Stamp Duty enquiry (multiple houses)

sdpoo

Hi folks

I'm hoping you can put my mind at ease before I speak to my solicitor on Monday.

I am married and own our main home solely in my name as it was purchased before we were married.

My wife still owns her old flat, purchased prior to marriage, which is now rented out.

Because I consider my house to be our main residence (it is where we've both lived for years!), I assumed we would not have to pay the second property stamp duty rates when we sell this house and buy another one together (as we're selling our main house, albeit in my name, to buy another main house together).

We've started to sell our house and are buying a new one together and assigned solicitors etc.

However now I've just filled out the solicitor's questionnaire regarding stamp duty I'm really concerned that we might get stung for 3% extra stamp duty on the £285,000 we're paying for our new house. Obviously this is massive expense (£8,550) which I don't want to pay as we're really only selling our main house to buy another.

Can anyone advise if they believe we'd need to pay the second home stamp duty or not? If you believe we do, surely we could just avoid it by legally adding my wife to the deeds of the main house?

Many thanks,
Simon

TamsinC

Your wife owns another house (her flat) - therefore this would be a second purchase - therefore you will be liable for the 3% surcharge.

EDIT: Fair cop - got it wrong it seems

G_M

You are replacing your main residence. ie selling current main residence and replacing with purchase of a new main residence.


You do not have to pay the additional 3% SDLT.

sdpoo

Thanks guys, two posts, two different answers . Suspect the same is probably true even if I spoke to multiple solicitors.

I've done some reading on SDLT where married couples had their own homes prior to marriage and it doesn't sound great (or straight forward). It seems I might have to transfer some of the equity of our current house to her, and pay SDLT on 50% of the transfer. THEN when we bought a new house together we would exempt from the 3% surcharge because we're selling our (joint) main home.

Pretty gutted as this is probably going to slow up the process and cost us thousands. Maybe we'll have to consider selling her old flat to reclaim the extra SDLT?

00ec25

TamsinC wrote: »

Your wife owns another house (her flat) - therefore this would be a second purchase - therefore you will be liable for the 3% surcharge.

tosh

read the rules .... Condition D being the relevant one
https://www.gov.uk/hmrc-internal-manuals/stamp-duty-land-tax-manual/sdltm09730
which is then subject to the "special rules" applicable to married people
https://www.gov.uk/hmrc-internal-manuals/stamp-duty-land-tax-manual/sdltm09820


example 1 being the definitive answer in the context of the Op's question...
https://www.gov.uk/hmrc-internal-manuals/stamp-duty-land-tax-manual/sdltm09810

sdpoo

Oh my god, Example 1 there is a thing of beauty! Thank you!!

sdpoo

For info,

SDLT - higher rates for additional dwellings: Condition D - further examples
Example 1
Mr and Mrs S, a married couple, each own a residential property, with neither having any interest in the others property. They both live in the property owned by Mrs S: the property owned by Mr S is rented out. Mrs S is selling her property and they are jointly purchasing a new one, which will be their new main residence. Mr S will retain his rented out property.

The higher rates will not apply to the joint purchase by Mr and Mrs S of a new main residence. As they are married and have both lived in the property owned by Mrs S as their main residence they will both be treated as replacing their main residence.

This describes our situation almost exactly, except the genders are reversed

G_M

sdpoo wrote: »

For info,

This describes our situation almost exactly, except the genders are reversed

Ah well. Then it obviously does not apply....:rotfl:

00ec25

sdpoo wrote: »

For info,

This describes our situation almost exactly, except the genders are reversed

sue the government - clear case of blinkered gender stereotyping and therefore discriminatory.
Should net you thousands in compo - and keep a no win no fee lawyer off the breadline