Stamp Duty Calculator and Q&A discussion

GDB2222

Halseyhalsey2020 said:

Hi,
I have purchased a house for £ 205000 (cash buyer) - so no mortgage and signed contract 7.8.2020 - but I've been told that I still need to pay the stamp duty, is that correct. I believe that purchases under £250000 are extempt to pay the duty??  what can I do if they take the stamp duty payment regardless??
Thanks!

Who is 'they'? Your solicitor? 

KarenStudent

Hello,  we moved home just under 2 years ago, and re-mortgaged our previous property on a buy-to-let.  My solicitor insisted that we had to pay just over £4k for LTT, however, our new home was £136,000 and the buy-to-let mortgage was £95,000.  Looking at the calculator, I think we should have only paid £2850 (3% of the 95k) - am I correct, or am I looking at it the wrong way?  

Slithery

KarenStudent said:

Hello,  we moved home just under 2 years ago, and re-mortgaged our previous property on a buy-to-let.  My solicitor insisted that we had to pay just over £4k for LTT, however, our new home was £136,000 and the buy-to-let mortgage was £95,000.  Looking at the calculator, I think we should have only paid £2850 (3% of the 95k) - am I correct, or am I looking at it the wrong way?  

The amount of your mortgage is irrelevant.

£136,000 * 3%  = £4,080

'Just over £4k' would appear to be the correct answer...

CP1534

I’m so angry.
I’ve just left the Army and have owned a property since 2007. My husband of 2 years also has a property which he rents out. Due to the requirements of service life, we have been posted to numerous locations all over the world and when serving in the UK, we have never been within a 50 mile radius of either house that would allow us to live there on a permanent basis. My property has been rented out intermittently since 2007 but in more recent years I have maintained it to a standard to move in to once my service ended. Having secured a new role in the South, We decided to sell my northern home to purchase a new property for the family to live in as I leave the service, prompted by the Stamp Duty tax break. We are 3 weeks from completing and I have just been informed by my solicitor that I have to pay a 3% surcharge as the property I am selling has not been classed as our main residence as we have not lived in it within the past 3 years! I feel sick ... and totally disappointed. 
I have seen that there has been a number of consultations regarding this topic and Armed Forces personnel being disadvantaged when purchasing a second property. Does anyone know if there is somewhere I can add my complaint ? Or whether there has been any updates on this issue since Jan 20? 

 

[Deleted User]

CP1534 said:

I’m so angry.
I’ve just left the Army and have owned a property since 2007. My husband of 2 years also has a property which he rents out. Due to the requirements of service life, we have been posted to numerous locations all over the world and when serving in the UK, we have never been within a 50 mile radius of either house that would allow us to live there on a permanent basis. My property has been rented out intermittently since 2007 but in more recent years I have maintained it to a standard to move in to once my service ended. Having secured a new role in the South, We decided to sell my northern home to purchase a new property for the family to live in as I leave the service, prompted by the Stamp Duty tax break. We are 3 weeks from completing and I have just been informed by my solicitor that I have to pay a 3% surcharge as the property I am selling has not been classed as our main residence as we have not lived in it within the past 3 years! I feel sick ... and totally disappointed. 
I have seen that there has been a number of consultations regarding this topic and Armed Forces personnel being disadvantaged when purchasing a second property. Does anyone know if there is somewhere I can add my complaint ? Or whether there has been any updates on this issue since Jan 20? 

 

I'm not sure your solicitor is correct on this one as there are concessions for those in the armed forces.  

https://www.gov.uk/hmrc-internal-manuals/stamp-duty-land-tax-manual/sdltm09530

oldbikebloke

Lover_of_Lycra said:

 

I'm not sure your solicitor is correct on this one as there are concessions for those in the armed forces.  

https://www.gov.uk/hmrc-internal-manuals/stamp-duty-land-tax-manual/sdltm09530

I'm afraid you have missed the context of that link, it refers to purchases by non natural persons. Non natural person means a "body corporate" ie: company or an institution (eg school) https://www.gov.uk/hmrc-internal-manuals/stamp-duty-land-tax-manual/sdltm09510

It is not dealing with the Op's context of a property purchase by living person(s)

SDLT_Geek

Unfortunately your solicitor is correct, if your husband still owns the property he rents out when you buy a home, the extra 3% will apply (assuming you are not saved by the "under £40,000 rule").  The link posted by Lover of Lycra mentions "residential accommodation for members of the armed forces", but that is for buildings already in use for armed forces, such as barracks buildings.  
Continued representations to change the rules have been rebuffed, including those made on the back of the proposed 2% surcharge for non-UK residents where an exemption is proposed for Crown employees who have been overseas.
I expect you have seen the piece here: https://www.blakemorgan.co.uk/stamp-duty-land-tax-3-surcharge-armed-forces-covenant/ 

You could contact:
1. The Armed Forces Covenant Team at Ministry of Defence, Level 6, Zone A, MoD Main Building, Whitehall, London SW1A 2HB.  Cdr Bill Lauste RN replied from there earlier in the year.
2.  Your MP.
3.  Johnny Mercer (Minister for Defence People and Veterans in the Ministry of Defence and Minister for Veterans’ Affairs in the Cabinet Office).
4.  "Defence People Secretariat" at Ministry of Defence, Main Building (06/N/00) Whitehall London SW1A 2HB who answer correspondence addressed to Johnny Mercer on the subject.  
5. The Correspondence & Enquiry Unit at HM Treasury, 1 Horse Guards Road, London SW1A 2HQ who claim the Government "keeps all taxes under constant review" and says "we are committed to ensuring the tax system supports the Government's commitment to the Armed Forces Covenant".
6.  Army Families Federation Housing Specialist at housing@aff.org.uk (it was Cat Calder).
7. Office for Veterans' Affairs at veterans@cabinetoffice.gov.uk.
8.  Rt Hon Anne-Marie Trevelyan who had raised the issue in the House of Commons on 26 June 2019.

GDB2222

I’m a bit lost. The OP and her husband own two properties that are let out. They are selling one to buy this new home, so the 3% surcharge applies. If they sold both let properties, there’d be no stamp duty. Their choice, I’d have thought. 

Is CGT an issue?

SDLT_Geek

GDB2222 said:

I’m a bit lost. The OP and her husband own two properties that are let out. They are selling one to buy this new home, so the 3% surcharge applies. If they sold both let properties, there’d be no stamp duty. Their choice, I’d have thought. 

There is an argument that under the Armed Forces Covenant there should be special treatment for services personnel who are disadvantaged (as against the general population) by not having been able to live in properties they own, due to their service to the country.  This is to be recognised for the design of the 2% surcharge for non-UK residents.

oldbikebloke

GDB2222 said:

Is CGT an issue?

no for her, subject to the time scale OP indicates re her own property that is 3 weeks from completion
although it appears she has never physically lived in it as the main residence, she was armed forces and therefore, as the property was purchased with the intent that it would, at a future date, be her (/their) main home, she is given full private residence relief for the entire ownership period on that property by virtue of the being required to live in work related accommodation rule, so gets the final period of 9 months extension irrespective of the fact she is now ex forces.
Whilst the additional rate SDLT has not yet been "adjusted" for the military covenant, the CGT position is cut and dried, forces personnel get CGT relief in the circumstances I outline above 

Husband's position would need further examination given her property is to be treated as the main residence and they are married, so are entitled to only one main residence property relief between the pair of them