Stamp Duty Surcharge

penguin_sam

My wife and I are selling our current home. The house has been my only property for 20 years. My wife has two other properties which are let one used to be her only residence before we were married. I understand that we would be exempt from stamp duty surcharge if we buy a new main residence within 3 years due to condition D exemption SDLTM09800. What worries me is what happens if between selling our current home and buying a new one we stay temporarily in one of my wife's 2 rental properties (the property she lived in before we married ) Any ideas? What if we rented between selling and buying?

SDLT_Geek

penguin_sam said:

My wife and I are selling our current home. The house has been my only property for 20 years. My wife has two other properties which are let one used to be her only residence before we were married. I understand that we would be exempt from stamp duty surcharge if we buy a new main residence within 3 years due to condition D exemption SDLTM09800. What worries me is what happens if between selling our current home and buying a new one we stay temporarily in one of my wife's 2 rental properties (the property she lived in before we married ) Any ideas? What if we rented between selling and buying?

Staying in a pre-owned property in the meanwhile should not be a problem, despite the misleading HMRC guidance here: https://www.gov.uk/guidance/stamp-duty-land-tax-buying-an-additional-residential-property 

You are doing better looking at SDLTM09800, as you have done.  It would be unwise though to change the ownership of the rental property you are to live in temporarily, just in case you fall foul of Condition 5 in SDLTM09800: 
" 5 At no point between selling the old property and buying the new property had the purchaser (or the purchaser’s spouse or civil partner) acquired a major interest in another dwelling with the intention of the purchaser living in it as the purchaser’s main or only residence [Para 3(6) (d)]."

penguin_sam

That's what I thought. Who will I have to convince? My conveyancer? HMRC? 

SDLT_Geek

SDLT is self-assessed, so:
(a)  You need to be confident yourself
(b)  Your conveyancers cannot submit a return they know to be incorrect, so they will need to be happy.  Different firms vary as to how they approach this.
(c)  If HMRC open an enquiry into your return, you would then need to be able to demonstrate to them that you have correctly self assessed.  You might be up against someone who just refers to the incorrect .gov.uk guidance.  If so, you might need to refer them to the case study involving Katherine here: https://www.blakemorgan.co.uk/stamp-duty-land-tax-3-surcharge-case-study-on-replacement-of-only-or-main-residence/