SDLT Have read the rules but still unsure.

debbiejt

Please can anybody help me with the following potential scenario. I have read the rules but can't figure out with our current situation. This is my first post so please be nice:) Thank you in advance.

Wife owns property that was bought long before she met husband. Property is currently let out.

Husband and wife currently live in rented accommodation provided by employer.

Husband looking to buy property as first time buyer. He will be sole owner and obtaining mortgage. Property to be refurbished and moved into when they have to leave his employer provided accommodation.

Will he be liable for higher SDLT?

Thank you.

sheramber

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/509184/GuidanceNote_Final.pdf

section 3.45

sheramber

That is not how I read it

Where an individual with a spouse or civil partner purchases an interest in a
dwelling and their spouse or civil partner is not a joint purchaser, the spouse or
civil partner will be treated as a joint purchaser in respect of the transaction38.
3.45 This means that where a purchaser is married or in a civil partnership, if
Conditions A to D are met by either spouse or civil partner, the transaction will
be a higher rates transaction.

DavidT67

debbiejt wrote: »

Please can anybody help me with the following potential scenario. I have read the rules but can't figure out with our current situation. This is my first post so please be nice:) Thank you in advance.

Wife owns property that was bought long before she met husband. Property is currently let out.

Husband and wife currently live in rented accommodation provided by employer.

Husband looking to buy property as first time buyer. He will be sole owner and obtaining mortgage. Property to be refurbished and moved into when they have to leave his employer provided accommodation.

Will he be liable for higher SDLT?

Thank you.

The second property stamp duty legislation treats married couples as an indivisible unit, unlike most other tax legislation.

Google "Cupid Tax" for detailed explanations as to why you are caught.

Sorry, but we're in the same boat as well :-(

DavidT67

As the rules currently stand, you will have to pay the extra 3%, then IF wife sells her property within 3yrs you can reclaim it.
Otherwise wife will need to first sell her property prior to your completing on your main residence purchase.

teneighty

Could the new purchase be declared as their main residence?

Wont that remove the higher rate stamp duty. I'm still trying to get my head around the new rules so probably completely wrong.

kingstreet

The unit owns one property. From completion it will own two.

The surcharge is therefore payable.

If main residence was being sold and we would go from two now to two after, it wouldn't.

G_M

DavidT67 wrote: »

As the rules currently stand, you will have to pay the extra 3%, then IF wife sells her property within 3yrs you can reclaim it.
.

Does that not only apply if the property being sold within 3 years is a main home?

In this case, it is let out.

DavidT67

Good question. The Gov UK guidance includes the word MAY twice in one paragraph !

"If you’re married or in a civil partnership, buying a property and your spouse or civil partner already owns a property you may still be liable to the higher rates. But you may be able claim a refund if they then go on to sell it."

From what I can tell the actual legislation treats "home" and "residence" as interchangeable with "you or your spouse own a residential property". It's not where you actually live or have lived, it's what you or your spouse own or have owned.

There is no blanket exemption for "main residences", it's all down to the net increase or decrease in the number of properties the now indivisible married couple own at the end of the day!

Fingers crossed the new PM, Chancellor and Government rewrite this legislation in short order...

pinkteapot

Sounds like you could avoid the extra SDLT by getting divorced but continuing to live together as normal. And I thought this government was pro marriage.

HappyMJ

pinkteapot wrote: »

Sounds like you could avoid the extra SDLT by getting divorced but continuing to live together as normal. And I thought this government was pro marriage.

You don't even need to get divorced. That can take several years if one party does not agree.

All you've got to do is separate which the OP could do on the day they buy the property and just one partner moves in to the new property whilst the other partner remains in the employer provided rental accommodation.

A couple of years later they could move in together without ever having got divorced.