Land and Building Transaction Tax

Glade_Girl

Hi all, Firstly let me thank you in advance for any help or advice you can offer. I am a shared owner of my parents flat. Me and my 2 siblings own an equal third share, our parents have a "life rent" clause included in the legal documents. We are hoping to sell our home and move closer to our parents due to their ill health. Everything I've read refers to this as "selling your main residence". My question is: If we sell our main residence and move to a new main residence will the move attract Land and Building Transaction tax? All properties, (flat and current home and new home are all in Scotland). Thanks very much

davidmcn

Normal rates of LBTT will apply to your purchase.

Glade_Girl

Thanks very much for replying. I've been searching for an exact example of my situation in the tons of literature online. I found an example where if you are selling your main residence, moving to a new main residence and also have a buy-to-let property, the guidance states LBTT would not apply as long as you move from one main residence to another main residence on the same day and do not have anytime where the ownership overlaps? Do you know if that covers my situation in a round about sort of way? Thanks again

davidmcn

It does (it doesn't matter whether your other property is buy-to-let or not), but the result is you pay the normal rates rather than the additional supplement for buying an additional property.

00ec25

Glade_Girl wrote: »

Do you know if that covers my situation in a round about sort of way? Thanks again

the underlying principles are:

1. How many properties do you currently own?
In your case answer: 2

2. Is one of those properties your main residence?
In your case answer: yes

3. Are you selling your main residence?
In your case answer: yes

4. You are retaining one property and buying an additional property. Will that additional property (crucially) be used as your new main residence, thereby replacing property in Q2 and Q3 with the property in Q4?
In your case answer: yes

the standard rate applies
You are replacing your main home. You start with 2, you end with 2, having "changed" main homes on the way
(Obviously be aware of the time line in case the sale happens after the purchase and you end up with having to pay upfront and then claim a refund)

Glade_Girl

Thanks very much for all your help. Just so I'm clear, we will be liable for "stamp duty" in old terms but not any additional tax?

davidmcn

Glade_Girl wrote: »

Thanks very much for all your help. Just so I'm clear, we will be liable for "stamp duty" in old terms but not any additional tax?

Yes, it's just a "normal" purchase in LBTT terms.

Here's the online calculator - the Additional Dwelling Supplement doesn't apply because you're replacing your main residence.

Glade_Girl

That's been really useful and enlightening. I thought LBTT was an additional tax on top of "stamp duty" that was paid when you owned a 2nd property. You all helped me realise LBTT replaced stamp duty and then additional dwelling supplement was what I was actually questioning. Every day IS a school day!! I can now rest a bit easier and look forward to being closer to my parents and giving them some much needed TLC. I can't thank you enough