House Purchase

jackpot501

Good Afternoon,


We are recently married and are looking at buying a family house together. We both own apartments in our own names purchased before we were married. Can anyone help with whether we can somehow get around having to pay the 3% additional stamp for second home purchases?
My thought would be for one of us to sell our apartment and purchase the house solely in the sellers name. i.e. if my wife sold her flat and bought the house in her name only? Would this get around the 3% - I ask as the house purchase would be significant and that additional stamp very sizeable.
We are very lucky in that we have a large deposit from inheritance and so the mortgage would be fairly small and easily covered by her salary. The same would be true the other way around.
Thanks very much in advance - very much appreciated.

GoingOn30

No even if you were to buy in just one of your names, you would be treated as a joint entity since you are married and so the second home stamp duty surcharge would still apply.

G_M

jackpot501 wrote: »

Good Afternoon,


We are recently married and are looking at buying a family house together. We both own apartments in our own names purchased before we were married. Can anyone help with whether we can somehow get around having to pay the 3% additional stamp for second home purchases?
.

Yes.


You will need to sell both apartments either before or at the same time as buying your new home.


The alternative is to pay the additional SDLT and sell both apartments within 3 years toclaim the tax back.

SDLT_Geek

Have you both lived in the same apartment for long enough for that one apartment to qualify as the main or only residence of both of you? For instance have you both lived in your wife's apartment whilst your apartment has been rented out? If so then you should escape the extra 3% SDLT if it is that apartment which is sold and you are buying a property for both of you to live in together.

sal_III

If you are keeping the old properties as investment/retirement fund, explore the option to "dispose" of them by transfer to a limited company. The main drawback of doing so will be paying SDLT on the transfers, but this is likely to be more or less offset by the need to pay higher SDLT on your new home otherwise.

Long term benefit of holding the old properties in a ltd. is that you have control on when and how much of the rental income you extract and therefor pay personal tax on.

jackpot501

Many thanks all - we will investigate both the ltd co option and also the 'main residence' (that's very interesting) as we have both lived in my flat for 3 years and rented hers out.
Otherwise - all have been very clear that now we're married my thought process will not work.
Thanks again.

SDLT_Geek

jackpot501 wrote: »

we have both lived in my flat for 3 years and rented hers out.

So if it is your property that you are selling and one or both of you are buying a property for you both to live in then you should escape the extra 3% SDLT. See the piece here: https://www.zoopla.co.uk/discover/buying/stamp-duty-land-tax-3-surcharge-replacement-of-an-only-or-main-residence-and-the-all-important-three-year-rule/