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  • FIRST POST
    • jakieahmed
    • By jakieahmed 16th Jul 17, 6:28 PM
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    jakieahmed
    High Rate stamp duty?
    • #1
    • 16th Jul 17, 6:28 PM
    High Rate stamp duty? 16th Jul 17 at 6:28 PM
    Many thanks in advance for reading this. My situation is:
    I have 2 properties (say property A and property B).

    I had property B since Sep 2015 and have lived in property B since then. All my credit related documents ie bank statement, council tax, utility bill account holder, voting and even driving license is registered to property A.
    Property A has tenants for over 2 years now, however, they do not mind me having all those documents in my name.

    In property B, I have been living there, however, I do not have anything in my name except council tax and old pay as you go meter utility bill. Earlier in June, I have sold property B as I did not like the area and now actively looking to buy another property as a replacement of the main residence.

    I am now living elsewhere at my parent's council flat due to the recent sale.

    My question is that, although I do not live in property A and I do not have much to show proof that I lived in property B, would I still be exempted from the higher stamp duty?


    This maybe out of hand question but I thought I will ask:
    Once the conveyancer fills up the Stamp Duty form and sends it to HMRC, would they assess the form and ask if anything required there and then. Or is it more of audit based and I could one day get a letter from HMRC asking for relevant documents if required?

    PS: All properties are in England
    Last edited by jakieahmed; 16-07-2017 at 6:31 PM.
Page 1
    • Pixie5740
    • By Pixie5740 16th Jul 17, 6:37 PM
    • 11,103 Posts
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    Pixie5740
    • #2
    • 16th Jul 17, 6:37 PM
    • #2
    • 16th Jul 17, 6:37 PM
    https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/570876/SDLT_Higher_rates_for_additional_properties.pdf
    Annual income twenty pounds, annual expenditure nineteen pounds nineteen and six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds nought and six, result misery.
    • jakieahmed
    • By jakieahmed 16th Jul 17, 6:41 PM
    • 13 Posts
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    jakieahmed
    • #3
    • 16th Jul 17, 6:41 PM
    • #3
    • 16th Jul 17, 6:41 PM
    gov.uk/government/uploads/system/uploads/attachment_data/file/570876/SDLT_Higher_rates_for_additional_properties.pdf
    Originally posted by Pixie5740
    Yes I have read on this from section 3.30 to 3.35 but not sure if my question has been answered
    • Pixie5740
    • By Pixie5740 16th Jul 17, 6:54 PM
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    Pixie5740
    • #4
    • 16th Jul 17, 6:54 PM
    • #4
    • 16th Jul 17, 6:54 PM
    Try reading the whole thing. You might want to pay particular attention to the final chapters of Q and A.
    Annual income twenty pounds, annual expenditure nineteen pounds nineteen and six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds nought and six, result misery.
    • jakieahmed
    • By jakieahmed 16th Jul 17, 7:05 PM
    • 13 Posts
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    jakieahmed
    • #5
    • 16th Jul 17, 7:05 PM
    • #5
    • 16th Jul 17, 7:05 PM
    Try reading the whole thing. You might want to pay particular attention to the final chapters of Q and A.
    Originally posted by Pixie5740
    Thanks, and I did check the Questions and the Examples. No luck
    • 00ec25
    • By 00ec25 16th Jul 17, 7:35 PM
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    00ec25
    • #6
    • 16th Jul 17, 7:35 PM
    • #6
    • 16th Jul 17, 7:35 PM
    the question of which is the main residence stems from Capital Gains tax case law and is based on the "matter of facts" and is heavily influenced by "degree of permanence, continuity or expectation of continuity."

