Stamp duty holiday ?

SDLT_Geek

The issues with the temporary reduction in SDLT are considered here: https://www.blakemorgan.co.uk/stamp-duty-land-tax-holiday/ in some detail.

CP03

Hi all, I have a question on additional stamp duty tax which for some reason, every HRMC advisor I speak to, tells me something different!

My wife and I got married in 2018. She had 2 buy to lets and a residential mortgage (main residence) and I also had a residential mortgage (main residence). After marriage, she moved into my main residence however continued to pay the mortgage on her residential property as her mum also lived there (and can't get a mortgage due to age). I sold my property late 2018 so we went from 4 to 3. This was our main residence.

My wife continues to pay the mortage for her property while her mum lives there but we are now looking to buy a new property to replace the main residence we sold.

Would we be liable to pay additional stamp duty or would the standard rate apply? We spoke to HMRC  today and the advisor explained we wouldn't be liable  providing we can prove I disposed of that main residence and sold to an independent buyer and also satisfactorily prove to HMRC that my wife also lived there. Both things we can prove.

Another HMRC advisor stated because we started with 4 and then went down to 3 and are now going back to 4, the additional tax does not apply.

Another advisor said we are liable because my wife still has a property in her name which she continues to pay the mortage for.

No one can give a definitive answer however we want to avoid the risk of HMRC coming back to us 6 month laters stating we've avoided paying additional tax and then demand we pay and not to mention potential fines!

Sibbers123

CP03 said:

Hi all, I have a question on additional stamp duty tax which for some reason, every HRMC advisor I speak to, tells me something different!

My wife and I got married in 2018. She had 2 buy to lets and a residential mortgage (main residence) and I also had a residential mortgage (main residence). After marriage, she moved into my main residence however continued to pay the mortgage on her residential property as her mum also lived there (and can't get a mortgage due to age). I sold my property late 2018 so we went from 4 to 3. This was our main residence.

My wife continues to pay the mortage for her property while her mum lives there but we are now looking to buy a new property to replace the main residence we sold.

Would we be liable to pay additional stamp duty or would the standard rate apply? We spoke to HMRC  today and the advisor explained we wouldn't be liable  providing we can prove I disposed of that main residence and sold to an independent buyer and also satisfactorily prove to HMRC that my wife also lived there. Both things we can prove.

Another HMRC advisor stated because we started with 4 and then went down to 3 and are now going back to 4, the additional tax does not apply.

Another advisor said we are liable because my wife still has a property in her name which she continues to pay the mortage for.

No one can give a definitive answer however we want to avoid the risk of HMRC coming back to us 6 month laters stating we've avoided paying additional tax and then demand we pay and not to mention potential fines!

Where have you been living since 2018 and the disposal of your main residence?

CP03

We have been living with her mum in my wife's property. The issue is we cannot sell/dispose of it as my wife's mum lives there and would not be able to buy another home.

SDLT_Geek

CP03 said:

Hi all, I have a question on additional stamp duty tax which for some reason, every HRMC advisor I speak to, tells me something different!

My wife and I got married in 2018. She had 2 buy to lets and a residential mortgage (main residence) and I also had a residential mortgage (main residence). After marriage, she moved into my main residence however continued to pay the mortgage on her residential property as her mum also lived there (and can't get a mortgage due to age). I sold my property late 2018 so we went from 4 to 3. This was our main residence.

My wife continues to pay the mortage for her property while her mum lives there but we are now looking to buy a new property to replace the main residence we sold.

Would we be liable to pay additional stamp duty or would the standard rate apply? We spoke to HMRC  today and the advisor explained we wouldn't be liable  providing we can prove I disposed of that main residence and sold to an independent buyer and also satisfactorily prove to HMRC that my wife also lived there. Both things we can prove.

Another HMRC advisor stated because we started with 4 and then went down to 3 and are now going back to 4, the additional tax does not apply.

Another advisor said we are liable because my wife still has a property in her name which she continues to pay the mortage for.

No one can give a definitive answer however we want to avoid the risk of HMRC coming back to us 6 month laters stating we've avoided paying additional tax and then demand we pay and not to mention potential fines!

You position is fairly similar to Katherine's in this case study: https://www.blakemorgan.co.uk/stamp-duty-land-tax-3-surcharge-case-study-on-replacement-of-only-or-main-residence/  I do not mean the bits in that about the "three year rule" (the three year rules do apply to you) but the bit about it not having to be your "latest" main residence which is sold.  It is vital though that your wife lived in the property sold in 2018 as her "only or main residence".  Did she live there with the "sufficient degree of permanence and expectation of continuity"?

CP03

Thank you for your responses. Really appreciate it.

Yes, she moved into my property with a degree of permanence and expectation that we would continue to live there. A year later, we then made a decision to sell that property so we could save given she already had a mortage and it was not cost effective and therefore we sold my property.

jaxkesa

faisalq said:

hazyjo said:

There are similar threads. I'm out sure I understand as you're surely still paying the same? Does it matter who is paying your stamp duty, so long as its not you?

It does matter because I agreed on the asking price if builder pays 18K stamp duty which means 18k saving for me. Now the stamp duty is hardly 4k which means 14k should be discounted from the price. The stamp duty relief is to benefit buyers not the builders. One of the builder is honoring this, just got to know from someone I know.

You've still saved £18,000 haven't you? The builder doesn't need to pay you £14,000 because the government have changed the rules around stamp duty.

faisalq

jaxkesa said:

faisalq said:

hazyjo said:

There are similar threads. I'm out sure I understand as you're surely still paying the same? Does it matter who is paying your stamp duty, so long as its not you?

It does matter because I agreed on the asking price if builder pays 18K stamp duty which means 18k saving for me. Now the stamp duty is hardly 4k which means 14k should be discounted from the price. The stamp duty relief is to benefit buyers not the builders. One of the builder is honoring this, just got to know from someone I know.

You've still saved £18,000 haven't you? The builder doesn't need to pay you £14,000 because the government have changed the rules around stamp duty.

 Seems like you represent one of the builders who wants to benefit from the situation although the incentive is for customers. Kindly share something useful if you have. Barratt is honoring stamp duty incentive to its customers already.

DllyP

Just wondering if anyone here had to raise a claim against their builder for not honoring the terms of their exchanged contract.

bolwin1

DllyP said:

Just wondering if anyone here had to raise a claim against their builder for not honoring the terms of their exchanged contract.

Can I suggest you post this as a new topic with a bit more information as it will get lost on the back of this unrelated 3 year old thread. You'll be much more likely to get a useful response that way.