Stamp Duty Land Tax Refund - Additional Property Rate

chaotic_j

Hi,
I completed on a property in September 2017 which is now my main residence - as I still owned my previous main residence I paid an 'Additional Property Rate' of Stamp Duty Land Tax which if I sell the previous main residence within 3 years I can claim back.

The trouble is due to lockdown I am now unable to sell as I was about to put it on the market and I am concerned that even when lockdown ends I may miss the 3 year deadline.

Is there any way I could transfer the property to my partner? we are unmarried. She has a property inherited which she intends to sell as executor/beneficiary. My original main residence value is below the threshold for Stamp Duty Land Tax, but would Capital Gains Tax apply as I would be considered to be disposing of an asset?

Thanks in advance.

[Deleted User]

chaotic_j said:

Hi,
I completed on a property in September 2017 which is now my main residence - as I still owned my previous main residence I paid an 'Additional Property Rate' of Stamp Duty Land Tax which if I sell the previous main residence within 3 years I can claim back.

The trouble is due to lockdown I am now unable to sell as I was about to put it on the market and I am concerned that even when lockdown ends I may miss the 3 year deadline.

Is there any way I could transfer the property to my partner? we are unmarried. She has a property inherited which she intends to sell as executor/beneficiary. My original main residence value is below the threshold for Stamp Duty Land Tax, but would Capital Gains Tax apply as I would be considered to be disposing of an asset?

Thanks in advance.

Does your original property still have a mortgage attached to it?

CGT may come into play even if you give away the original property for free.

chaotic_j

Lover_of_Lycra said:

chaotic_j said:

Hi,
I completed on a property in September 2017 which is now my main residence - as I still owned my previous main residence I paid an 'Additional Property Rate' of Stamp Duty Land Tax which if I sell the previous main residence within 3 years I can claim back.

The trouble is due to lockdown I am now unable to sell as I was about to put it on the market and I am concerned that even when lockdown ends I may miss the 3 year deadline.

Is there any way I could transfer the property to my partner? we are unmarried. She has a property inherited which she intends to sell as executor/beneficiary. My original main residence value is below the threshold for Stamp Duty Land Tax, but would Capital Gains Tax apply as I would be considered to be disposing of an asset?

Thanks in advance.

Does your original property still have a mortgage attached to it?

CGT may come into play even if you give away the original property for free.

I own the original property outright, partner has the funds to buy it at market value

Vestraun

chaotic_j said:

Lover_of_Lycra said:

chaotic_j said:

Hi,
I completed on a property in September 2017 which is now my main residence - as I still owned my previous main residence I paid an 'Additional Property Rate' of Stamp Duty Land Tax which if I sell the previous main residence within 3 years I can claim back.

The trouble is due to lockdown I am now unable to sell as I was about to put it on the market and I am concerned that even when lockdown ends I may miss the 3 year deadline.

Is there any way I could transfer the property to my partner? we are unmarried. She has a property inherited which she intends to sell as executor/beneficiary. My original main residence value is below the threshold for Stamp Duty Land Tax, but would Capital Gains Tax apply as I would be considered to be disposing of an asset?

Thanks in advance.

Does your original property still have a mortgage attached to it?

CGT may come into play even if you give away the original property for free.

I own the original property outright, partner has the funds to buy it at market value

Surely any saving of yours would be negated by the stamp duty your partner would then pay?

Thrugelmir

Vestraun said:

chaotic_j said:

Lover_of_Lycra said:

chaotic_j said:

Hi,
I completed on a property in September 2017 which is now my main residence - as I still owned my previous main residence I paid an 'Additional Property Rate' of Stamp Duty Land Tax which if I sell the previous main residence within 3 years I can claim back.

The trouble is due to lockdown I am now unable to sell as I was about to put it on the market and I am concerned that even when lockdown ends I may miss the 3 year deadline.

