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  • FIRST POST
    • danfitzjohn
    • By danfitzjohn 10th May 17, 10:57 PM
    • 22Posts
    • 2Thanks
    danfitzjohn
    Stamp duty higher rate question..
    • #1
    • 10th May 17, 10:57 PM
    Stamp duty higher rate question.. 10th May 17 at 10:57 PM
    Hi all


    We have recently repatriated back to Uk after 10 years overseas and are in the process of buying our first home and have recently been shocked to discover we are most likely going to legible for the higher rate of stamp duty..


    We have 3 buy to let properties between us both but have never lived in them or have ever had a main residence in UK.


    So given this scenario and we are buying our first 'home' in UK is it correct that yes we will have to pay the higher rate of stamp duty? What about if the properties were set up in a trust or a company?


    Thanks in advance!


    Dan
Page 1
    • anselld
    • By anselld 10th May 17, 11:02 PM
    • 5,125 Posts
    • 4,660 Thanks
    anselld
    • #2
    • 10th May 17, 11:02 PM
    • #2
    • 10th May 17, 11:02 PM
    Yes, correct.

    If the properties were already in a Trust or Company then you would be OK, but there is no way to get to that point now without incurring significantly more tax.

    You are in the process of buying your fourth residential property. That is what the tax is designed for.
    Last edited by anselld; 10-05-2017 at 11:05 PM.
    • always_sunny
    • By always_sunny 11th May 17, 9:48 AM
    • 2,817 Posts
    • 2,991 Thanks
    always_sunny
    • #3
    • 11th May 17, 9:48 AM
    • #3
    • 11th May 17, 9:48 AM
    Why don't you move in one of your properties instead?
    Expat with an EU passport
    • AdrianC
    • By AdrianC 11th May 17, 10:21 AM
    • 13,937 Posts
    • 12,336 Thanks
    AdrianC
    • #4
    • 11th May 17, 10:21 AM
    • #4
    • 11th May 17, 10:21 AM
    You currently own three properties.
    You will own four properties at the end of this.

    Why are you surprised?
    • theGrinch
    • By theGrinch 11th May 17, 6:05 PM
    • 2,743 Posts
    • 664 Thanks
    theGrinch
    • #5
    • 11th May 17, 6:05 PM
    • #5
    • 11th May 17, 6:05 PM
    The gangsters in government need an easy way to rob you on money you have already paid tax on and this is it.
    "enough is a feast"...old Buddist proverb
    • danfitzjohn
    • By danfitzjohn 17th May 17, 9:50 PM
    • 22 Posts
    • 2 Thanks
    danfitzjohn
    • #6
    • 17th May 17, 9:50 PM
    • #6
    • 17th May 17, 9:50 PM
    Thanks everyone for your input on this. I think it's ridiculous the fact I have never owned a home to live in this country, i have invested in property as buy 2 let (and already paid stamp duty) and now I come back to live and have to pay a ridiculous amount of stamp duty on my first home!


    it seems to be that if I was a landlord that had previously owned a home and sold it 3 years ago then I could pay the lower rate of stamp duty however obviously that doesn't apply to me:


    This confirms the government’s decision that “purchasers with more than one property [like you] who dispose of a main residence have 36 months [up from the 18 proposed in the consultation] to buy a new residence before the higher rates apply”. In the later HMRC guidance notes, this translates as “higher rates will apply if the dwelling being purchased is not replacing the purchaser’s only or main residence”.
    https://www.theguardian.com/money/2016/nov/03/i-am-a-landlord-buying-a-new-home-will-i-pay-extra-stamp-duty


    I am aware that my situation is probably quite unique and would like to dig a bit further as i am of the opinion that buying my first 'home' I shouldn't be penalised with higher rate of stamp duty!


    Does anyone have any ideas??


    Thanks in advance!
    • Mojisola
    • By Mojisola 17th May 17, 9:53 PM
    • 27,281 Posts
    • 69,409 Thanks
    Mojisola
    • #7
    • 17th May 17, 9:53 PM
    • #7
    • 17th May 17, 9:53 PM
    You currently own three properties.
    You will own four properties at the end of this.

    Why are you surprised?
    Originally posted by AdrianC
    I think it's ridiculous the fact I have never owned a home to live in this country, i have invested in property as buy 2 let (and already paid stamp duty) and now I come back to live and have to pay a ridiculous amount of stamp duty on my first home!
    Originally posted by danfitzjohn
    The law isn't about owning a property that you live in - it applies if you own more than one property.

