Help ref second home stamp duty & capital gains tax

Theproblemisweremarried

My husband and I have been married for just over a year and are in the process of buying our first home together. Technically we both still have our own homes. Post and voting still at separate addresses.

We have sold my house (smallest in value) and had offer accepted on a new property that needs both our incomes for the mortgage.

Qu will our first home together be a second home and have to pay extra stamp duty? As it is the intent for this new home to be both our main residence?

And if state new home as main residence will we have to pay capital gains tax on my husband's old house?

Currently very confused and seems like we would have been better off financially if we had never got married!

Any help & advice would be much appreciated

Greeba

If you are selling your 'main residence' then you should be exempt. Your comments suggest you have kept your house as a residence so this should be justifiable; your mail and electoral registration sound like your house was your main residence when you sold it, but maybe take some advice if you think you've been cohabiting in a way that a tax auditor might ask questions about.

dimbo61

Your husband still owns a property so yes you will have to pay the extra 3% stamp duty.
However if he sells his old house within 3 years I think ! You can claim the extra stamp duty back.
He has lived at his home for some time ?
He will only have to pay capital gains if he rents it out for a few years and the property goes up in value.
He also has allowances to offset his capital gains

Theproblemisweremarried

Thanks for your feedback, he has owned his house for nearly 10 years and never rented it

Pixie5740

Married couples can only have one main residence regardless of where your post might be going.

Where are you both living just now?

Cakeguts

Theproblemisweremarried wrote: »

Thanks for your feedback, he has owned his house for nearly 10 years and never rented it

If he continues to own it after you have bought a house together you will have to pay the extra 3% stamp duty. If he sells it within 3 years he can claim the stamp duty back because he will then only own one property.

The stamp duty is due if you buy a second property and keep the one you already have.

Theproblemisweremarried

It's becoming clear that will probably have to pay the additional stamp duty and call our new house a second home. If we sell my husband's house after the 3 year time limit, will we have to pay capital gains?

G_M

Pixie5740 wrote: »

Married couples can only have one main residence regardless of where your post might be going.

Where are you both living just now?

Unless I've missed it, you have not answered this?

Yes, you'll need to pay the additional SDLT, but whether you'll be able to reclaim it depends

a) on the answer to the above Q and
b) what you do with your husband's property in the future.

Theproblemisweremarried

We are currently living in my house. The one we have just sold. So I think this makes my husband's house the second home. So with this being the case, maybe normal stamp duty will apply as main (temp) property transfer to new join purchase.
So from what you are saying when we sell our second home which we are referring to as "his" we'll have to pay capital gains tax even if it hasn't been rented. Is that right?

Pixie5740

You are currently living in the main marital residence and you are selling that main residence in order to purchase a new main residence - you will not have to pay the additional SDLT. In terms of SDLT you are better off being married.

When you eventually come to sell the second home there could be CGT to pay because it's not your main residence, it doesn't matter if it has been rented out or not, it's the fact it's not a main residence that can attract CGT liability. However, there will be certain reliefs because it was at one time your husband's main residence and you get a CGT allowance which is £11,800 for the current tax year you may well find that whilst "his" property is subject to CGT there will be none to pay.

Theproblemisweremarried

Thanks Pixie5740, this is in line with what our account has said yesterday, so feeling more ease. Thanks everyone who commented