Stamp duty

Cheeky_Monkey

slightlychilled wrote: »

Correct, I'm not purchasing an additional property but purchase and ownership start to become confusing. I own another property but didn't purchase it, I inherited it several years ago.

My main residence in the UK was sold some time ago when I moved abroad where I rented. Purchasing a property now in the UK as my main residence replaces the property I sold previously and so does not attract the additional SDLT. If however, as seems now a possibility, I may be posted abroad again I have the dilemma of my OP.

AFAIK, whether you paid any money for the property you currently own is irrelevant. You own it - full stop. Therefore the extra 3% stamp duty will be payable when you purchase a second property.

Pixie5740

slightlychilled wrote: »

Correct, I'm not purchasing an additional property but purchase and ownership start to become confusing. I own another property but didn't purchase it, I inherited it several years ago.

My main residence in the UK was sold some time ago when I moved abroad where I rented. Purchasing a property now in the UK as my main residence replaces the property I sold previously and so does not attract the additional SDLT. If however, as seems now a possibility, I may be posted abroad again I have the dilemma of my OP.

:wall: :wall: :wall:

You've underlined the wrong word. It's whether you will end up with an additional property at the end of the transaction that's important. It does not matter whether you purchased your existing property, inherited it or won it in a raffle. Please read HMRC's Guidance Note on the subject the link to which is in post #2.

slightlychilled

The HMRC site states the following

"If you’re replacing your main residence

You won’t pay the extra 3% SDLT if the property you’re buying is replacing your main residence and that has already been sold."


This confirms advice already received, you can own a dozen or more properties but as long as you're replacing your main residence the additional SDLT does not apply.

Cheeky_Monkey

I could be wrong but I would've thought that your 'main residence' was wherever you are/were living abroad. How long ago did you sell your previous 'main residence'?

Has your solicitor included stamp duty in their quote to you or haven't you told her that you already own another house?

lovinituk

There is actually something in the rules that state you can rent in between selling your main residence and buying another later and not having to pay the additional duty. There is also something about selling/buying before/after certain dates which might complicate things.

OP I suggest you speak to a solicitor for a definitive answer. There are too many views posted here without knowing the full ins and outs of the rules and regulations.

00ec25

slightlychilled wrote: »

Correct, I'm not purchasing an additional property but purchase and ownership start to become confusing. I own another property but didn't purchase it, I inherited it several years ago.

My main residence in the UK was sold some time ago when I moved abroad where I rented. Purchasing a property now in the UK as my main residence replaces the property I sold previously and so does not attract the additional SDLT. If however, as seems now a possibility, I may be posted abroad again I have the dilemma of my OP.

what a shame you did not give these details to start with instead of wasting people's time. You intend to buy (own / win in a lottery / have gifted to you / otherwise end up with) an ADDITIONAL property over and above the one you already own. You will end up owning 1 +1 = 2 which is an increase of 1 in the number of properties in your name

yes you are correct that if the new property is a replacement main residence then the higher rate does not apply. However, there are time limits and conditions associated with it qualifying as a replacement

as your Op is now in better context your question "how long" can you live there to establish it as a main resident now makes sense. the answer however is it is not a factor of time. There is much case law covering what constitutes a "main" home which you can read for yourself, the principles stem from Capital Gains Tax appeals but apply equally to SDLT's "main" home and are summarised as "degree of permanence, continuity or expectation of continuity"...

https://www.gov.uk/guidance/stamp-duty-land-tax-buying-an-additional-residential-property

https://www.gov.uk/government/publications/stamp-duty-land-tax-higher-rates-for-purchases-of-additional-residential-properties

http://www.bailii.org/uk/cases/UKFTT/TC/2013/TC02827.html

lovinituk

If my understanding is correct then as long as the OP purchase before November 2018 then they won't have to pay the additional duty...

The quotes are from the full guidance notes - https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/570876/SDLT_Higher_rates_for_additional_properties.pdf

3.19A For purchases on or before 26 November 2018, there is a replacement of a main residence if, at any time before the purchase, the purchaser, or their spouse or civil partner, disposed of a major interest in another dwelling25 and the purchaser has not purchased another main residence in the period between that disposal and the new purchase. That other dwelling must have been, at some time, the only or main residence of the purchaser26.

3.24 Renting a new main residence in the time between disposal and purchase will not prevent the purchase from being a replacement of a main residence unless the period of the tenancy agreed is more than seven years30.

00ec25

lovinituk wrote: »

If my understanding is correct then as long as the OP purchase before November 2018 then they won't have to pay the additional duty...

The quotes are from the full guidance notes - https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/570876/SDLT_Higher_rates_for_additional_properties.pdf

you are correct, however, I'd hope the OP would have had to read this themselves instead of being spoon fed it

lovinituk

00ec25 wrote: »

you are correct, however, I'd hope the OP would have had to read this themselves instead of being spoon fed it

To be fair it isn't that straight forward if you've never looked at the guidance before. You and I have previously given incorrect advice on this in an older thread, over pretty much the same situation. I've only really got my head round it recently.

slightlychilled

lovinituk wrote: »

There is actually something in the rules that state you can rent in between selling your main residence and buying another later and not having to pay the additional duty. There is also something about selling/buying before/after certain dates which might complicate things.

OP I suggest you speak to a solicitor for a definitive answer. There are too many views posted here without knowing the full ins and outs of the rules and regulations.

Yes I'm confident in the research I've done so far but was hoping there was someone on the forum who had a definitive answer / link to the time-frames involved. It's these that are the unknown variables at the moment. Primarily as per my OP, how long would I be expected to live in the property as my main residence to prevent retrospective collection of SDLT. Secondly, nowhere specifies the acceptable elapsed time between selling a main residence and buying a new one which leads me to believe there is no limit.