    Why wouldn't it apply to you?
    • davidmcn
    • By davidmcn 17th May 17, 9:56 PM
    • 5,131 Posts
    • 4,771 Thanks
    davidmcn
    • #8
    • 17th May 17, 9:56 PM
    • #8
    • 17th May 17, 9:56 PM
    i am of the opinion that buying my first 'home' I shouldn't be penalised with higher rate of stamp duty!

    Does anyone have any ideas??
    Originally posted by danfitzjohn
    I think you should stop wasting your time and budget for the appropriate amount of tax. There aren't any cunning loopholes.
    • Cliveman Pieman
    • By Cliveman Pieman 17th May 17, 10:02 PM
    • 62 Posts
    • 118 Thanks
    Cliveman Pieman
    • #9
    • 17th May 17, 10:02 PM
    • #9
    • 17th May 17, 10:02 PM
    You must have known that each year, as the number of people in rented accommodation swell, that politicians would at some point seek to do something about it in order to win votes. They are the ultimate sycophants.

    Rather than actually relive the situation by, uh, building houses, they take the easy option and use the other tool in their fiscal arsenal - taxation.

    Your opinion that there is some loophole is incorrect. They want to hit BTL investors, that is what you are, so you are being hit. The way out is to sell your properties, or move into one of them.
    Last edited by Cliveman Pieman; 17-05-2017 at 10:33 PM.
    • 00ec25
    • By 00ec25 17th May 17, 10:31 PM
    • 3,857 Posts
    • 3,085 Thanks
    00ec25
    Does anyone have any ideas?
    Originally posted by danfitzjohn
    yes, sell your properties then you won't be buying an additional one

    your "outrage" is ridiculous considering you have been living outside of the UK, amassing wealth through buy to let, and now expect not to be taxed on it whilst living in the UK.
    • gingercordial
    • By gingercordial 17th May 17, 10:34 PM
    • 879 Posts
    • 766 Thanks
    gingercordial

    I am aware that my situation is probably quite unique and would like to dig a bit further as i am of the opinion that buying my first 'home' I shouldn't be penalised with higher rate of stamp duty!
    Originally posted by danfitzjohn
    There is no "digging" to be done here. Your case is clear cut, you'll be buying an additional property on top of your BTL portfolio and you will be paying the extra SDLT.

    I might be of the opinion that the government shouldn't penalise me with income tax. I might be of the opinion that I should be able to jump off a tall building and fly. My opinion of what should and shouldn't be the case isn't going to change the laws of tax or indeed physics.
    • AdrianC
    • By AdrianC 18th May 17, 7:54 AM
    • 13,937 Posts
    • 12,336 Thanks
    AdrianC
    Thanks everyone for your input on this. I think it's ridiculous the fact I have never owned a home to live in this country, i have invested in property as buy 2 let (and already paid stamp duty) and now I come back to live and have to pay a ridiculous amount of stamp duty on my first home!
    Originally posted by danfitzjohn
    It isn't your first property, though, is it?

    You already own a property. You COULD live in that...
    • elonii
    • By elonii 18th May 17, 10:28 AM
    • 19 Posts
    • 22 Thanks
    elonii
    Interesting. I'm in a similar situation to the OP (but living in Scotland). I'll have to look into that before I go shooting my mouth off with offers on houses.

    Not terribly interested in living in a Student flat with my children either
    • scottishblondie
    • By scottishblondie 18th May 17, 11:28 AM
    • 1,946 Posts
    • 1,227 Thanks
    scottishblondie
    Interesting. I'm in a similar situation to the OP (but living in Scotland). I'll have to look into that before I go shooting my mouth off with offers on houses.

    Not terribly interested in living in a Student flat with my children either
    Originally posted by elonii
    The rules for LBTT are the same as stamp duty south of the border. If you are not replacing your main residence (a property that you own and live in currently, and will sell to buy a new property) and own other property, you will be liable for the 3% surcharge. The only way aroud it is to sell any other properties that you own before purchasing another.
    • Doozergirl
    • By Doozergirl 18th May 17, 11:33 AM
    • 23,167 Posts
    • 65,090 Thanks
    Doozergirl
    Thanks everyone for your input on this. I think it's ridiculous the fact I have never owned a home to live in this country, i have invested in property as buy 2 let (and already paid stamp duty) and now I come back to live and have to pay a ridiculous amount of stamp duty on my first home!


    I am aware that my situation is probably quite unique and would like to dig a bit further as i am of the opinion that buying my first 'home' I shouldn't be penalised with higher rate of stamp duty!
    Originally posted by danfitzjohn
    You make it sound like investing in BTL property is doing the country a favour.