Is there any way I could transfer the property to my partner? we are unmarried. She has a property inherited which she intends to sell as executor/beneficiary. My original main residence value is below the threshold for Stamp Duty Land Tax, but would Capital Gains Tax apply as I would be considered to be disposing of an asset?

Thanks in advance.

Does your original property still have a mortgage attached to it?

CGT may come into play even if you give away the original property for free.

I own the original property outright, partner has the funds to buy it at market value

Surely any saving of yours would be negated by the stamp duty your partner would then pay?

If the property is held within the estate still. Then there's no second home stamp duty to pay. 

dimbo61

So you waited 2 and a half years before trying to sell ?
The property might have gone up in Value ?
You might have rented the property out for the last 2+ years.
Life is full of surprises and Covid 19 was not expected by anyone.
With lockdown and uncertainty in the housing market Now maybe an impossible time to sell.

chaotic_j

My partners inherited property is still held within the estate. If she bought my previous main residence at market value would there be no Capital Gains Tax? I could claim the 'Additional Property Rate' Stamp Duty Land Tax back and she could sell the property?

I don't want to go into the reasons on a public forum why it's been 2 and a half years I'm trying to find out what options I have regarding the current situation, so I can decide how to proceed and would be grateful for any and all constructive advice.

I'm not looking to rent the property out I need to sell it but recouping the original price I paid in 2010..

greatcrested

She would pay standard SDLT on the purchase price of your property.

What would she do with the property? Keep it? Live in it? Let it? Sell it?

That plus selling costs if she sold >/< the SDLT you'd reclaim?

Capital Gains Tax is irrelevant - you may/may not have to pay it but that applies whether you ell to her or on the open market!

oldbikebloke

chaotic_j said:

Hi,
I completed on a property in September 2017 which is now my main residence - as I still owned my previous main residence I paid an 'Additional Property Rate' of Stamp Duty Land Tax which if I sell the previous main residence within 3 years I can claim back.

The trouble is due to lockdown I am now unable to sell as I was about to put it on the market and I am concerned that even when lockdown ends I may miss the 3 year deadline.

Is there any way I could transfer the property to my partner? we are unmarried. She has a property inherited which she intends to sell as executor/beneficiary. My original main residence value is below the threshold for Stamp Duty Land Tax, but would Capital Gains Tax apply as I would be considered to be disposing of an asset?

CGT would apply to the disposal of the old main residence on the basis you are gifting it 
the gain would be the difference between its current market value and your original purchase cost (also less some legal fees)
as it was your main home you would get tax relief for the % of time it was your main home plus the final 9 months of ownership. That would leave a % of time when it is liable for CGT, which appears to currently be around 27 months out of the total ownership period. It appears your originally purchased it in 2010 so, very approximately a % of around 2.25 years / 9 (ish) years = 25%
The amount of gain liable for CGT (gain x 25%) is most probably going to work out as £0 given your comment that the property is worth less than £125,000, so the taxable gain must be tiny, and therefore almost certain to be covered by your CGT personal allowance anyway, whether you gift it to her or sell on the open market to a stranger.

CGT is not an issue. Whether the disposal of the property to your girlfriend is a qualifying disposal to enable you to avoid higher rate SDLT is a different matter. Legally you are not married, but clearly you are giving it to her, not a random stranger, purely to keep the property within your "family".

chaotic_j

Hi,

Just to update the thread I wrote to HMRC during lockdown requesting an extension to the 2 year deadline for claiming the additional property rate SDLT back.

On the basis I was unable to put the property up for sale or get any works carried out to it due to government decree, pleased to say they have changed the guidelines now and you can request a refund after the 2 year deadline - they will consider extenuating circumstances.

All the best.

SDLT_Geek

There are some details here https://forums.moneysavingexpert.com/discussion/6151893/sdlt-extension-of-the-three-year-time-limit-within-which-to-sell-a-previous-home about the extension for exceptional circumstances of the usual three year period within which an old home needs to be sold in order to be able to recover the extra 3% paid on the purchase of a new home.