Stamp Duty Help please

HappyHarry

robbay wrote: »

Update: The solicitor who claims we can pay the money back has sent an email stating:


With regard to the tax (Stamp Duty) I confirm as discussed that as from 1st April this year the Inland Revenue charge an additional 3% for a second property although this is not applicable to a main residence


In your case I note instructions that you will be letting your current property and the new property will be your main residence


The additional duty should not therefore be payable


However the IR will often require the additional duty to be paid and then require you to produce evidence to reclaim the payment after completion


If instructed I will liaise with the IR and check their requirements


Please advise as after reading about this I think he is wrong.


Thanks,


Rob

Your solicitor is wrong.

See Question 1 on page 24 of the HMRC guidance notes, which mirrors your situation:

Q1. I am purchasing a new main residence but intend to retain my current main residence, convert it to a buy-to-let mortgage and rent it out. Will I have to pay the higher rates of SDLT on the purchase of my new main residence?
A1. Yes, the higher rates will apply as following the purchase you will own an additional residential property. However, if you sell your previous home within 3 years of the purchase of the new one you will be able to claim a refund from HMRC

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

Bluebirdman_of_Alcathays

Your solicitor is very wrong, and I would be a little perturbed by the sheer volume of mistakes in that email. It sounds like they are making it up as they go along, never a good characteristic in someone you are paying £xxx for qualified advice. Get rid.

GipsyHillClimber

I would agree with the rest of the posters, your solicitor obviously does not understand the changes and therefore alarm bells should be ringing as it's not the most difficult of concepts and was all over the news for about 3 months earlier this year. As others have said, get rid or you'll end up regretting it.

As an aside i would also question how wise it is to keep your old property if you're stretching yourself to buy the new one (i'm only assuming you're stretching based on the comment about just about being able to afford the 5k SDLT.) BTL properties can sometimes suck up your money for the first few months of getting all the required elements set up (gas safety checks, landlord insurance etc.). It may just be worth running all the numbers properly with a competent FA so you don't get yourself in hot water.

richard2511

Wow... that solicitor should be avoided at all costs!

csgohan4

Your solicitor basically wants your business and wasting your time and money for them to come round and say no you can't claim back your SDLT.

Cakeguts

You have to pay the extra 3% stamp duty when you buy a second property. It doesn't matter if the second property is a main residence or a buy to let if you intend to own two properties you will have to pay the extra stamp duty. You will only get a refund of the extra stamp duty if you sell one of the properties and so then only own one property within the time limit for refund of stamp duty.

kinger101

robbay wrote: »

Update: The solicitor who claims we can pay the money back has sent an email stating:


With regard to the tax (Stamp Duty) I confirm as discussed that as from 1st April this year the Inland Revenue charge an additional 3% for a second property although this is not applicable to a main residence


In your case I note instructions that you will be letting your current property and the new property will be your main residence


The additional duty should not therefore be payable


However the IR will often require the additional duty to be paid and then require you to produce evidence to reclaim the payment after completion


If instructed I will liaise with the IR and check their requirements


Please advise as after reading about this I think he is wrong.


Thanks,


Rob

Run away from this solicitor. They are an absolute moron if they cannot correctly interpret a plainly written law that has number example scenarios, and has been widely publicized.

bigfreddiel

robbay wrote: »

Hi,


Currently own a house worth £140k with £90k equity and was planning on taking £45k equity out for deposit on a second house costing £300k which would be our main residence with our old house a BTL. We knew we would have to pay £5k Stamp duty and we can just about manage this but here in lies the problem. Financial Advisor says that is all the SD to pay, spoke to Solicitor who said we would have to pay more like £14k so we spoke to a second solicitor who says we should only have to pay £5k but we might have to pay £14k and get a refund from the tax man.


As you can imagine this is all very stressful as we have had an offer accepted based on the FA advice and now this has come up.


Any help gratefully received,


Thanks,


Rob

I thought FAs where all highly qualified and regulated, or is that IFAs? Maybe you should have paid an IFA?

Cheers fj

System

Pixie5740 wrote: »

The solicitor is wrong and why is he referring to HMRC as IR? The Inland Revenue dissolved in April 2005! He sounds out of touch. Email him the links I gave you and tell the solicitor to read them.

This was my first thought as well! I don't know anyone who still refers to the inland revenue. I'd get rid of that solicitor ASAP and find someone who knows what they're talking about. I'd be tempted to put in a complaint if it was me. Who knows how many other people they've given this wrong advice to?

wesleyad

This is odd as this is exactly what happened to me last Friday. Solicitor sent out final invoice with stamp duty at old rate. I advised that we had already had a house which was BTL and so were expecting to pay the higher rate. They were convinced that we didn't need to as we were buying a main residence.

I was fretting all weekend about what to do and then Monday morning another solictor was on the case and noticed the error straight away.