Refund of Stamp Duty

Pixie5740

You're still not due a SDLT refund and you won't pay the higher rate of LBTT (assuming you are selling the property in England).

mrsbun2002

I know this is an old thread, but its still ongoing and relevant …….. I'd appreciate clarity of the situation please.

We now selling the house in England, and once completed, and as outlined above, wish to buy another in Scotland.

I have just been told by a solicitor in Scotland that we need to pay the higher fee (called ADS in Scotland) again when we purchase a home in Scotland as we've owned the property we paid the higher fee on in England for over 18 months? I presumed that it would be "refunded" and paid again on the new property?

Can anyone advise please?

pinklady21

In Scotland, LBTT ADS is repaid if you dispose of your additional property within 18 months of buying the "next" one.
I believe the equivalent timescale in England is 3 years, but happy to be corrected on this.

Assuming that you are swapping one main residence for another, and that your other (2?) Scottish properties are both rentals, and will remain so, when you purchase your new main residence, then you pay "usual" LBTT without the ADS.

Did you explain this scenario to your solicitor?

mrsbun2002

pinklady21 wrote: »

In Scotland, LBTT ADS is repaid if you dispose of your additional property within 18 months of buying the "next" one.
I believe the equivalent timescale in England is 3 years, but happy to be corrected on this.

Assuming that you are swapping one main residence for another, and that your other (2?) Scottish properties are both rentals, and will remain so, when you purchase your new main residence, then you pay "usual" LBTT without the ADS.

Did you explain this scenario to your solicitor?

”
Thank you for your reply. Its quite a relief as this was my belief all along, but wondered if I'd missed something!

I outlined our position to 4 solicitors today, looking for quotes for purchasing a new "main residence" in Scotland, AFTER selling our current "main residence" in England. Our two Scottish rentals will remain as rentals, and we are currently renting elsewhere in Scotand. Because the selling of the English main residence has to take place prior to buying in Scotland (its prudent due to the different selling/purchasing conditions between the two countries), I presumed we wouldn't need to pay the extra ADS. I also explained that we have a "mortgage in principle" as our RBS mortgage on the English residence gives us three months to effectively swap it over to the new residence in Scotland (I know it won't be as simple as that) without having to start from scratch applying for a mortgage.

Three of the solicitors seemed to understand this, but one was very admant that we'd need to pay ADS again, at 4% taking into account the pending increase.

Thanks again for your reply

pinklady21

This looks like an example that might cover your circumstances:

https://www.revenue.scot/land-buildings-transaction-tax/frequently-asked-questions/additional-dwelling-supplement-examples

mrsbun2002

pinklady21 wrote: »

This looks like an example that might cover your circumstances:

https://www.revenue.scot/land-buildings-transaction-tax/frequently-asked-questions/additional-dwelling-supplement-examples

Thanks again! This looks like the answer to my question :-)

2.07 Replacing main residence, already own a buy-to-let property

Q: I am in the process of selling my main residence and I already own a buy-to-let property. I plan to buy a property that will become my next main residence. Will the Additional Dwelling Supplement be due?

A: Provided that you complete the sale of your current main residence on or before the effective date of acquisition of your next main residence, the Additional Dwelling Supplement will not apply to the purchase of the next main residence even though after settlement of this transaction you will own 2 dwellings. However, if you still own your previous main residence at the end of the effective date of acquisition of your next main residence you will have to pay the Additional Dwelling Supplement although you may be able to claim repayment of the supplement paid after you sell your previous main residence


Thanks for your advise again. I'd spent the afternoon searching but never found that page at all. Very helpful, and a huge relief

00ec25

mrsbun2002 wrote: »

Three of the solicitors seemed to understand this, but one was very admant that we'd need to pay ADS again, at 4% taking into account the pending increase.

