Stamp duty, house owned in France under special circumstances

Purple&me

Hi all,
We have a new build Stamp Duty question that may need specialist advice due to the circumstances. I hope somebody on the forum will be able to help us.

My wife of 2 years has owned a property (mortgage free) in France since 2001. She divorced in 2012 and moved to England where we both live. She was born in the UK as was I.
She has a legal agreement in France with her ex-husband for co-ownership as her 3 children live there, where she can't force a sale as it is her children's residence.
It is not her principal residence and when she visits her children in France we stay at a friend's property.
Since we met in 2012, we have lived in rented accomodation to this day. As for myself, I do not own any property in the UK or elsewhere.

We are now in the position where we want to purchase a new build in the UK for £111,000 and are seeking a mortgage. However, we seem to have entered a grey area regarding Stamp Duty with the 3% that may be or may not be due.
Any guidance would be greatly appreciated.

Pixie5740

Purple&me wrote: »

Hi all,
We have a new build Stamp Duty question that may need specialist advice due to the circumstances. I hope somebody on the forum will be able to help us.

My wife of 2 years has owned a property (mortgage free) in France since 2001. She divorced in 2012 and moved to England where we both live. She was born in the UK as was I.
She has a legal agreement in France with her ex-husband for co-ownership as her 3 children live there, where she can't force a sale as it is her children's residence.
It is not her principal residence and when she visits her children in France we stay at a friend's property.
Since we met in 2012, we have lived in rented accomodation to this day. As for myself, I do not own any property in the UK or elsewhere.

We are now in the position where we want to purchase a new build in the UK for £111,000 and are seeking a mortgage. However, we seem to have entered a grey area regarding Stamp Duty with the 3% that may be or may not be due.
Any guidance would be greatly appreciated.

This isn't a new question for the forum nor is it a grey area. If your wife's interest in the French property is worth £40k or more the higher rate of SDLT will apply.

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/570876/SDLT_Higher_rates_for_additional_properties.pdf

Purple&me

Ok thanks. We were confused regarding main residence as she has not lived there for 5 years, nor can she sell.

Purple&me

Regarding the linked document, the question is still unclear about her main residence. As I read it, our main residence has been this rented accomodation for the last 5 years. She has not resided nor stayed at the house in France during that time, since before the divorce.
However, she has a legal agreement in place that prevents her forcing a sale in France whilst her children are growing up.
Still a grey area for me.

I refer to page 13, paragraph 3.30.

Doozergirl

Not grey. The main residence is a red herring.

She owns one property. She will own two. Higher rate applies.

00ec25

so under the terms of the 2012 divorce your (current) wife retains legal ownership of her ex marital home in France subject to the French equivalent of a "Mesher Order", ie she cannot sell until her children who still live there reach "maturity".

as such she does indeed retain an interest in a property owned somewhere in the world, is not selling it within the next 3 years, and therefore fails the concession given to divorcing couples over the treatment of the ex marital home

she is liable for the higher rate and since you intend purchasing the new property jointly that means the higher rate applies to you as well, it is not split into a his 'n hers share

Mrs_pbradley936

What if he buys the new house and she is not a legal owner?

00ec25

Mrs_pbradley936 wrote: »

What if he buys the new house and she is not a legal owner?

if he buys the new house in his sole name that has been covered in countless previous posts and clearly explained in the guide already referenced: are conditions A - D met or not?

Purple&me

as such she does indeed retain an interest in a property owned somewhere in the world, is not selling it within the next 3 years, and therefore fails the concession given to divorcing couples over the treatment of the ex marital home

So if circumstances were to change and her ex husband were in a position to buy her out, could we apply to have the SDLT reimbursed?

G_M

Purple&me wrote: »

So if circumstances were to change and her ex husband were in a position to buy her out, could we apply to have the SDLT reimbursed?

No.

Because she would not be disposing of her main residence!

AdrianC

Mrs_pbradley936 wrote: »

What if he buys the new house and she is not a legal owner?

They're a married couple, they're treated as a single entity.

They own one house.
They will own two houses.