Additional dwelling LBTT (Scottish stamp duty) for separated couple?

turquoisecity

My husband and I separated amicably in 2013 and have lived apart ever since, but never divorced or got anything on paper to say we’re no longer a couple. Partly this was because we lived abroad at the time and it would have messed up our visa situation; since returning to the UK in 2014/15 it’s just never been an issue so we simply haven’t bothered with it. 

Before moving abroad we lived in a property which was in my husband’s sole name, which he later sold and bought the house where he lives now. I inherited a property in 2011 which I too later sold and bought my current house outright. We weren’t married all that long and never owned any property jointly. 

We are co-parents and are both planning to move to Scotland in six months’ time for reasons to do with our son’s education. This will be a concurrent but not a joint move, in that we’re both moving to the same city, but intend to buy a property each, as now. Due to timing issues (needing to sell and buy before the start of the new school year) there may be some overlap where it might be necessary for me to stay at his house for a few weeks or months, which we’re both ok with.

It’s come to my attention however that we might now fall foul of the new stamp duty laws (LBTT in Scotland) and either or both of us be charged at the ‘additional dwelling’ rate for second homes, as we might be treated legally as a married couple, since we don’t have divorce papers or a court order. 

We can prove we’ve lived apart for more than six years, but would this be invalidated if I moved in with him for a few months, even if I have my own room and paid him rent? Will this even make a difference, or will we get stung for the higher rate stamp duty anyway due to owning two properties as a ‘couple’? Is there any way around this other than a court order?

I’ve tried looking online for advice but everything seems to apply only to one partner leaving a jointly-owned home and wanting to buy their own place, rather than to long-separated couples who each own property individually. I appreciate our situation is unusual! Any advice gratefully received though. 

davidmcn

You're "separated" in terms of the legislation if you

(a) no longer live together, and

(b) do not intend to live together again.

I wouldn't have thought a temporary stay as a guest contradicts that.

ADS will still apply if you're buying before you've sold your own property (with potential refund if you sell quickly enough).

turquoisecity

davidmcn said:

You're "separated" in terms of the legislation if you

(a) no longer live together, and

(b) do not intend to live together again.

I wouldn't have thought a temporary stay as a guest contradicts that.

ADS will still apply if you're buying before you've sold your own property (with potential refund if you sell quickly enough).

Thanks but I’ve seen reports (England only) 
which seem to indicate that at least one of us (whoever sells and buys second, presumably) wouldn’t be able to get a refund on the ADS because we would still own more than one property between us? (Sorry it won’t let me post a link but there’s a Telegraph article from 2018 about exactly this). After all, on paper, our circumstances could look identical to those of a happily married couple with a budding property portfolio! 

I seem to remember that when he bought his house in 2017 this issue did come up, but his lawyers decided that as he had no financial interest in my house (because he’s never lived there) it didn’t affect his property purchase. I just don’t know whether that decision would hold true in every case and/or apply in Scotland?  

Skiddaw1

Would it be easiest to divorce before purchasing next properties? As you're on good terms I'd have thought it would be feasible to do so within 6 months if you start the process quickly.

turquoisecity

Skiddaw1 said:

Would it be easiest to divorce before purchasing next properties? As you're on good terms I'd have thought it would be feasible to do so within 6 months if you start the process quickly.

Theoretically I suppose so, although it would be a last resort, but surely we’d have to get it finalised before even starting the purchase process? And there’s not enough time for that.