2nd Home stamp duty advise/experience

Three_Beans

Hi helpful people!

My partner and I have just had an offer accepted on a new property - happy days!
As our current home is already mortgage free, we were planning on holding onto it and renting it out - seems to to earn more than other investment these days..

Anyway, we didnt realise the new stamp duty rules from April on 2nd homes until recently and fell off our chairs as the tax bill will jump from £3750 to £12000 on the new property :shocked:

I just wanted to check 2 things if anyone has any experience...

1) As I understand it, we have upto 3yrs where we can complete a sale of the let property and reclaim additional stamp duty - has anyone had practical experience of this and how hard/easy it has been? We are thinking hold it for 2 years and sell in 3rd year as option, or if the property is increasing in value just keep it and take the hit on the tax.

2) Moving the let property into trust - its just an open question. One of the reasons we are able to upsize our home is due to my partner inheriting her parents property and selling last year - this was held in a trust by her Father to prevent it being sold for any potential long term care. If the let property was signed over to a trust would this avoid the additional stamp duty - guessing thats already been thought of by HMRC but like I said was just a thought while brainstorming.

Thanks for any thoughts!

Bluebirdman_of_Alcathays

1 - It's not difficult, write to HMRC and ask for your money, with documentary evidence why you want it. This is a very rough average, but generally I find it takes HMRC 3-4 weeks to issue a cheque for monies owed.


https://public-online.hmrc.gov.uk/lc/content/xfaforms/profiles/forms.html?contentRoot=repository:///Applications/IndirectTax/1.0/SDLT16&template=SDLT16.xdp


2 - Since the Care Act 2014 came into being, trusts can't be used to shelter assets from assessment for care home needs. That said, plenty of people still do it, and as there has (to my knowledge) been no case law around this, it still goes on.


http://www.ageuk.org.uk/Documents/EN-GB/Factsheets/FS40_deprivation_of_assets_in_the_means_test_for_care_home_provision_fcs.pdf?dtrk=true


Back to SDLT - the guidance states that the beneficiaries of the trust are deemed to own it for SDLT purposes. If the beneficiaries are minors, the parents are deemed to be beneficiaries, and hence owners. To legitimately avoid it, you would have to find people you really trust that don't own property already!


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

Three_Beans

Thanks for the reply - really useful info :beer: