Avoid losing 3% duty on 2nd home? Help.

rizla01

My house in in my name. my partners house was in her name as well as the two BTL's that she has.
As we were struggling a couple of years back, to find a decent house to move to, with what would result from my sale plus savings, we decided to sell her house for a better chance of finding something nice.
If I remember correctly that money will need to be put into a property before this coming August to avoid being penalised (Though for the moment, I cant remember what the penalty is). Can that be got round by letting my partner buy into my property?
We are both in our 70's and are hoping to buy a property for around £700k and pay off one of the £100k BTL mortgages and leave a bit of spend in the bank.
I hope this makes sense.

Thanks

foxy-stoat

If you are replacing your property (main residence) with another property which will also be the main residence then the extra 3% wont apply to you. 

Not sure what the penalty you are talk about is though.

AnotherJoe

The extra SDLT is on selling, not buying. The proceeds you (she) received previously on which you presumably paid any tax due (which may have been none* ) at the time have no time scale on extra tax being paid 

* CGT? Did she live in it?

rizla01

Hi AJ,

yes she did live in it for a couple of years.

trex227

Isn’t the issue that when they buy a house together because she owns BTLs the higher rate stamp duty will apply? I’m assuming there’s some kind of timeframe allowed after selling main residence to buy another and you think you’re getting close to end of that? You’re not married?

trex227

https://www.gov.uk/hmrc-internal-manuals/stamp-duty-land-tax-manual/sdltm09805

The first situation

This is where the disposal of the old main residence/ property occurred before, or on the day of the purchase of the new main residence / property [Para 3(6)].  There is no need to account for higher rates of tax.

 

Example  

An individual buys a dwelling and intends to live in it as her main residence. The effective date of the transaction is 31 May 2019.  If she had previously sold a dwelling at any time on or since 1 June 2016 then the purchase may be a replacement of a main residence.  The dwelling she disposed of would have had to have been her only or main residence at some time during the period 1 June 2016 to 31 May 2019.  She must not have acquired another new main residence after the disposal and before the purchase.

If the individual had purchased her new dwelling on or before 26 November 2018 then the three year time limits would not apply.  The dwelling previously disposed of by her must have been her only or main residence at some time.  She still must not have acquired another new main residence after the disposal and before the purchase. 

trex227

https://www.gov.uk/hmrc-internal-manuals/stamp-duty-land-tax-manual/sdltm09800

The above also clarifies the new residence has to be bought within 3 years of the sale of the old main residence. 

trex227

I’m pretty sure if I remember correctly if you were married your property could count as her main residence so higher rate wouldn’t apply.