I can understand why the 4th took that view.

the Scottish guidance, unlike the English version, does not categorically state that living in a rented property in between selling the old main residence and buying the new main residence is ignored.

indeed the scottish guidance goes to some lengths (poor spelling aside) to explain that a main residence can be one that is itself rented. "Your main residence is usually where you live and spend most of your time. It does not matter whether you own or rent your main residence or lives in it free of charge."

as you state you will retain ownership of 2 let properties in Scotland, sell the English main residence and purchase a new main residence in Scotland I think you fit closer to the "portfolio owner" examples given you own 3 properties. On that basis I think 2.16 and/or 2.17 are the best fits to your circumstance, albeit the outcome is the same: replacement, therefore no ADS

https://www.revenue.scot/land-buildings-transaction-tax/frequently-asked-questions/additional-dwelling-supplement-examples

That said, I can't follow your previous posts to see if you are within, or without, the 18 month limit.
if you are, it seems cut and dried as per example 4A.

if you are without the 18 month period it looks like a lost cause: "When considering the first stage of the test, the dwelling being sold must have been an only or main residence of the buyer in this purchase transaction at some point in the 18 month period prior"
https://www.revenue.scot/land-buildings-transaction-tax/guidance/lbtt-legislation-guidance/lbtt10001-lbtt-additional-dwell-16

https://www.revenue.scot/land-buildings-transaction-tax/guidance/lbtt-legislation-guidance/worked-examples-additional-0-2

mrsbun2002

00ec25 wrote: »

I can understand why the 4th took that view.

the Scottish guidance, unlike the English version, does not categorically state that living in a rented property in between selling the old main residence and buying the new main residence is ignored.

indeed the scottish guidance goes to some lengths (poor spelling aside) to explain that a main residence can be one that is itself rented. "Your main residence is usually where you live and spend most of your time. It does not matter whether you own or rent your main residence or lives in it free of charge."

as you state you will retain ownership of 2 let properties in Scotland, sell the English main residence and purchase a new main residence in Scotland I think you fit closer to the "portfolio owner" examples given you own 3 properties. On that basis I think 2.16 and/or 2.17 are the best fits to your circumstance, albeit the outcome is the same: replacement, therefore no ADS

https://www.revenue.scot/land-buildings-transaction-tax/frequently-asked-questions/additional-dwelling-supplement-examples

That said, I can't follow your previous posts to see if you are within, or without, the 18 month limit.
if you are, it seems cut and dried as per example 4A.

if you are without the 18 month period it looks like a lost cause: "When considering the first stage of the test, the dwelling being sold must have been an only or main residence of the buyer in this purchase transaction at some point in the 18 month period prior"
https://www.revenue.scot/land-buildings-transaction-tax/guidance/lbtt-legislation-guidance/lbtt10001-lbtt-additional-dwell-16

https://www.revenue.scot/land-buildings-transaction-tax/guidance/lbtt-legislation-guidance/worked-examples-additional-0-2

Thank you 00ec25. I think I may have complicate things by not mentioning (as I didn't realise the significance) that our current rented accommodation isn't paid for by ourselves, but by my husbands work. Part of the terms of moving us from England to Scotland, is that they continue to pay our rent until our English property is sold, including the costs of selling the English property and costs of buying our next main residence in Scotland. That said, this bit of news may not make any difference whatsoever?

AnotherJoe

mrsbun2002 wrote: »

Thank you 00ec25. I think I may have complicate things by not mentioning (as I didn't realise the significance) that our current rented accommodation isn't paid for by ourselves, but by my husbands work. Part of the terms of moving us from England to Scotland, is that they continue to pay our rent until our English property is sold, including the costs of selling the English property and costs of buying our next main residence in Scotland. That said, this bit of news may not make any difference whatsoever?

It might also depend what is meant by "paying our rent".
Two potential different scenarios.
1. You are renting a place, and then husbands employer reimburses you for the cost.
2. Husbands employer rents a place,and you live in it for free.


These could potentially be quite different legally. Certainly in (1) I'd say its irrelevant you are recompensed. You are clearly renting.

In (2) then possibly you are not renting at all.

mrsbun2002

AnotherJoe wrote: »

It might also depend what is meant by "paying our rent".
Two potential different scenarios.
1. You are renting a place, and then husbands employer reimburses you for the cost.
2. Husbands employer rents a place,and you live in it for free.


These could potentially be quite different legally. Certainly in (1) I'd say its irrelevant you are recompensed. You are clearly renting.

In (2) then possibly you are not renting at all.

Mmmm, I see what you mean. The company paid for all costs to move us here as I stated, but we pay the rent and my husband claims the rent back with his monthly expenses claim. We have a budget of £15k to move, which covers the move, fees, rent etc. By us claiming, we can keep an eye on our expenditure. Seemed like a good deal at the time, but not so sure now