Stamp Duty confusion

welshguy85

Hi,
Thank you for taking the time to read my post! So lucky to be able to ask your advice.

I currently have two properties:
1. Consent to let
2. Property I live in with my partner (not married). My name is currently on the deeds.

My partner and I are due to split up after Christmas and I am raising money against my consent to let property to fund a deposit for a new property. My name will be taken off the deeds of the current property I live in.

Will I be subject to second home stamp duty on my new property (3% of the total value) or will I be exempt as this property will be my only residence?

I am concerned that my first property is a consent to let. Does this class as a residence or as a buy to let property? Confusion!

Thanks again, appreciate all help and time reading this.

kingstreet

IMHO you currently own two properties and after completion you will still own two properties.

In addition, the property to be purchased will be your main residence. Therefore the SDLT surcharge will not apply. You will pay the 'normal' SDLT, you won't be exempt.

[Deleted User]

welshguy85 wrote: »

Hi,
...
I am concerned that my first property is a consent to let. Does this class as a residence or as a buy to let property? Confusion!

.....

As far as I know:

If it's in your name then it is 'yours'.
If you rent it out is immaterial.
If you buy another property, you pay Stamp Duty

AnotherJoe

IANAL but seems to me if you are disposing of your main residence, which appears to be the case, then only the standard SDLT will be due. You might want to make sure theres a legal transaction that shows you selling it even if for £1 and check this with your solicitor. The key point is, are you replacing your main residence with the new one you are buying, not the status of any other properties.

Alter_ego

Sleazy wrote: »

As far as I know:

If it's in your name then it is 'yours'.
If you rent it out is immaterial.
If you buy another property, you pay Stamp Duty

This^^^^^^^^^^^^

welshguy85

Thanks for your help! Really appreciate it.

I understand that standard stamp duty must absolutely be paid on properties over £125k, my concern is whether I have to pay the full 3% as the first property I own is a consent to let (I.e not a buy to let).

AnotherJoe and Kingstreet, I'm leaning to what your saying and will take your advice regarding legal proof with the solicitor, although I'm hoping to get this from the bank once my name is taken off the mortgage and deeds.

Thanks again.

Alter_ego

welshguy85 wrote: »

Thanks for your help! Really appreciate it.

I understand that standard stamp duty must absolutely be paid on properties over £125k, my concern is whether I have to pay the full 3% as the first property I own is a consent to let (I.e not a buy to let).

AnotherJoe and Kingstreet, I'm leaning to what your saying and will take your advice regarding legal proof with the solicitor, although I'm hoping to get this from the bank once my name is taken off the mortgage and deeds.

Thanks again.

Problem is Kingstreet is posting nonsense. Even though it's what you want to hear!

scottishblondie

The status of the first property is irrelevant - it doesn't matter if it is a BTL, on consent to let etc. The simple fact you own it is all that matters.

If your name was not on the deeds of the property you are currently living in, then it would be a clear cut case. You would have to pay the 3% surcharge when buying a new property. That it is to be your main residence is irrelevant to the surcharge - it is simply based on the number of properties you own, not their intended purpose.

Equally if your current main residence was being sold it would be a clear case that this is a replacement of your main residence, and so you are not liable for the 3% surcharge. From the sound of things you are simply having your name removed from the deeds - presumably your ex-partner will become the sole owner? I'm not sure if this will fall under the HMRC definition for the replacement of main residence.

Common sense to me would say that you are replacing your main residence, and so should not be liable, but the rules do not always follow common sense. I think this is one for clarification by your solicitor/HMRC before either panicking or rejoicing.

TrickyDicky101

Alter_ego wrote: »

Problem is Kingstreet is posting nonsense. Even though it's what you want to hear!

Is he? Or is it you? Hmm...

Pixie5740

It's simple. The higher rate of SDLT applies when you purchase an additional residential property. You are not purchasing an additional residential property because you currently own two properties and at the end of the transaction you will still only own two properties.

The only way the higher rate will apply is if you purchase the new property before selling your current home because 3>2.

The government produced this guide to the higher rate of SDLT and even included some example scenarios to make it easier to understand.

welshguy85

Thanks Pixie5740 and ScottishBlondie, you make it sound so simple, but there's clearly a "grey area" here.

I'm inclined to think, and this is not wishful thinking, that as long as I'm off the deeds of the current property I am in and I can prove that my other property is a consent to let (not for residential purpose), then I am clear to proceed with not having to pay the 3% surcharge.

I'll try that link and soeak HMRC for absolute clarity and peace of mind, mortgage advisor was really not sure today.