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    • laurab2806
    • By laurab2806 2nd Oct 17, 2:31 PM
    • 6Posts
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    laurab2806
    Stamp Duty Query
    • #1
    • 2nd Oct 17, 2:31 PM
    Stamp Duty Query 2nd Oct 17 at 2:31 PM
    Hi,

    I'm a bit confused with Stamp Duty! I've rang HMRC for advice and they have referred me to this guide:

    gov.uk/government/uploads/system/uploads/attachment_data/file/570876/SDLT_Higher_rates_for_additional_properties.pdf

    I own a property which I rent out, and myself and my husband live in a house which is solely in my husband's name. My husband owns just the 1 property.

    We are wanting to sell our home (the property in my husband's name), and then purchase a new home in joint names. I intend to keep my own property and continue to rent it out.

    On the guide that HMRC have told me to look at, it has the following example on page 33:

    Example 1
    Mr and Mrs S, a married couple, each own a residential property, with neither having any
    interest in the otherís property. They both live in the property owned by Mrs S: the
    property owned by Mr S is rented out. Mrs S is selling her property and they are jointly
    purchasing a new one, which will be their new main residence. Mr S will retain his rented
    out property.
    The higher rates will not apply to the joint purchase by Mr and Mrs S of a new main
    residence. As they are married and have both lived in the property owned by Mrs S as their
    main residence they will both be treated as replacing their main residence.


    Will we definitely not have to pay the higher rate Stamp Duty based on that example? I've been doing some reading on it and other information reads as though we would have to pay the higher rate. We don't want to start the moving process to find that we have to as it is almost £9k!

    Thanks in advance
    Laura
Page 1
    • Pixie5740
    • By Pixie5740 2nd Oct 17, 2:34 PM
    • 11,202 Posts
    • 15,655 Thanks
    Pixie5740
    • #2
    • 2nd Oct 17, 2:34 PM
    • #2
    • 2nd Oct 17, 2:34 PM
    What other information have you found? Something else from HMRC? That example is from the official guidance note, go with it.
    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.
    • saajan_12
    • By saajan_12 2nd Oct 17, 2:37 PM
    • 1,010 Posts
    • 678 Thanks
    saajan_12
    • #3
    • 2nd Oct 17, 2:37 PM
    • #3
    • 2nd Oct 17, 2:37 PM
    Yes, higher rate stamp duty is NOT due -- as a married couple all your residential properties are treated as being owned by the unit. The unit is replacing the current main residence with a new one (and selling the old one). No higher rate due.

    Surely you could have worked out that the example describes your exact situation.
    • laurab2806
    • By laurab2806 2nd Oct 17, 2:44 PM
    • 6 Posts
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    laurab2806
    • #4
    • 2nd Oct 17, 2:44 PM
    • #4
    • 2nd Oct 17, 2:44 PM
    What other information have you found? Something else from HMRC? That example is from the official guidance note, go with it.
    Originally posted by Pixie5740
    Thanks for your response!

    Well I checked with the Money Advice Service and they said that we'd have to pay the higher rate, and then I saw this on the Gov.uk website:

    2.4 Married couples and civil partners
    Married couples and civil partners who own one property at the end of the day of a transaction will not pay the higher rates of SDLT. However, if either of them owns more than one residential property they may pay the higher rates when purchasing another property.

    The government will treat married couples and civil partners living together as one unit. This is consistent with other areas of the tax system including Capital Gains Tax private residence relief where married couples are entitled to relief on one residence between them.

    This means that:

    married couples and civil partners may own one main residence between them at any one time for the purposes of the higher rates
    property owned by either partner (and any minor children) will be relevant when determining if an additional property is being purchased or not. Therefore, an individual buying a property may be liable for the higher rates if his or her spouse or civil partner has an existing residential property. If the spouse or civil partner then sells that residential property they may be able to claim a refund.


    It's just a daunting amount of money to risk having to pay with just one example to go off!
    • Pixie5740
    • By Pixie5740 2nd Oct 17, 2:49 PM
    • 11,202 Posts
    • 15,655 Thanks
    Pixie5740
    • #5
    • 2nd Oct 17, 2:49 PM
    • #5
    • 2nd Oct 17, 2:49 PM
    The one correct example being from the official guidance note which also includes the rules for implementing the higher rate of SDLT?

    You'll also note that from what you've copied and pasted from gov.uk it says that married couples may have to pay the higher rate not that they will have to pay it.
    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.
    • kingstreet
    • By kingstreet 2nd Oct 17, 2:55 PM
    • 32,405 Posts
    • 17,398 Thanks
    kingstreet
    • #6
    • 2nd Oct 17, 2:55 PM
    • #6
    • 2nd Oct 17, 2:55 PM
    The married couple unit currently owns two properties.

    After completion, it will still own two properties.

    The surcharge does not apply.
    I am a mortgage broker. You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice. Please do not send PMs asking for one-to-one-advice, or representation.
    • laurab2806
    • By laurab2806 2nd Oct 17, 3:18 PM
    • 6 Posts
    • 0 Thanks
    laurab2806
    • #7
    • 2nd Oct 17, 3:18 PM
    • #7
    • 2nd Oct 17, 3:18 PM
    Thank you very much for all of your replies, I really appreciate it, it's put my mind at rest!!
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