View on Main residence definition for secondary stamp duty

suburbankid

Hi,

We recently sold our main residence, with a view to purchashing a new build to replace this main residence.

My partner already owns a BTL property, which has been rented out for years. While ours was for sale, her tenants gave notice. We did not relet the property, as it gave us somewhere to live while our new main residence was being built. We knew it wouldnt be built until Dec / January.

Our main residence sold a few weeks ago, and we are living in my partners BTL temporarily.

We also need to exchange on this new build in the next 2 weeks.

The issue we face is the defenition of main residence.

I have spoken to the HMRC on several occassions, and they have advised that we are not liable for the 3% as we are replacing our main residence. However, my solicitor is advising that my partners rental is effectively our main residence for the next 4 months - ie bills, doctors, driving licence etc go to this address temporarily. I have queried this with the HMRC, but they wont give me a clear answer.. They advise me to look at their website for a main residence definition... but thats no use, as its open to interpretation.

I have written to them to try and clarify, but was told there is a 10 week delay for responses !


Has anybody has a similar experience.

thanks

Cornucopia

Wouldn't you always have been liable for 2nd Home Stamp Duty based on the ownership of the BTL as long as you owned two properties after the completion on your new main home?

Or have I misunderstood your scenario?

AdrianC

Will you be selling the BtL after you've moved?

suburbankid

Hi,

There is no additional stamp duty if you are replacing your main residence.

I am replacing my main residence..

This is from the HMRC guidance, which is a simialar scenario.. The main issue i have is that we are temporarily living in my partners house.. And the HMRC are being helpful when it comes to defining if that is classed as a main residance. They advised to write a letter and wait for the reply from the Adudicator

Q
12.
I am currently living in rented accommodation, having sold my previous main residence nearly 18 months ago. I am now looking to purchase a new main residence within the next few months. I also have a number of buy to let properties. Will I have to pay the higher rates on the purchase of my new main residence?

12
.
Provided you purchase your new main residence within 3 years of the sale of your previous main residence, you are considered to be replacing your main residence, and therefore the higher rates will not apply.

suburbankid

No,

we wont be selling the BTL..

We sold our "main residence", where we lived for 5 years... To purchase a new main residence.. Unfortunely the build wasnt complete when we sold ours.

Cornucopia

Ah, I wasn't aware of that exemption, although it sounds perfectly sensible.

In some aspects of tax regulations, "Main Residence" is simply a choice made by the taxpayer. That choice is known as an election. Assuming that "Main Residence" in this case is either a free choice, or determined by common sense facts, then it sounds as though you should be okay.

ReadingTim

I would have thought that you can only nominate a "Main Residence" when you have more than one residence to nominate....which you currently don't - your previous BTL is now your main residence on account of it being your sole residence! The other quoted examples talk about moving into rented, which isn't the case here

However, there may be mitigating factors which mean you don't have to pay the additional rate, but you should either write off to HMRC and await their clarification or get independent tax advice - this can't be too uncommon a question.

Unfortunately, the additional rate was aimed at exactly that: discouraging 2nd home ownership & BTL-ing, therefore I wouldn't be surprised if the taxman wasn't very sympathetic to your plight, especially in these times of austerity!

Grenage

As far as I am aware, that's not how it works. If you buy an additional home, and aren't selling your prior home, you will have to pay the extra 3%.

It applies to additional homes; you would be buying an additional home, and so the 3% would apply.

suburbankid

thanks for the replies..

I will purchase the property on my own..

But i will update his thread in a few weeks, once HMRC come back to me - just to clarify for anybody else in this position..

cheers