"Replacing an only or main residence" stamp duty exemption question

SDLT_Geek

There is a little guidance on the meaning of "main residence" here: https://www.gov.uk/hmrc-internal-manuals/stamp-duty-land-tax-manual/sdltm09812,  That explains "Merely occupying a property will not in itself make it a main residence.  There needs to be a permanence and expectation of continuation to the occupation to establish it as a main residence."

There is caselaw on the meaning of "residence" in the field of capital gains tax which OP should be able to find.
  
A particular problem in OP's case is that a property is unlikely to become a "residence" if it is being occupied "for fiscal purposes"; that is to gain a tax advantage.

We can all have opinions as to the fairness of a tax law, but the first thing is to establish how the rules apply to a given case.  Here their effect seems to be that OP will have to pay the extra 3%, whether that is fair or unfair.

AdrianC

littleirishboy said:

sorry I thought it was okay to have an opinion on the fairness of a tax law... maybe not on here.

Of course you can have an opinion.

There is a world of difference between holding an opinion, and expecting that opinion to carry any practical weight in the real world.

littleirishboy

thanks... in the words of the lowly ex federal reserve chairman (though I do paraphrase rather too much as indeed he did also)
I know you think you thought you understood what i meant but I am not sure you realise that what you read was not what I implied. 

I think you confused 'aghastness' (though rather naive aghastness as no one should be aghast when reading tax laws) with the belief I am right. I merely only decreed it as unlogical and unfair

AdrianC

littleirishboy said:

thanks... in the words of the lowly ex federal reserve chairman (though I do paraphrase rather too much as indeed he did also)
I know you think you thought you understood what i meant but I am not sure you realise that what you read was not what I implied. 

I think you confused 'aghastness' (though rather naive aghastness as no one should be aghast when reading tax laws) with the belief I am right. I merely only decreed it as unlogical and unfair

May I remind you of the words you used?

littleirishboy said:

Surely everyone (or couple) deserve the right to own one property at the lower rate of Stamp Duty? This seems to me to be fair?

littleirishboy said:

not my entitlement.. everyones? everyone should be able to own one house (only one) at the lower rate.

Whether it is logical or fair is irrelevant to whether it is established reality. No amount of messenger-shooting will change that.

littleirishboy

I am completely lost at how to discuss something on a discussion forum without stating my opinion.... very confused. I think, if what you say is true, that the law is quite illogical and unfair. an opinion like that, (well any opinion to be fair), cannot be wrong. Ergo I do think everyone is entitled to that, if they live in the UK (which I will do from July). I really don't see the problem with holding this opinion. Sorry if my shock sounded like shooting the messenger.

tacticalbanjo

My opinion is that the law is working in exactly the way it is intended. The second home SDLT is effectively an anti-BTL tax. It's supposed to both deter you from increasing the number of properties you own and incentivise living in one of the properties you own. They way it works is quite logical. You are being penalised for owning a property without living in it which is exactly how this was supposed to work.

littleirishboy

Which I agree with you on. I had no problem paying the higher rate for my second property in Birmingham bought as an investment. My first property I want to sell which was the property I paid the lower rate on when I bought it. I will be living in it once back to get settled then moving to be near my new work. I am not buying a property to use it as a BTL - I am buying a property to use entirely as my own residence. 

AdrianC

littleirishboy said:

Which I agree with you on. I had no problem paying the higher rate for my second property in Birmingham bought as an investment. My first property I want to sell which was the property I paid the lower rate on when I bought it. I will be living in it once back to get settled then moving to be near my new work. I am not buying a property to use it as a BTL - I am buying a property to use entirely as my own residence.

And that would grant you an exemption to the additional property rate...

If not for the minor detail that you are not selling your previous primary residence. You are buying an additional property.

littleirishboy

And that's the point I think the law is unfair. It means I have lost forever my right to a primary residence bought at the standard rate. Of course I know I can sell both my properties which we might end up doing.

You think that the law is fair here. I don't... Isn't discussion great. 

SpiderLegs

littleirishboy said:

And that's the point I think the law is unfair. It means I have lost forever my right to a primary residence bought at the standard rate. Of course I know I can sell both my properties which we might end up doing.

You think that the law is fair here. I don't... Isn't discussion great. 

Erm. No you havent