Stamp Duty - Additional Tax?

CD_2016

Hi

Can anyone help me?

I purchased a property in 2010 with my brother. He had the capital and I had the income for the mortgage. I lived in the property until May 2015, he remained at my mothers house. I then moved back to my mothers house in May 2015 when she became ill and we turned the property into a buy-to-let. Now I am in the position to buy my own property. I have put an offer in and it has been accepted. My brother has decided to buy me of my share of the original flat. When I speak to my solicitor they say I will need to pay £2075 stamp duty on my new property plus and additional, creating a total bill of nearly £9,000 as I own another property. Unfortunately it looks like the new property will complete before I sell my share of the existing to my brother due to delays in him securing a mortgage. Some people say I can claim a refund but I cannot find any example from HMRC that covers my circumstances. HMRC won't talk to me and refer me to the online statement. Tax advisers are unsure or uninterested. Does anyone have the answer? I want to find a professional who can tell me if I can or cannot get a refund on the extra owed (happy to pay!) Any help would be appreciated. Thanks!

Bluebirdman_of_Alcathays

The online guidance is very straightforward - you currently own one house, you will soon own two. You are not replacing your main residence, therefore you are liable for the additional SDLT.

You cannot get a refund, as you are not replacing your main residence - by definition the property you are selling is not your main residence as someone else is living in it.

Do you have an accountant for the BTL business? I'm sure they'd be happy to go through this with you?

saajan_12

At the time of purchase, the extra stamp duty is owed if you already own (a share of) another home*, so you will have to pay.

This can be refunded if you sell your main home within 3 years of the purchase and the new property replaces your main home. This doesn't apply to you as the property sold was a BTL and not your main home at the point of saie. Therefore no refund is due.

*There are caveats such as value of the property >40k etc but you can look these up.

CD_2016

This is what I have been reading. One Tax adviser thought that if it has been my main residence within the last 36 months and i sell it in the upcoming 36 months then a refund would apply, he was very vague! I have Googled that and can find no reference hence being on here. Never mind, I will try to delay mine going through until I sell the old property.

Cheers, Guys

Sue.Stafford

Whilst I understand the logic behind charging excess stamp duty on 2nd homes I believe it is fundamentally unfair to a group of young people who already own a house each but wish to jointly purchase a new family home.

In this case if either of them decides to keep their previous residence the new house purchase is deemed to be a 2nd home and the 3% excess stamp duty is applied. The unfair nature of this is that the new family home (worth say 300,000) attracts extra SD of £9000 whereas their original house becomes effectively a 2nd home (worth say £100,000) which should only attract excess SD of £3000.

They could have sold the 2nd property and bought back a similar one and only paid the lower figure. How is that fair ?

Guess which you have to pay.

marksoton

Sue.Stafford wrote: »

Whilst I understand the logic behind charging excess stamp duty on 2nd homes I believe it is fundamentally unfair to a group of young people who already own a house each but wish to jointly purchase a new family home.

In this case if either of them decides to keep their previous residence the new house purchase is deemed to be a 2nd home and the 3% excess stamp duty is applied. The unfair nature of this is that the new family home (worth say 300,000) attracts extra SD of £9000 whereas their original house becomes effectively a 2nd home (worth say £100,000) which should only attract excess SD of £3000.

They could have sold the 2nd property and bought back a similar one and only paid the lower figure. How is that fair ?

Guess which you have to pay.

They're running a BTL business.

They can't have their :bdaycake: and eat it.

chanz4

Sue.Stafford wrote: »

Whilst I understand the logic behind charging excess stamp duty on 2nd homes I believe it is fundamentally unfair to a group of young people who already own a house each but wish to jointly purchase a new family home.

In this case if either of them decides to keep their previous residence the new house purchase is deemed to be a 2nd home and the 3% excess stamp duty is applied. The unfair nature of this is that the new family home (worth say 300,000) attracts extra SD of £9000 whereas their original house becomes effectively a 2nd home (worth say £100,000) which should only attract excess SD of £3000.

They could have sold the 2nd property and bought back a similar one and only paid the lower figure. How is that fair ?

Guess which you have to pay.

Well they hopefully are paying tax already on the btl, but the new rules are to stop the taking advantage and so they should

AdrianC

Sue.Stafford wrote: »

I believe it is fundamentally unfair to a group of young people who already own a house each but wish to jointly purchase a new family home.

In this case if either of them decides to keep their previous residence the new house purchase is deemed to be a 2nd home and the 3% excess stamp duty is applied.

Umm, yes. And?

My heart bleeds for the poor little hard-done-by young people with their two or three houses.