    The aim of taxing you on your main residence is essentially a way of backdating the tax on your BTLs. You will collectively own four properties. I appreciate that it isn't palatable, but your situation is not unique.

    You only avoid the tax by moving into one of your three houses or selling all of them. There is actually a choice.
    Everything that is supposed to be in heaven is already here on earth.
    • elonii
    • By elonii 18th May 17, 11:57 AM
    • 19 Posts
    • 22 Thanks
    elonii
    The rules for LBTT are the same as stamp duty south of the border. If you are not replacing your main residence (a property that you own and live in currently, and will sell to buy a new property) and own other property, you will be liable for the 3% surcharge. The only way aroud it is to sell any other properties that you own before purchasing another.
    Originally posted by scottishblondie
    Yes, just had a quick look. We have been renting since our return. I can see from the examples on the Scottish Government website that we will be liable. I'm just glad I found out before moving further along with house purchasing. I can now factor it in to my purchase and make sure we can afford it all.

    Thanks for your help.
    • slightlychilled
    • By slightlychilled 18th May 17, 12:39 PM
    • 29 Posts
    • 1 Thanks
    slightlychilled
    Maybe these links might help, it certainly seems on the face of it to be in your favour.

    http://www.telegraph.co.uk/investing/buy-to-let/the-stamp-duty-tax-loophole-that-could-save-buyers-thousands/
    "For existing property owners to be exempt, they must be buying a main residence rather than a second home or investment property and have previously owned another main residence that they sold at any time before the announcement of the stamp duty surcharge on November 26 2015.
    Anyone who fits these criteria has until November 26 2018 – three years after the announcement in last year’s Autumn Statement – to buy an additional home without paying the extra stamp duty.
    For example, a landlord who owns buy-to-let properties but currently lives in rented accommodation and sold their previous home before November 2015 can buy a new home without paying the surcharge."


    http://www.telegraph.co.uk/investing/buy-to-let/buy-to-let-stamp-duty-will-you-have-to-pay/

    "Many own their own home, plus a buy-to-let or holiday home, and want to know whether they will face the higher charge if they sell their main home and upsize, or downsize, to a new property.
    The Treasury consultation confirms they will not pay the higher charge as they will be purchasing a home, rather than a secondary property.
    This effectively means that the change will not be applied retrospectively to people who already own more than one property."
    • Crashy Time
    • By Crashy Time 18th May 17, 12:44 PM
    • 4,007 Posts
    • 1,936 Thanks
    Crashy Time
    https://www.unbiased.co.uk/news/tax/three-ways-to-cope-with-losing-buy-to-let-tax-relief
    • Mojisola
    • By Mojisola 18th May 17, 12:48 PM
    • 27,281 Posts
    • 69,409 Thanks
    Mojisola
    We have recently repatriated back to Uk after 10 years overseas and are in the process of buying our first home

    We have 3 buy to let properties between us both but have never lived in them or have ever had a main residence in UK.
    Originally posted by danfitzjohn
    Maybe these links might help, it certainly seems on the face of it to be in your favour.

    http://www.telegraph.co.uk/investing/buy-to-let/the-stamp-duty-tax-loophole-that-could-save-buyers-thousands/
    "For existing property owners to be exempt, they must be buying a main residence rather than a second home or investment property and have previously owned another main residence that they sold at any time before the announcement of the stamp duty surcharge on November 26 2015.
    Anyone who fits these criteria has until November 26 2018 – three years after the announcement in last year’s Autumn Statement – to buy an additional home without paying the extra stamp duty.
    For example, a landlord who owns buy-to-let properties but currently lives in rented accommodation and sold their previous home before November 2015 can buy a new home without paying the surcharge."


    http://www.telegraph.co.uk/investing/buy-to-let/buy-to-let-stamp-duty-will-you-have-to-pay/

    "Many own their own home, plus a buy-to-let or holiday home, and want to know whether they will face the higher charge if they sell their main home and upsize, or downsize, to a new property.
    The Treasury consultation confirms they will not pay the higher charge as they will be purchasing a home, rather than a secondary property.
    This effectively means that the change will not be applied retrospectively to people who already own more than one property."
    Originally posted by slightlychilled
    Those only apply if you are selling your own home and buying another home that you will live in.
    • Crashy Time
    • By Crashy Time 19th May 17, 1:51 PM
    • 4,007 Posts
    • 1,936 Thanks
    Crashy Time
    Interesting. I'm in a similar situation to the OP (but living in Scotland). I'll have to look into that before I go shooting my mouth off with offers on houses.

    Not terribly interested in living in a Student flat with my children either
    Originally posted by elonii

    You could always give the students notice?
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