Higher Rate Stamp Duty (LTT) - Separation

Gambler

I've just spent ages trying to find an answer.
So this extra tax was brought in to help young people buy houses by discouraging buy to lets.
I own a home jointly with my ex partner, we are not married. I moved out some time ago.I put our son first so they still live in the family home.
I have now saved enough to purchase my own home but looks like I am going to be penalised by having to pay over £10K in higher rate LTT. 
I manged to find the following but it relates to married couples:

However, what happens in a situation where a marriage or civil partnership has broken down and one of the partners wishes to purchase a new home before both their divorce or separation is finalised and what was formerly their main residence has been sold or transferred? It would seem unfair if such a purchase was subject to the higher rates of stamp duty for additional properties not least as those rates do not apply when a main residence is being replaced regardless of how many additional properties are owned at that time. Thankfully, HMRC will now accept that the higher rates of Stamp Duty Land Tax will not apply in such circumstances and before a divorce or separation agreement has been finalised, providing that the couple are separating in circumstances that are likely to be permanent.

Jeremy535897

Do you intend to retain your interest in the home you own jointly with your ex-partner? If you are, then I do not think that there is a solution to the problem you have identified. You do have three years to dispose of the interest in the jointly held home, and get a refund of SDLT. See https://www.gov.uk/guidance/stamp-duty-land-tax-buying-an-additional-residential-property

allconnected

Where are you in the UK? You mention LTT which  only applies To purchases in Wales, But then quote from HMRC’s guidance which only applies to purchase in England and Northern Ireland?

oldbikebloke

you are not married therefore it is very simple
you own a property you are not selling (disposing of)
you intend to purchase an ADDITIONAL property 
you will have to pay the ADDITIONAL PROPERTY RATE for obvious reasons 

(were you legally married the position would be different assuming there was a Mesher Order in place) 

Gambler

Thanks for the replies.  Yes I live in Wales so it is LTT and it costs more as there is no stamp duty holiday.
 I don't think I can even claim a refund as I moved out years ago so it is no longer my main residence.
Therefore I have two options, pay up or sell up!!

oldbikebloke

Gambler said:

Therefore I have two options, pay up or sell up!!

indeed
tax law is still biased towards that bit of paper that says you are married / civil partners. Without that the system would open to much argument over when is a couple a couple.

I appreciate you have done the right thing by your child, but sadly you get the raw end of that deal as you do not meet the conditions for being regarded as "separated" since you do not have one of the 4 required court orders regarding your "ex-together" home.

Separation of an unmarried couple is not a scenario that is covered in LTT law, you are deemed to be 2 individuals who are looked at individually, in which case you are buying an additional property as you retain ownership of another where your share is worth >£40k
https://gov.wales/higher-rates-purchases-residential-property-technical-guidance#section-5259