Stamp duty & second home

xylophone

My mother is getting pretty confused as to what is going to happen with regard to equity. I don't think she'll be able to understand having a charge against the property. As I said, she is not able to hold a conversation as to the different types of ownership without walking away confused.

Do you have Power of Attorney for your mother?

If not, does she have capacity to grant it?

Tom99

00ec25 wrote: »

that would work, but only if mother moves into a rental property for the few months between selling and buying her new home? If she moves in with brother then that is her new main home and the standard rate opportunity is lost, as the disposal is not of her most recent main residence

Would staying in a hotel or with the OP for one night not have the same result?

uknick

xylophone wrote: »

Do you have Power of Attorney for your mother?

If not, does she have capacity to grant it?

Do I have it, no. Is she capable of granting it, yes at present. Will she do it, no.

I've raised the subject a couple of times, especially last year when a consultant suggested she may a vascular disease and needs further tests (which she ignored), but she sees it as a sleight to her independence and casts doubt as to her mental capacity.

When they move to the new houses, about 4 hours drive from her old home and from where I live, I half expect my brother to obtain POA. But, that's all a discussion for another day.

SDLT_Geek

00ec25 wrote: »

as you well know that is the interpretation used in CGT case law, and SDLT is now deemed to draw its foundations from such case law,

I agree that if she had tried to evade CGT on bother's house by claiming it was her main residence she would most likely fail due to the reasons you cite. However, as you are the geek, has there been any case law on those circumstances for SDLT yet ? The spirit of the law ought to deny her claim of lack of continuity as it is an obvious loophole in SDLT terms but therefore counter to CGT law

There is no SDLT case law yet on the point as the meaning of the word "residence", so we are left to interpret the words of the statute as best we can. The words used concerning "residence" are the same as for CGT, where as you say there is a wealth of case law. That case law is highly relevant in so far as it is seeking to interpret the word "residence", but needs to be treated with care where it deals with rules which are specific to CGT and are not in the SDLT code. For example there is a rule in the CGT code that a married couple living together can only have one main residence. That is specific to CGT.


So we have to do our best to fairly interpret the words. It is relevant that HMRC in their SDLT guidance refer to established caselaw, see 3.32 of the guidance https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/570876/SDLT_Higher_rates_for_additional_properties.pdf referring to Frost v Feltham which is a rating case much referred to in CGT cases and guidance.


I take your point about it leaving a "loophole" where someone could buy two properties without paying the higher rates. That is blocked for Wales with a special rule for "intermediate transactions". See Land Transaction Tax and Anti-avoidance of Devolved Taxes (Wales) Act 2017 / Schedule 5 / para 9.


That the English rules leave this possible might be seen as odd, but it would not to be my mind to be enough of a reason to stretch the meaning of the word "residence" beyond its established meaning.

00ec25

SDLT_Geek wrote: »

That the English rules leave this possible might be seen as odd, but it would not to be my mind to be enough of a reason to stretch the meaning of the word "residence" beyond its established meaning.

the jury is out on that one then

SDLT_Geek

There is a follow up to the point about the interpretation of "residence" and the application of the case law on this from the same wording in the capital gains tax legislation.


HMRC have now moved the guidance on the surcharge from the November 2016 pdf to the manual. There are some omissions, some additions and some changes. One addition is at https://www.gov.uk/hmrc-internal-manuals/stamp-duty-land-tax-manual/sdltm09812 and is to add the words:


"Merely occupying a property will not in itself make it a main residence. There needs to be a permanence and expectation of continuation to the occupation to establish it as a main residence."

Intermates

Hi. I own six properties. Five are let and I live in one. I want to move to a smaller house due to health problems and let the house I currently reside in as part of my lettings portfolio. Will I have to pay higher rate stamp duty on my new purchase which I intend to live in as my main residence

00ec25

Intermates wrote: »

Hi. I own six properties. Five are let and I live in one. I want to move to a smaller house due to health problems and let the house I currently reside in as part of my lettings portfolio. Will I have to pay higher rate stamp duty on my new purchase which I intend to live in as my main residence

are you unable to read?

see post 2