3 years stamp duty refund ?

Pixie5740

Jonathanmerrett wrote: »

Hi there,

I've read all the government blurb that I can find but can't find the answer to this one;

If I fail to sell my initial main residence in the 3 years after the purchase of the new main residence, can I choose to sell the new main residence instead and still receive the refund?
I've got a few years yet but just want to know if things get desperate if I could consider putting both on the market and see which one sells first.

Any advice or thoughts on where else to look/ask would be gratefully received.

Thanks

No, it doesn't work like that. You need to sell your old main residence within 3 years of purchasing a new main residence in order to qualify for the refund.

saajan_12

Jonathanmerrett wrote: »

Hi there,

I've read all the government blurb that I can find but can't find the answer to this one;- really? It gives countless examples and clearly states it is about selling one and buying ANOTHER.

If I fail to sell my initial main residence in the 3 years after the purchase of the new main residence, can I choose to sell the new main residence instead and still receive the refund?- no, that's essentially buying and selling within 3 years. The point is if you sell your MAIN residence and buy ANOTHER house to be your new main residence, the transacitons may overlap by upto 3 years.

Rather than asking about a series of scenarios, post the background of dates when you lived in the old / new place, when it was let, when new was purchased etc.

Jonathanmerrett

saajan_12 wrote: »

Rather than asking about a series of scenarios, post the background of dates when you lived in the old / new place, when it was let, when new was purchased etc.

Yes really. At no point do any of the examples cover this scenario. All they mention is whether you are replacing your main residence. Arguably if I buy property 2 to replace property 1 and make that my main residence, then fail to sell the property 1 so sell property 2 and move back in to property 1, I have again "replaced my main residence" and therefore *could* be eligible for a refund of the additional SDLT. I'm obviously not saying one way or another whether it would wash with HMRC, hence the post. HMRC haven't been particularly helpful on the phone, just refer to the original 36 page document and say to write in to ask any further questions, which I have done but am yet to receive a reply.

Thanks for taking the time to reply though.

Jonathanmerrett

Has anyone else considered buying a very cheap second property and making that their main residence, before then selling this and replacing it with a much more expensive main residence? This seems like it would be a way of vastly reducing the additional SDLT charge applicable if you have the flexibility to reside in the cheaper property for long enough to class it as your main residence. Possibly a good option for those looking to keep their existing property as a buy-to-let property.

Victor_the_Gink

Jonathanmerrett wrote: »

Has anyone else considered buying a very cheap second property and making that their main residence, before then selling this and replacing it with a much more expensive main residence? This seems like it would be a way of vastly reducing the additional SDLT charge applicable if you have the flexibility to reside in the cheaper property for long enough to class it as your main residence. Possibly a good option for those looking to keep their existing property as a buy-to-let property.

Not a good option. By definition, what you are doing has no permanence - you have yourself admitted that it is just a ruse to avoid tax. There is plenty of case law where people have lived, full time, in a property for 8 months or more, but HMRC have successfully proved that the arrangement had no permanence, and as such should not be allowable.


http://www.accountingweb.co.uk/tax/personal-tax/principal-private-residence-relief-is-not-automatic

davidmcn

Jonathanmerrett wrote: »

Arguably if I buy property 2 to replace property 1 and make that my main residence, then fail to sell the property 1 so sell property 2 and move back in to property 1, I have again "replaced my main residence" and therefore *could* be eligible for a refund of the additional SDLT.

Really not sure how you've come up with this argument.
You can only claim a refund of the SDLT on property 2 on the basis that you've sold property 1. You can't claim a refund of the SDLT on property 2 on the basis that you've sold property 2.

Jonathanmerrett

What about 8 years? And tax avoidance is legal isn't it? Ruse or no ruse.

Victor_the_Gink

Jonathanmerrett wrote: »

What about 8 years? And tax avoidance is legal isn't it? Ruse or no ruse.

You would buy a cheap residence and live in it for 8 years to avoid tax?