Stamp duty time limit

Philthefragger

Getting divorced, marital home is sold and we also have 4 buy to let flats that we are keeping.

Looking to buy a house for me, outright, no mortgage. It will be my main home.

But I have started a new relationship and at some point in the future might move in with her and rent my property out.

The question ? How long do I have to have my house before renting to avoid the 2nd home stamp duty thing.

Thanks

Philthefragger

Thanks for the links, but you can keep the condescending attitude


I am aware that the purchase of my new main home will fall under the "normal" stamp duty rules as it is replacing my old marital home and will be my new main residence.


What I wanted advice on is say 6 months down the line I want to move in with girlfriend, not co-own, and rent out my house. Am i going to get the revenue knocking wanting an extra X thousand in back stamp duty?


Or is the fact that it was my main residence for a while sufficient ?

Philthefragger

Perhaps if you read the first line of my first post.

I have 4 existing buy to let properties that I will continue to jointly own with my ex wife.

Now can you have a go at answering my question please 👍

SDLT_Geek

In order to escape the higher rates you must intend at the date of completion of the purchase to live in the property as your only or main "residence". As mentioned at SDLTM09812 https://www.gov.uk/hmrc-internal-manuals/stamp-duty-land-tax-manual/sdltm09812 for a person to live in a property as their residence requires more than occupying it. The idea of "residence" connotes a degree of permanence and expectation of continuity. Those who ask how long they need to live in a property for it to be their residence often lack that permanency and expectation of continuity!

But if someone moves into a property fully intending it to be their long term and things later change, such as a job or relationship, meaning they then unexpectedly move out, the property still can have been their "residence". People sometimes say that the "quality of the occupation" is more important than the length of the occupation. Perhaps some people only want to live in a property for a while for fiscal reasons; that is treated as a poor "quality of occupation" lacking the appropriate intentions.


Addition for context: As Tom99 says, my answer here is addressing the question of whether the property OP is buying now will be liable to the higher rates. There are a number of conditions to meet to come within the "replacement exception" (OP owns other properties). The one I focus on is the condition that on the date of completion of the purchase the buyer intends to live in the property as his only or main residence. There are of course other conditions for coming within the replacement excepton, such as having disposed of a major interest in a previous dwelling.

Tom99

00ec25 wrote: »

irrelevant

It was you who asked in what way the OP would own more than one property, I was merely pointing out they already own 4.

00ec25

Tom99 wrote: »

It was you who asked in what way the OP would own more than one property,

exactly.

as I said in the first response:"if you buy a property and then at a later date become a co-owner of the new girlfriend's property but do NOT sell the old main home it is irrelevant how long you lived in the old home before letting it"

the issue is about replacement of the current home to evade higher rate. If that property itself is not replaced then it does not matter if OP owns 4 or 4,000 other properties. Condition D is not met, so the higher rate applies.

So in what way will he own an additional property if he buys into the girlfriends one? The answer is: of course he will

whether the "old" home was ever actually a main residence in reality is a different question, whose answer has been given by geek

Tom99

00ec25 wrote: »

exactly.

as I said in the first response:"if you buy a property and then at a later date become a co-owner of the new girlfriend's property but do NOT sell the old main home it is irrelevant how long you lived in the old home before letting it"

the issue is about replacement of the current home to evade higher rate. If that property itself is not replaced then it does not matter if OP owns 4 or 4,000 other properties. Condition D is not met, so the higher rate applies.

So in what way will he own an additional property if he buys into the girlfriends one? The answer is: of course he will

whether the "old" home was ever actually a main residence in reality is a different question, whose answer has been given by geek

I think you have mis-read the OP's question. They are asking about the stamp duty on the property they are buying now, not on the later move into the girlfriend's one. That is the question answered by SDLT Geek.

SDLT_Geek

Tom99 wrote: »

They are asking about the stamp duty on the property they are buying now, not on the later move into the girlfriend's one. That is the question answered by SDLT Geek.

I have now made an edit to my earlier post to add a bit to make it clear that I am dealing with the property OP is buying now, and just one of the conditions for the replacement exception to apply (the one about intention).

AnotherJoe

Philthefragger wrote: »

The question ? How long do I have to have my house before [STRIKE]renting[/STRIKE] letting to avoid the 2nd home stamp duty thing.

As said by our resident expert here, There is no time limit, it's all on intention which is always subject to challenge. There was a court case a few years back where someone moved into a place stayed there a fair while and then moved out and he lost the case.
So you certainly need to make it look real in terms of doing everything you can to make your move look "genuine" even if it is perfectly genuine Obvious time will help but also move all accounts to it, electoral roll and so on. And delay it as long as you reasonably can.

SDLT_Geek

AnotherJoe wrote: »

As said by our resident expert here, There is no time limit, it's all on intention which is always subject to challenge. There was a court case a few years back where someone moved into a place stayed there a fair while and then moved out and he lost the case.

All correct.
In the cases of Moore v Thompson in 1986 and Bradley v HMRC in 2013 the periods of occupation were each about 8 months, but in each case it was held that the occupation was only of a temporary nature and the property was not lived in as a "residence" as required for capital gains tax principal private residence relief purposes. The "quality" of the occupation is more important than the length of the occupation.

00ec25

Tom99 wrote: »

I think you have mis-read the OP's question. They are asking about the stamp duty on the property they are buying now, not on the later move into the girlfriend's one. That is the question answered by SDLT Geek.

no I did not misread it

OP is divorcing. he has moved out of and sold the old main residence
he is buying a new main residence

therefore he has replaced old with new and is not subject to higher rate.
The 4 BTL are irrelevant in that context as per post #2

the applicability of the CGT "quality of occupation" case law serves to establish whether the new main residence is indeed such, but the fact remains: he is living somewhere having moved out of and sold the ex marital home. That somewhere is not rented, and therefore is "home" on the face of it

the position if/when he buys into the girlfriends place is also covered in post #2