Stamp duty question

gardian8

Hi All

We have finally sold our house and we are looking for a new one, all the houses we liked while ours was up for sale have now sold. The ones left on the market where we want to move we have booked viewings for, but these are not perfect for us. We are being chased by our EA to progress and find a new house as our buyers are eager to progress.

If we do not like the 2 properties we have booked viewings for, we may consider renting short term until one comes up we like. My question about stamp duty is: we have a BTL property already, and I have read that if we sold our main residence and bought another on the same day, we would not be subject to the higher rate of SDLT, What I cannot find is what would happen if we sold our home and then after a period of time say 6 to 12 months, bought a new house which would be our main residence. Would having the BTL already and then buying an additional house to live in put us in the higher bracket?

Any advice appreciated

Thanks

00ec25

scenario:
a) you own a BTL, you will retain that
b) you will sell your current main residence but there will be a delay before you buy the replacement main residence.
c) in the meantime you will yourselves be living in rental accommodation.

the above scenario is very clearly covered by the rules
you will NOT have to pay higher rate SDLT (subject to the 3 year time limit)

As long as you buy a major interest in a replacement main home within 3 years of selling the old main home, the fact you lived in rental in between is disregarded as you do not own that property. The technical reason is that you will not have a major interest in the rental property, (see final comment...)

the 5 points of the "before" example define your position
https://www.gov.uk/hmrc-internal-manuals/stamp-duty-land-tax-manual/sdltm09800

If you want an example that uses words, sadly example 12 is the only one that deals with living in rental and on first read you may think does not fit your scenario, but it is the above principles in practice
https://www.gov.uk/hmrc-internal-manuals/stamp-duty-land-tax-manual/sdltm09810

final comment.... your position is categorically stated in the guidance towards the bottom of the first link:
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.

gardian8

Thanks for the information.