Am I first time buyer

SDLT_Geek

oz0707 wrote: »

Does this also mean purchase price has to be below 500k outside London.

Yes, for first time buyers' relief the price must not be more than £500,000. It does not matter where in England it is. (Note that for Wales for transactions completing on or after 1 April 2018 there will be no first time buyers' relief).

SDLT_Geek

oz0707 wrote: »

Are we saying the guidance in the link is wrong then because quote from chapter 3 - In order to count as a first time buyer, a purchaser must not, either alone or with others, have previously acquired a major interest in a dwelling or an equivalent interest in land situated anywhere in the world.
Equivalent interest in land would rule me out?

Whoops, I was a bit too quick to say that the guidance is wrong. It is the HMRC policy paper and the interpretation that many have given to the guidance that is wrong! Some have said that a person is not a first time buyer if they have ever owned a residential property. The actual test is whether they have acquired a dwelling.


This is correctly stated at Chapter 3 of the guidance note and reflects the para 6 provisions you quote.


The "equivalent interest" wording in para 6(1)(b) does not rule you out as that is referring to equivalent interests in a dwelling outside of England, Wales and Northern Ireland. Anyway, your acquisitions were of bare plots of land without a dwelling on them, or even a dwelling in the course of construction.

oz0707

Yes I would be buying jointly, but my partner is a complete virgin first time buyer! That is what gave me the bug to find out whether I was FTB, as it seemed such a shame to waste her FTB status if we both go and buy a property for around the 500k mark.

Your right specialist advice is needed. Would it not be for me to claim if I believe myself to be within the law and defend if it was ever challenged? Also if prior to any purchase I was to lay all my chips out in an letter to Land Registry or (more appropriately) some SDLT government department would in not be for them to clarify the situation?

(a) That you get within the replacement exception to the higher rates. From what you say, perhaps you do, as you have entirely disposed of a dwelling which you used to live in as your only or main residence
I think I need help understanding this. Surely I would have to sell my current main house regardless but potentially not before any purchase, just within 3 years after? Or are you getting at the point that because I qualify for FTB SDLT relief, my current main residence wouldn't necessarily have to be sold because I never acquired it as a dwelling?

Very interesting. Merry Christmas BTW.

SDLT_Geek

Tom99 wrote: »

[FONT=Verdana, sans-serif]I agree there is confusion, various government documents refer to 'purchased', 'acquired' and 'owned' as if they mean the same thing.

[/FONT] [FONT=Verdana, sans-serif]The legislation you link to does not, for example, seem to include inherited property unless I have missed that part. However there are many references to past inherited property being a bar to a FTB, including the online stamp duty calculator, so where is that covered in the legislation?[/FONT]

The issue with inherited property is the wide meaning of "been a purchaser" in the legislation at Schedule 6ZA/para6(1)(a). Oddly it is not limited to acquisitions for value for SDLT generally. It picks up acquisitions by gifts and by inheritance.


There are then further issues with inheritance as to when a "major interest" is acquired. This is not on the death of the previous owner, but later: perhaps on an assent, appropriation or the completion of the administration of the estate.

SDLT_Geek

oz0707 wrote: »

Your right specialist advice is needed. Would it not be for me to claim if I believe myself to be within the law and defend if it was ever challenged? Also if prior to any purchase I was to lay all my chips out in an letter to Land Registry or (more appropriately) some SDLT government department would in not be for them to clarify the situation?

If you were to write to lay out your chips it would be HMRC and the section in Birmingham who deal with stamp duty land tax.


SDLT is a self assessed tax, so it could be as straight forward as finding a conveyancer who understands the nuances of all of this and would be comfortable submitting the land transaction return on your behalf claiming the relief. Why start engaging with HMRC when you can get comfortable claiming the relief once you have the advice you need?

SDLT_Geek

oz0707 wrote: »

(a) That you get within the replacement exception to the higher rates. From what you say, perhaps you do, as you have entirely disposed of a dwelling which you used to live in as your only or main residence
I think I need help understanding this. Surely I would have to sell my current main house regardless but potentially not before any purchase, just within 3 years after? Or are you getting at the point that because I qualify for FTB SDLT relief, my current main residence wouldn't necessarily have to be sold because I never acquired it as a dwelling?

Yes, I am saying that (depending on your exact circumstances) you will qualify for FTB SDLT relief without selling you current home because you did not acquire it (or any other property) as a dwelling: so long as you can rely on the replacement exception as at the date of the purchase of your new home with your partner.


Perhaps it will help to think of it as a flowchart with a series of tests you must satisfy to meet the conditions.


The first test is whether you have ever acquired a major interest in a dwelling. It seems not, your acquisitions were of bare land.


The second test is whether you escape the higher rates of tax as at the date of the upcoming purchase. You can satisfy that in one of two ways. Either is enough.
(a) The first way is to point to your previous sale of a dwelling you used to live in and establish that the replacement exception applies to you, even though you retain a dwelling.
(b) The second way would be to first sell your present home before (or on the same day as) your upcoming purchase.
But why do (b) if (a) works perfectly well? So I suggest you check that (a) works for you.


As a matter of interest, your suggestion of selling the current home within 3 years after the upcoming purchase does not work. Let us say that route (a) based on the sale of your first home does not work for some reason. Perhaps by way of example:

• you did not live in the sold house as your main residence or
• you retain a small share in the sold house or
• you sold the house over three years ago and the upcoming purchase completes after 26 November 2018.

In any of those events the higher rates would apply if you keep your current home. Whilst a sale of the current home within three years would enable you to claim back the 3% surcharge it would not, on my reading of the legislation in Schedule 6ZA, enable you retrospectively to claim first time buyers' relief. It does not work that way.

SDLT_Geek

SDLT_Geek wrote: »

These odd conclusions come from a close reading of the legislation governing First Time Buyers' Relief for SDLT. It will be in Finance Act 2003/Sch6ZA but is presently in effect by virtue of the Budget Resolutions .

The Finance Act 2018 received Royal Assent on 15 March 2018, so first time buyers relief is now in place under section 41 of that Act replacing the Budget Resolutions.

SDLT_Geek

Best of luck oz0707 with the purchase.