Higher Rate of Stamp Duty

mickfriar

Looking for some advise.


6 years ago I moved into my girlfriends house and have lived at the address since, In October last year we got married. We have decided to move house now selling her current property and the new house will be in my wifes name and wifes mortgage, this is because I am still on the mortgage of my house I own with my ex wife.


It seems there is some confusion regarding the level of stamp duty my wife needs to pay on the new property, We believe that because it is our "main residence" we are replacing then we pay the standard rate, The HMRC helpline confirmed this also however the solicitor is insisting it is the higher rate we pay as now we are married we are treated as one.


I understand we are treated as one but as we are replacing our "Main" residence then I believe we should only be paying the standard rate.



So to confirm, We are selling our main residence and purchasing a new main residence, I will still be on a mortgage with a house I jointly own with my ex wife which is rented out.

Advise please?

Lokolo

You aren't disposing of the current main residence, you are keeping it, therefore you owe the higher rate tax. Moving your main residence is not the same as disposing.

You have 1 property, you are purchasing another, therefore you will at the end of the transaction have 2. You owe it.

Should you dispose of the original property before the end of 3 years*, you can get a refund.

* I think it's 3

mickfriar

But we are disposing of our main residence, do you not agree?

Lokolo

In the future, it would be wise to put all the details in the opening post rather than editing it after.

Let me get this straight.

You live with your partner who owns a property (Property A).
You are purchasing a property jointly (Property and selling her old property (Property A).
You are joint owner with your ex OH in another property (Property C).

Is this correct?

mickfriar

You live with your partner who owns a property (Property A). YES
You are purchasing a property jointly (Property and selling her old property (Property A). NO, THE WIFE IS PURCHASING IT IN HER NAME AND MORTGAGE BUT YES TO SELLING THE PROPERTY A
You are joint owner with your ex OH in another property (Property C). YES

AnotherJoe

To me that seems clear, you are replacing main residence so higher rate doesn't apply.

mickfriar

That's also our thoughts but solicitor isn't having it..

es5595

Consult another solicitor (if you're using a conveyancing agency, DEFINITELY switch to a real solicitor!) and see what they say.
If they are happy for the lower rate of stamp duty, tell your current solicitor, and they can either charge the lower rate or you'll be taking your business to the new one!

AdrianC

mickfriar wrote: »

You are purchasing a property jointly (Property and selling her old property (Property A).
NO, THE WIFE IS PURCHASING IT IN HER NAME AND MORTGAGE BUT YES TO SELLING THE PROPERTY A

For the purposes of the +3% SDLT, a married couple are one unit.

You (plural) own and live in A.
You (plural) are selling A and buying B.
You (plural) will live in B.
You (plural) jointly own C.

+3% does not apply.

I wonder... If you're buying B then selling A, unlinked transactions (no chain), you'll need to pay the 3% then reclaim.

dunroving

AdrianC wrote: »

For the purposes of the +3% SDLT, a married couple are one unit.

You (plural) own and live in A.
You (plural) are selling A and buying B.
You (plural) will live in B.
You (plural) jointly own C.

+3% does not apply.

I wonder... If you're buying B then selling A, unlinked transactions (no chain), you'll need to pay the 3% then reclaim.

Sorry, don't want to hijack the thread, but I can't find any information on what the time frame for this is - must the two closings be on exactly the same day to avoid the additional 3%? So, even if the sale of the original house is 24 hours after the purchase of the new house, the additional 3% must be paid? What with all the already expensive costs of buying and selling, this is a daunting cost when often buyers in good faith will sell the original house. What if, for example, you have already exchanged contracts on the current/owned house? But the closing date is one or two days after the new house closing?

mickfriar

Thanks Adrian,


It is a linked transaction so no need to claim back, it is just frustrating that the solicitor believes he is correct, maybe he is covering his !!!!, We've wrote to HMRC but they take upto 40 days to reply with the outcome,