Buying a second (?) home after divorce

crispy_chris

Sorry to resurrect my old thread but thought I would provide an update - in case anyone ever comes across this thread while facing a similar issue.

HMRC yesterday finally confirmed I don't have to pay the extra 3% SDLT as the court approved consent order stating my ex-wife remains in the property to the exclusion of myself, means that HMRC wouldn't class any future property as a second home for myself.

So happy days

SDLT_Geek

Again for anyone looking at this thread in the future, the guidance in the Manual confirming this point about a "property adjustment order" has been moved from SDLTM08920 to SDLTM09797 which can be found here: https://www.gov.uk/hmrc-internal-manuals/stamp-duty-land-tax-manual/sdltm09797

martindow

Thanks for updating us cris. It's always good when threads are brought to a close with an update which can help others. Rather a lot are left up in the air and we never know the final outcome.

samanthanea1

Just want to say thanks to Crispy Cris and everyone that's posted in this thread; I've spent many hours looking for a resolution on this (my partner is in exactly the same position) so it's great that you've updated the thread with your outcome.
I just want to check; did HMRC not consider you to have a "beneficial interest", even though you would be entitled to any equity in the property if you & your ex decided to sell? Or did you have to waive your entitlement to any equity, in order to avoid the stamp duty?
Also, what did the "court order" actually look like? My partner has a written document from the solicitor, drawn up during mediation, which states that he will retain an interest in the property (and his ex will remain in there) with the children until both kids turn 18, or she decides to move out. This doesn't appear to be a "court order" but then I'm not sure what a court order would look like?! I'm not sure if the solicitors letter would suffice. The divorce DID go through the courts though.

SDLT_Geek

If there is the right kind of court order then it would be fine that your partner has a share in the property. It is exactly that kind of situation that the 22 Nov 2017 changes were looking to address.

A court order normally "looks like" a court order, that is something very official, saying it is an order with the name of the court, the case number, the names of the petitioner/applicant and respondent, giving the name of the judge and so on. There are often lots of AND UPONS and an IT IS HEREBY ORDERED THAT.

philliptesmith

samanthanea1 wrote: »

Just want to say thanks to Crispy Cris and everyone that's posted in this thread; I've spent many hours looking for a resolution on this (my partner is in exactly the same position) so it's great that you've updated the thread with your outcome.
I just want to check; did HMRC not consider you to have a "beneficial interest", even though you would be entitled to any equity in the property if you & your ex decided to sell? Or did you have to waive your entitlement to any equity, in order to avoid the stamp duty?
Also, what did the "court order" actually look like? My partner has a written document from the solicitor, drawn up during mediation, which states that he will retain an interest in the property (and his ex will remain in there) with the children until both kids turn 18, or she decides to move out. This doesn't appear to be a "court order" but then I'm not sure what a court order would look like?! I'm not sure if the solicitors letter would suffice. The divorce DID go through the courts though.

Hi,

Quick Question gain on this very useful thread. I am in a very similar situation as I did not get a Court Order, but retained a 25% share of the house and paid 50% of the mortgage which was agreed through mediation. I will not benefit from the house financially in the end. How did you get on with the Higher Rate stamp duty without a court order, but a situation that is for the same reason?

SDLT_Geek

philliptesmith wrote: »

I am in a very similar situation as I did not get a Court Order, but retained a 25% share of the house and paid 50% of the mortgage which was agreed through mediation. I will not benefit from the house financially in the end. How did you get on with the Higher Rate stamp duty without a court order, but a situation that is for the same reason?

If your 25% share is worth £40,000 or more and you do not have a "property adjustment order", then I would expect the extra 3% to apply on a purchase of another property, even though you intend to live in the property acquired.

ethank

crispy_chris wrote: »

Hi all,
(wording in the divorce agreement was that my wife is responsible for all mortgage payments and indemnifies me against them - which I take to just mean if she stops paying, I will pay the mortgage and pay her less monthly as a result).

Indemnify means to compensate you for your loss.

If she stops paying the mortgage, it means you must pay the mortgage and can sue her to repay you anything you've paid. Unless your agreement has a separate clause which gives you the right to set off against the indemnity