    B was your home, but on paper you cannot prove it, although very obviously the fact that A is tenanted would instantly show continuity of occupation of A is impossible since it is not your home, it is the tenants.

    of course the problem will be if you kept all your paperwork at A in order to facilitate income tax fraud in respect of claiming they are lodgers, not tenants, and therefore you were claiming the rent a room allowance. if on the other hand you have declared your rental income correctly, then you should have no problem at all if challenged by HMRC showing that A was not your home despite your administrative laxity over personal paperwork.
    • jakieahmed
    • By jakieahmed 16th Jul 17, 7:42 PM
    • 13 Posts
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    jakieahmed
    • #7
    • 16th Jul 17, 7:42 PM
    • #7
    • 16th Jul 17, 7:42 PM
    the question of which is the main residence stems from Capital Gains tax case law and is based on the "matter of facts" and is heavily influenced by "degree of permanence, continuity or expectation of continuity."

    B was your home, but on paper you cannot prove it, although very obviously the fact that A is tenanted would instantly show continuity of occupation of A is impossible since it is not your home, it is the tenants.

    of course the problem will be if you kept all your paperwork at A in order to facilitate income tax fraud in respect of claiming they are lodgers, not tenants, and therefore you were claiming the rent a room allowance. if on the other hand you have declared your rental income correctly, then you should have no problem at all if challenged by HMRC showing that A was not your home despite your administrative laxity over personal paperwork.
    Originally posted by 00ec25
    Thanks, but it does not answer my question. You have re-instantiated my situation in different words.
    • mrginge
    • By mrginge 16th Jul 17, 7:48 PM
    • 4,263 Posts
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    mrginge
    • #8
    • 16th Jul 17, 7:48 PM
    • #8
    • 16th Jul 17, 7:48 PM
    Thanks, but it does not answer my question. You have re-instantiated my situation in different words.
    Originally posted by jakieahmed
    The question you need to answer is simple. Have you declared to hmrc that property A is tenanted and declared the appropriate rental income?
    • Pixie5740
    • By Pixie5740 16th Jul 17, 7:50 PM
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    Pixie5740
    • #9
    • 16th Jul 17, 7:50 PM
    • #9
    • 16th Jul 17, 7:50 PM
    Thanks, and I did check the Questions and the Examples. No luck
    Originally posted by jakieahmed
    That's funny because I can see a couple of examples in the Q & A about moving out your main residence, selling it and then buying a new main residence.

    Why is most of your paper work going to property A when it is tenanted and therefore cannot be your main residence?
    Annual income twenty pounds, annual expenditure nineteen pounds nineteen and six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds nought and six, result misery.
    • jakieahmed
    • By jakieahmed 16th Jul 17, 8:04 PM
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    jakieahmed
    That's funny because I can see a couple of examples in the Q & A about moving out your main residence, selling it and then buying a new main residence.

    Why is most of your paper work going to property A when it is tenanted and therefore cannot be your main residence?
    Originally posted by Pixie5740
    Moving and selling applies to my situation, however, I was concerned/worried about showing proof of living there.

    Unfortunately, it was my laziness lead to not changing address, which now could cost.
    • G_M
    • By G_M 16th Jul 17, 8:13 PM
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    G_M
    I really don't understand your problem, unless as others have suggested you are not dealing properly with your rental.

    Property B is your main home.
    You sell it, and replace it with Property C
    Property A is let, and remains unchanged.
    Higher rate SDLT is not charged.

    The only potential issues you face are if your mortgage lender and /or freeholder for property A don't know, and approve of, your letting. Or if you are failing to declare the rent to HMRC. Perhaps you are concerned that these facts might come to the attention of the relevant bodies if you have to prove that property A is let?
    • jakieahmed
    • By jakieahmed 16th Jul 17, 8:32 PM
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    jakieahmed
    I really don't understand your problem, unless as others have suggested you are not dealing properly with your rental.

    Property B is your main home.
    You sell it, and replace it with Property C
    Property A is let, and remains unchanged.
    Higher rate SDLT is not charged.

