax on the full gain when I come to sell PROPERTY#2 (it has already made a sizeable gain before completing purchase so I am trying to minimise this).

    Is my thinking correct? thank you in advance.

    Matt.
Page 1
    • CLAPTON
    • By CLAPTON 13th Oct 16, 6:22 PM
    • 41,656 Posts
    • 30,685 Thanks
    CLAPTON
    • #2
    • 13th Oct 16, 6:22 PM
    • #2
    • 13th Oct 16, 6:22 PM
    I currently own 1 house (PROPERTY#1) worth ~£400k and am in the process of buying a second property (PROPERTY#2) for ~£250k. I exchanged on PROPERTY#2 before autumn '15 budget (bought off-plan), so won't be liable for additional 3% SDLT.

    I am currently in the process of selling PROPERTY#1 with the intention of replacing it with another similar value property (PROPERTY#3) early next year.

    I would like to keep PROPERTY#2 as an investment and buy-to-let.


    I have the option of moving into PROPERTY#2 when PROPERTY#1 sells, but eventually will let PROPERTY#2 out.

    If I move into PROPERTY#2 and assign it as my primary residence until I find a replacement for PROPERTY #1, will I have to pay the additional 3% SDLT on PROPERTY#3?
    Originally posted by munch1
    yes you pay the tax as you will own more than one property

    If I do NOT move into PROPERTY#2 and keep it as a secondary residence, my understanding is I can replace my primary residence within the next 18 months and not pay the SDLT additional 3% (in the form of a rebate).
    you will pay the 3% as you will have two properties (being your primary residence is irrelevant

    However, I will have to pay CG tax on the full gain when I come to sell PROPERTY#2 (it has already made a sizeable gain before completing purchase so I am trying to minimise this).
    yes you will be liable to cgt
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