Unsure about ADS on new property!

GDubh

Hi, thanks for looking, I'm new to the forum so please be gentle!

I'm trying to get to the bottom of whether or not I would be due to pay ADS on a property that me and my partner are looking to purchase. Looking at the details I can't work out if our current set up leaves us requiring to pay it or not!

So I own a property that I let out. I've owned this for around 12 years and it's been let out for around 6 of those. We live in my partners house and that is a part buy / part rent that she owns a 25% share of. To purchase the new property we would be releasing equity from my mortgage and selling the house we currently live in. I think my uncertainty is around the fact that the house I own is not my main residence and hasn't been for a long time.

The tax is high enough that it may but a stop to our plans!

Any help or advice is most welcome.

G

G_M

You are not married.
You own a property that is let out and is not your main residence.

You are buying (jointly) a new priperty.
You are not selling your main residence - since you don't own it.


I believe you will have to pay the adiional SDLT.


But there are more expert people than me here and they may conclude that your partner is selling her main residence to buy the property so it is not payable.

Pixie5740

Given there user name and the talk of ADS ( additional dwelling supplement) I suspect the OP is in Scotland where LBTT applies.

Co-habitees appear to be treated the same as married couples and civil partners.

Married couples, those in a civil partnership and cohabitants (those living together as though married, including same-sex cohabitants), along with their dependent children (children under 16, including adopted children), are treated as one economic unit for the purposes of the application of the ADS.

Source: Revenue Scotland

I think that as long as the current main residence is sold the ADS will not apply. Although I'm not sure who or what decides that co-habitees are living as though married.

GDubh

Thanks!

Yes Pixie, we're in Scotland. I had come across something similar that got me thinking we may not be required to pay it but it doesn't seem clear cut!

G_M - Our current main residence will be sold, I don't own it but my partner is part owner and we will be buying the new property jointly, it's all as clear as mud!

Pixie5740

The SSI Order 2017 made amendments to the ADS Legislation in connection with spouses, cohabitants and civil partners. The amendments came in to force on 30 June 2017 and provide relief from the ADS where spouses, civil partners and cohabitants jointly buy a new main residence but the previous main residence they are replacing is owned by only one of them. See LBTT 10062A.

LBTT 10062A says:

Relief from ADS may be claimed if:

there are two buyers who are (in relation to each other) spouses, civil partners or cohabitants;
they jointly purchase a new dwelling which they both intend to occupy as their main residence;
in the 18 months prior to the purchase of the new dwelling, one of the buyers sold a dwelling; and
that dwelling had been occupied by both buyers as their main residence at any point during that same period.

Therefore I still think the ADS will not apply.

GDubh

Wow Pixie, thank you very much for that! Very much appreciated, certainly looks a lot more clear cut now!