SDLT conundrum

working1

Hoping to get clarity on the SDLT situation here; my husband and I expected to sell our homes (from previous relationships) and buy one together before we married but it just didn't happen and we have just got on with it while the dreaded Brexit rumbles on, living seperately.

One of us owns buy-to-let property which we want to hold on to, but we now want to try again to sell our own homes and buy one main residence together.

Neither of us have ever lived in the other's homes and we have lived in them for several years. What will the SDLT liability be?

Thanks for your responses

xylophone

Re PPR for CGT - a married couple can have only one PPR.

https://www.telegraph.co.uk/finance/personalfinance/capital-gains-tax/11349300/My-wife-and-I-live-separately.-Are-both-houses-free-of-capital-gains-tax.html

Re SDLT

https://www.gov.uk/stamp-duty-land-tax/residential-property-rates

working1

xylophone wrote: »

Re PPR for CGT - a married couple can have only one PPR.

https://www.telegraph.co.uk/finance/personalfinance/capital-gains-tax/11349300/My-wife-and-I-live-separately.-Are-both-houses-free-of-capital-gains-tax.html

Re SDLT

https://www.gov.uk/stamp-duty-land-tax/residential-property-rates

Wow, thanks for these, looks like we have a hefty bill on our hands when we move in together then...shuffles off to get calculator ..:exclamati

SDLT_Geek

If you each sell the home you each own and live in and then buy a home together the higher rates should not apply. It does not matter that you own let properties.

If either of you still own one of the homes then I would expect the higher rates to be due when you buy together, but the 3% to be recoverable if you sell both within three years.

SDLT does not have an absolute rule that spouses can have only one residence between them. Anyway, for the replacement exception we look back for three years before the purchase concerned to see if the buyer had been living in that earlier home as his/ her only or main residence at any time within those three years.

working1

SDLT_Geek wrote: »

If you each sell the home you each own and live in and then buy a home together the higher rates should not apply. It does not matter that you own let properties.

If either of you still own one of the homes then I would expect the higher rates to be due when you buy together, but the 3% to be recoverable if you sell both within three years.

SDLT does not have an absolute rule that spouses can have only one residence between them. Anyway, for the replacement exception we look back for three years before the purchase concerned to see if the buyer had been living in that earlier home as his/ her only or main residence at any time within those three years.

Thank you for this, what a relief! Yes the one of us who sells first will rent a home (still separately) while the other one sells theirs, then we will buy together.
So it will be easy to prove that we have run completely separate households for the 3 years previously as we both have all of our bills/council tax/mortgage statements all paid independently. Thanks so much for clarifying! :T:beer:

working1

SDLT_Geek wrote: »

If you each sell the home you each own and live in and then buy a home together the higher rates should not apply. It does not matter that you own let properties.

If either of you still own one of the homes then I would expect the higher rates to be due when you buy together, but the 3% to be recoverable if you sell both within three years.

SDLT does not have an absolute rule that spouses can have only one residence between them. Anyway, for the replacement exception we look back for three years before the purchase concerned to see if the buyer had been living in that earlier home as his/ her only or main residence at any time within those three years.

So to clarify, for the purposes of SDLT we are treated as having 2 separate main residencies, exactly as is the case, but for Capital Gains Tax we have to choose which house should be classed as the main residence and we have to pay CTG on the other one, even though it has been a main residence?

Is it just a case of choosing the one with the lesser CGT bill as the main residence...is it not fraudulent to claim that I've lived in his house when I haven't... will it not be a lie on the forms? I have never paid any of his bills or mortgage and vice versa, we do our own food shops and everything?!

00ec25

nonetheless, it appears you are now (re)married and therefore CGT will be due on one of the properties because, unlike SDLT, a married couple is indeed classed as having only one exempt main home between them, even if they live "separately"

working1

00ec25 wrote: »

nonetheless, it appears you are now (re)married and therefore CGT will be due on one of the properties because, unlike SDLT, a married is indeed classed as having only one exempt main home between them even if they live "separately"

I see, thank you, eek I've been in mine 30 years so I guess we'll be using his as our main 'choice' then!

Thank you all, so useful. :T

SDLT_Geek

working1 wrote: »

So to clarify, for the purposes of SDLT we are treated as having 2 separate main residencies, exactly as is the case,

Yes, for SDLT which property is one's only or main residence is based on a factual test of where one has lived with enough of a degree of permanence and expectation of continuity. The SDLT rules do not have the "add ons" which apply for cgt, such as the ability to elect where one lives in several properties, nor the special rule about married couples.

working1

SDLT_Geek wrote: »

Yes, for SDLT which property is one's only or main residence is based on a factual test of where one has lived with enough of a degree of permanence and expectation of continuity. The SDLT rules do not have the "add ons" which apply for cgt, such as the ability to elect where one lives in several properties, nor the special rule about married couples.

Thank you for this, is there a rule about timelines? I plan to sell my home and go into rented for a few months whereas ideally he would sell his and go straight into our joint new 'together' home... if the transactions for that are on the same day, could we come unstuck or will the timestamp of the sale and then the purchase be enough?

SDLT_Geek

working1 wrote: »

Thank you for this, is there a rule about timelines? I plan to sell my home and go into rented for a few months whereas ideally he would sell his and go straight into our joint new 'together' home... if the transactions for that are on the same day, could we come unstuck or will the timestamp of the sale and then the purchase be enough?

It should work well for SDLT if you sell your property, then move into his (without acquiring any share in his), then he sells his property and you then buy together.

If it is you who owns the let property then you must buy your new home within three years of the sale of your current home.