    The only potential issues you face are if your mortgage lender and /or freeholder for property A don't know, and approve of, your letting. Or if you are failing to declare the rent to HMRC. Perhaps you are concerned that these facts might come to the attention of the relevant bodies if you have to prove that property A is let?
    Originally posted by G_M
    My potential issue is that given the stamp duty form has been filled up by the solicitor and if hmrc does inquiry, it will clearly state that my voting place is property A and so as bank bodies etc. This could potentially mean im not replacing my main home.

    Also, the mortgage for property A has given the approval to rent.
    • G_M
    • By G_M 16th Jul 17, 9:05 PM
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    G_M
    My potential issue is that given the stamp duty form has been filled up by the solicitor and if hmrc does inquiry, it will clearly state that my voting place is property A and so as bank bodies etc. This could potentially mean im not replacing my main home.

    Also, the mortgage for property A has given the approval to rent.
    Originally posted by jakieahmed
    Then either

    a) fill in the SDLT form yourself or
    b) instruct your solicitor what else to put in the form

    If HMRC enuire further, show them the tenancy agreement etc and it will be clear property A was not your main residence.
    • 00ec25
    • By 00ec25 16th Jul 17, 10:31 PM
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    00ec25
    Thanks, but it does not answer my question. You have re-instantiated my situation in different words.
    Originally posted by jakieahmed
    eh? I presume you mean restated. Au contraire, it answers your question perfectly

    Q: can I claim B was the main residence and therefore claim it is being replaced with C?
    Answer: yes, rationale for answer - see previous post

    Q: upon replacement of a main residence am i exempted from higher rate SDLT?
    Answer: yes (subject to the timing explained in the guide)

    (or should I assume you are in fact undertaking tax fraud with respect to A, and hence your reticence at being asked to prove it?)
    Last edited by 00ec25; 16-07-2017 at 10:37 PM.
    • jakieahmed
    • By jakieahmed 16th Jul 17, 10:39 PM
    • 13 Posts
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    jakieahmed
    Then either

    a) fill in the SDLT form yourself or
    b) instruct your solicitor what else to put in the form

    If HMRC enquire further, show them the tenancy agreement etc and it will be clear property A was not your main residence.
    Originally posted by G_M
    thanks, sounds like a good idea!
    • jakieahmed
    • By jakieahmed 16th Jul 17, 10:42 PM
    • 13 Posts
    • 0 Thanks
    jakieahmed
    eh? I presume you mean restated. Au contraire, it answers your question perfectly

    Q: can I claim B was the main residence and therefore claim it is being replaced with C?
    Answer: yes, rationale for answer - see previous post

    Q: upon replacement of a main residence am i exempted from higher rate SDLT?
    Answer: yes (subject to the timing explained in the guide)

    (or should I assume you are in fact undertaking tax fraud with respect to A, and hence your reticence at being asked to prove it?)
    Originally posted by 00ec25
    Please stop jumping to conclusion. I did not say I'm not paying my taxes nor did I ask if there is a way to do tax fraud.

    My question was seeing as I made a mistake of not transferring post, voting paper etc would I still be able to fight my case if I need to, which someone suggested in the message above that I can show tenancy agreements etc.

    I was more concerned with the fact that it is "factual", which means if HMRC does a simple credit check, would show I'm registered in property A.

    Paying taxes for a property does not mean my main residence is still property B. I could still have tenants/lodger and live there and pay my taxes.
    Last edited by jakieahmed; 16-07-2017 at 10:47 PM.
    • 00ec25
    • By 00ec25 16th Jul 17, 10:59 PM
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    00ec25
    Paying taxes for a property does not mean my main residence is still property B. I could still have tenants/lodger and live there and pay my taxes.
    Originally posted by jakieahmed
    please carefully read what I wrote. I specifically said claiming the rent a room allowance. I did not say not "paying taxes"

    I have given you the actual reason why you can categorically claim B as a main residence despite the paperwork issue.

    I will post one link since you seem to be confused/doubtful. The rest you can find yourself.
    https://www.taxinsider.co.uk/1222-Private_Residence_Relief_Is_It_A_Residence.html
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