Avoid additional stamp duty by getting married?

jimmyjones_2

My partner and I both live in a house I own and purchased before we met.
She owns a flat that is currently rented.

Ideally we would like to keep my partners flat as a BTL and move home.

My understanding is that according to the Additional Stamp Duty rules, if we moved house and jointly purchased a new property with our unmarried status we both have different primary residences and we would have to pay the additional 3%.

If we got married however, a married couple can only have primary residence which we would be replacing so we wouldn't have to pay the additional stamp duty.

Have I interpreted the rules correctly? Should we be planning a trip to Vegas?

Another option would be for me to buy the house in my sole name but we would need to protect my partners financial interest in the new property, I have read about using a deed of trust. Is this option worth investigating further?

Slinky

You old romantic, I can see the proposal, darling, marry me, lets save the 3% :rotfl:

Pixie5740

Yes you would avoid the additional SDLT if you got married. Married couples can only have one main residence for tax purposes so that would be where you are living now. Therefore if you sold the current home to buy another home you would just pay the regular SDLT rate.

On the other hand, buying the home solely in your name whilst creating a deed to protect your partner's interest in the property won't necessarily mean you won't pay the additional SDLT.

Should I go and buy a hat?

The_Logans

jimmyjones wrote: »

My partner and I both live in a house I own and purchased before we met.
She owns a flat that is currently rented.

Ideally we would like to keep my partners flat as a BTL and move home.

My understanding is that according to the Additional Stamp Duty rules, if we moved house and jointly purchased a new property with our unmarried status we both have different primary residences and we would have to pay the additional 3%.

If we got married however, a married couple can only have primary residence which we would be replacing so we wouldn't have to pay the additional stamp duty.

I'm not sure this is correct. We are buying a second home (replacing our primary residence) and letting out our current home (current primary residence). We are married. We still have to pay the extra stamp duty.

mrginge

The_Logans wrote: »

I'm not sure this is correct. We are buying a second home (replacing our primary residence) and letting out our current home (current primary residence). We are married. We still have to pay the extra stamp duty.

The OP is looking to replace one of their current two properties.

You however added an additional property.

Pixie5740

The_Logans wrote: »

I'm not sure this is correct. We are buying a second home (replacing our primary residence) and letting out our current home (current primary residence). We are married. We still have to pay the extra stamp duty.

You are not replacing your current main residence. You are keeping your current main residence and buying another main residence. 1+1=2 therefore you pay the additional SDLT.

TBagpuss

It would be possible for you to own the new property in your sole name (assuming of course that you can get a suitable mortgage without your partner's income being taken into account)

It would be sensible to have a declaration of trust setting out that you hold on trust for both of you you. You may also wish to have a cohabitation agreement drawn up defining what you shares are and what ongoing contributions you will each be making, and how (if at all) those will change your original shares.

Bear in mind that how you own the property will also have implications for things such as inheritance.

i am not certain whether you are correct about the SDLT rules so double check that with you solicitor before you decide.

Either way, it may be appropriate for you and your partner to think about your longer term plans and whether you actually want to be married, and go from there.

jimmyjones_2

Thanks for all of your replies!

I was being flippant about getting married in Vegas just to avoid stamp duty, we are planning to get married anyway but were hoping to get a new home together first. We might just have to rethink the order of our plans.

TBagpuss, thanks for the info about the declaration of trust and cohabitation agreement - I will do some research. I suppose speaking to a solicitor would be our best option.

murdoch35

Sorry to jump in on your thread but I'm in a similar situation and assumed we would have to pay the additional stamp duty but maybe I'm wrong?

Me and my now Husband both owned a property each before we met, when we got together he moved his mum into his flat and moved in with me, 5 years later we got married and the situation is the same. His mum lives rent free in his flat and my husband an I live together in my house.

We are now purchasing a new property together selling mine which has been our main residence for the last 5 years. The flat in my husbands name will be unaffected and will remain with his mother living in it.

Will we have to pay the higher stamp duty as our solicitor has said yes as at the end of the day we own two properties regardless of which one was our main residence? but this thread seems to thing no?

cashbackproblems

if she keeps her flat which is in her name, and you were to split that probably wouldn't count as a marital asset. And she would be entitled to at least half the home you buy, putting you in a worse position if your using the proceeds from the sale of yours

In your position I would want her to sell her flat also and then buy together.

xylophone

if she keeps her flat which is in her name,

The only "flat" mentioned is one owned by the OP's husband from before their marriage and which is occupied rent free (and will continue to be occupied) by his mother.