SDLT, maybe higher shocker!

Tom99

lowsideoftheroad wrote: »

Yeah, I need to do some digging. Thanks - I will update you. Assuming that they did purchase and then gift the 50%, I guess that it doesn’t satisfy the higher SDLT exemption though?

[FONT=Verdana, sans-serif]No it would not for that 12.5% if it was a gift, but is that 12.5% worth more than £40,000.[/FONT]
[FONT=Verdana, sans-serif]If the 1st 12.5% was definitely inherited within 3yrs can you ignore that and only look at the 2nd 12.5%, I don't know but worth a try?[/FONT]

lowsideoftheroad

Tom99 wrote: »

[FONT=Verdana, sans-serif]No it would not for that 12.5% if it was a gift, but is that 12.5% worth more than £40,000.[/FONT]
[FONT=Verdana, sans-serif]If the 1st 12.5% was definitely inherited within 3yrs can you ignore that and only look at the 2nd 12.5%, I don't know but worth a try?[/FONT]

Um, probably even 12.5% would be over 40k. Is there some official means to estimate value? It’s a 2 bed flat in a nice bit of London, so I would think well over 320k. Which is just another reminder why I don’t live in London.

00ec25

lowsideoftheroad wrote: »

Um, probably even 12.5% would be over 40k. Is there some official means to estimate value? It’s a 2 bed flat in a nice bit of London, so I would think well over 320k. Which is just another reminder why I don’t live in London.

no there is no official means short of paying for a professional valuation and submitting it to HMRC when you claim your SDLT

just look at recent sold (not asking) prices of nearest equivalent to the flat. Either they sold for <320 or they didn't.

00ec25

lowsideoftheroad wrote: »

Yes, thanks - I did notice that statement. The thing is that we have only recently sold Home B. We have been renting while STILL owning Home B. We are also still renting now...we never lived in the flat. So I’m not sure that statement is applicable as an exemption for us, and our solicitor didn’t think so either. Which is annoying.

you miss the point

House B has already been sold before your purchase of A.
in the meantime the only place you have lived in as main home is the rental

you have never lived in the flat, so the fact you owned the flat before you sold B is irreverent in the context of the rental exclusion rule

main home is not a question of how many do you own, it is a question of usage (for which there is extensive case law refining how to define "use")

xylophone

irreverent

irreverent in the context of the rental exclusion rule

Failing to bow down to the law?:)

xylophone

House B has already been sold before your purchase of A.
in the meantime the only place you have lived in as main home is the rental

They seem to have lived in House B for a period before moving out and renting near where they worked.

My wife owned a home before. Home B. She bought it about 10y ago. We lived there as a family for 4y. We then moved for work, and we rented, as the town we moved to was too expensive to buy in. Home B was rented out, but was only last month sold (to our tenants). All good.

At the date of sale the OP and wife were living in a rented property so that house B was not the PPR?

For a certain period the wife owned both B and the share of the flat which the siblings are currently using as a "pied a terre".

She now owns only a share of the flat so the question is whether extra SDLT will need to be paid on the purchase of A which will be the PPR replacing the rented property?

00ec25

xylophone wrote: »

They seem to have lived in House B for a period before moving out and renting near where they worked.

are you suggesting a correction or merely repeating?

as has already been established, between B and A the only main residence they have had is the rental.

A rental is ignored for the purposes of higher rate given that the old house has now been sold before the new one is purchased.

lowsideoftheroad

00ec25 wrote: »

are you suggesting a correction or merely repeating?

as has already been established, between B and A the only main residence they have had is the rental.

A rental is ignored for the purposes of higher rate given that the old house has now been sold before the new one is purchased.

So that’s how I originally read that statement on the GOV website, but having re-read it, I think that it suggests Home B would only still count as our PPR if we had sold it and THEN rented somewhere (for less than 7y), then bought Home A. That’s not what we did. We rented (for six years) after moving away for work, but only recently sold Home B.
My solicitor is also taking the strict interpretation of that clause, FWIW.

Here it is again:
Renting while replacing a purchaser’s only or main residence
An assured shorthold tenancy taken between the sale of the old property and purchase of the new property will be ignored so long as the tenancy is not granted for a term of more than 7 years.

xylophone

A rental is ignored for the purposes of higher rate given that the old house has now been sold before the new one is purchased.

But the wife still owns 25% of the pied a terre ( an interest acquired by inheritance and gift)


Therefore House A (although it will be the PPR) is a second property and the higher SDLT may apply?

G_M

00ec25 wrote: »

Hi GM, you need to research SDLT a bit more,

Thanks 00ec25 - I will. And I'll stick to commenting on areas where I'm more confidant!