Stamp Duty for separating couples

Pacer204

My Girlfriend and I own a house with a joint mortgage. We have decided to go our separate ways (all very amicable) and she is going to buy me out and remain in the house as her main residence. The twist is that she owns a rental investment in her own name.

We have had conflicting opinions about whether or not she has to pay the higher rate SDLT on the half of the house that we have already paid SDLT on 3 years ago. I know she has to pay SDLT but it seems daft that its at the higher rate on a house we already own.

Can anyone shed any light on this matter? Thanks in advance.

00ec25

she will pay normal rate, it is covered by Condition C
read:
https://www.gov.uk/hmrc-internal-manuals/stamp-duty-land-tax-manual/sdltm09785

SDLT_Geek

I do not see how Condition C helps here to escape the higher rates. Condition C is likely to be met because of the rental investment she owns.

What might help is the new rule introduced with effect from 22 November 2017 for those increasing their share in a property. There is a requirement to start off with at least 25%. Also that the person acquiring the further interest has lived in the property as their only or main residence throughout the previous three years.

00ec25

SDLT_Geek wrote: »

I do not see how Condition C helps here to escape the higher rates. Condition C is likely to be met because of the rental investment she owns.

What might help is the new rule introduced with effect from 22 November 2017 for those increasing their share in a property. There is a requirement to start off with at least 25%. Also that the person acquiring the further interest has lived in the property as their only or main residence throughout the previous three years.

which is what 2nd para of the above link is about

SDLT_Geek

The second para of SDLTM09785 gets one as far as saying that the existing half share in the same property does not "count against" the person acquiring a further interest in the house (the girlfriend). But there is also the rental investment which she owns in this case which, if worth £40k or more, will mean that Condition C is met for her acquisition of the other half share of the house.


It is the special rule, now in FA2003/Sch4ZA/para7A introduced with effect from 22 November 2017, which will help if the girlfriend acquiring the half share has lived in the property as her only or main residence throughout the three years leading up to the acquisition.