SDLT and "disposal of the previous main residence"

RM1985

Wondering if anybody can offer me advice/reassurance with regards to SDLT guidance notes

• My ex partner and I bought a house (Property A) in 2009 and lived in it.
• In 2010 we bought a 2nd house (Property as an investment and rented it out.
• We later separated and I moved out of property A into private rented accommodation.
• We agreed I would have Property B and he would have Property A.
• In November 2017 I signed Property A over to him, and he signed property B over to me, via solicitors.

So now I only own Property B. I want to keep it as a BTL but also want to buy a house to be my main residence.

Am I right in thinking that me relinquishing my ownership in Property A will be regarded as a "disposal" of my previous main residence, and therefore I won't have to pay SDLT?

The government's guidance notes for SDLT says:

"3.18 The disposal of the previous main residence does not have to be by way of sale, although that is likely to be the case for most individuals. For example the property may have been gifted to someone else or transferred under a court order as part of a divorce settlement."

Thanks in advance.

00ec25

were you married?

on the face of what you say property A was indeed a disposal of your main residence and B has never been your main home as you live in rented.

RM1985

Thanks for your reply. No, not married. Do you think I'm ok?

Lunchbox

When did you move out of property A and into rented accommodation?

RM1985

I moved out in 2015. Transfer of equity was completed in November 2017.

Lunchbox

It needs to have been your main residence within 3 years of the date of completion on your new property to avoid the higher SDLT, so you would need to complete in 2018 before the date that you moved out in 2015.

00ec25

Lunchbox wrote: »

It needs to have been your main residence within 3 years of the date of completion on your new property to avoid the higher SDLT, so you would need to complete in 2018 before the date that you moved out in 2015.

yes they would need to complete "in" 2018, but more precisely on or before 26 Nov 18 to avoid failing the 3 year rule assuming they left A before Nov 2015 when the clock would start ticking for the 3 year period.

para 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 dwelling 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 purchaser

if the purchase completes after 26 Nov 18 then the 3 year rule applies so it must have been a main residence within the previous 3 years

3.20 For purchases on or after 27 November 2018, there is a replacement of a main residence if, in the three years ending with the purchase, the purchaser disposed of a major interest in another dwelling and that other dwelling was, at some time in the three year period, the only or main residence of the purchaser

RM1985

Thanks for your replies and advice.

This might sound like a stupid question, but will this exemption from higher rates of SDLT with regards to replacing my main residence be a one off, or will it always apply?

E.g. I buy a house next month to live in, and don't pay any SDLT2 because it's replacing my main residence. But in 5 years I sell it in order to buy a bigger house (intended to be my main residence)

G_M

Each time you move in the future, assuming you keep the BTL property, you can move from one main residence to another and not be liable for additiona SDLT

RM1985

Ah great, thanks.

SDLT_Geek

G_M wrote: »

Each time you move in the future, assuming you keep the BTL property, you can move from one main residence to another and not be liable for additiona SDLT

Assuming each time that you dispose of your former residence rather than keeping it.