SDLT additional 3%

PaulCooper

I'd like a second opinion from one of the tax gurus on here regarding my liability to pay the additional 3% in the following circumstances.
We own 3 properties, one of which is our Primary Residence, we are about to sell the Primary Residence. If we buy another property within 2 years and nominate this new property as our Primary Residence, will we be liable for the additional 3% SDLT?---------- my understanding having looked through  SDLTM09810 - SDLT - higher rates for additional dwellings: Condition D - further examples, example 4 is that I would not be liable, but I'd like anther opinion from someone more knowledgeable than me please 
Many thanks
Paul

Jeremy535897

If you buy the new main residence before, or on the same day, as your new main residence, then you don't pay the higher rate. Otherwise, you pay it and then claim it back when the old main residence is sold:
https://www.gov.uk/guidance/stamp-duty-land-tax-buying-an-additional-residential-property

sheramber

I think the OP means he sells his primary residence but does not buy replacement  for two years. Presumably lives elsewhere for these two years.

 

Keep_pedalling

Accor according to this other thread the OP plans to make their holiday home their primary residence after the sale.

https://forums.moneysavingexpert.com/discussion/6297319/when-to-nominate-holiday-home-as-primary-residence#latest

PaulCooper

Sorry, should have made it clearer, when we sell our Primary Residence, we will live elsewhere for a period of time (in our holiday home)------------ it's a mathematical toss up. do we nominate the holiday home as our Primary Residence, or do we nominate a new purchase as our Primary Residence
Thanks for input will read links
Paul 

Jeremy535897

When you sell your current main residence, the holiday home then becomes your main residence (but see below). When you buy the new home, the higher rate applies, unless you sell the holiday home on or before the date you buy the new home. If you don't, then the higher rate can be refunded if you sell the holiday home within three years. There is no nomination process with stamp duty:

"You cannot as with other taxes, select a property from your ownership and elect for this to be your main residence. If the individual only lives at one residence then that will be his main residence. If he lives at more than one residence then all the facts and circumstances have to be looked at, though it is accepted this is not necessarily simply where they spend the majority of their time, but is an objective test based on the facts. The guidance sets out the following as an non exhaustive but useful list of points to consider:

• If the individual is married or in a civil partnership, where does the family spend its time?
• If the individual has children, where do they go to school?
• At which residence is the individual registered to vote?
• Where is the individual’s place of work? How is each residence furnished?
• Which address is used for correspondence? Where is the individual registered with a doctor / dentist?
• At which address is the individual’s car registered and insured?
• Which address is the main residence for council tax?

The old main residence will count as such if it is the individuals main residence at the point of sale, or at some time during the period of 3 years before the purchase (subject as below).

On sale it is a matter of fact as to whether it is the main residence. On the purchase the buyer must intend to occupy this as his main residence. The fact that works are required first which prevent immediate occupation would not prevent the intention test being met."

From https://wards.uk.com/news/penalty-stamp-duty-rate-main-residence-exception/

PaulCooper

Hi Jeremy
Thanks for the detailed explanation, OK no playing with nominating Primary Residence then! I was thinking the reduction in CGT when selling the holiday property would outweigh the advantage of not paying the additional 3%, no need to do the calcs now as there is no choice.
Thanks again, I was wrong in my original thinking
Regards
Paul 

SDLT_Geek

There is no ability to "nominate" a main residence for stamp duty land tax purposes.  There can be one for CGT, but those rules are not carried through.  For SDLT it is a factual test, with no election available.

But if, on the purchase of the new property, OP intends to live in it as his only or main residence, then I do not see why the five conditions set out in SDLTM09800 cannot still be met, even if another property has become a main residence in the meantime (with its ownership unchanged).

The five conditions can be found here: https://www.gov.uk/hmrc-internal-manuals/stamp-duty-land-tax-manual/sdltm09800 

PaulCooper

SDLT_Geek, thanks for that, I've had a good look through the conditions you sent the link for & it looks as though we would fill all 5 requirements. I accept the fact a 'nomination can't be made, but the wording in the first condition looks to me as if it's where we say it'll be, OK things such as bank accounts, doctors etc etc have to be changed, but they're all electronic. I'd like Jeremy's opinion on that 'curved ball'
Paul 

Jeremy535897

It may make things clearer to establish and confirm some more facts. You currently own three properties. The first of these is factually your main residence for stamp duty now. You are selling that. You are moving into your second property, currently a holiday home, presumably not let out. There is no stamp duty so far, as you haven't bought a new property, but you intend to do so, and that new property will become your factual main residence, and the second property will revert to being your holiday home. Is this correct?

The following questions arise:

• what purpose does your third property have, and will you ever live in it?
• are you intending to rent somewhere as a main residence, or will you stay in the holiday home until you buy a new main residence?

I welcome other opinions on this, but if you will only occupy the holiday home as your residence until a new main residence is purchased, then it seems inevitable that the holiday home must become your main residence, but that is irrelevant, unless you also plan to sell that property. Assuming you do not, then you have to buy the new main residence within three years of selling the old main residence, assuming it is occupied as your main residence up to the date of sale.

PaulCooper

Hello Jeremy
Answers below
It may make things clearer to establish and confirm some more facts. You currently own three properties. The first of these is factually your main residence for stamp duty now. You are selling that. You are moving into your second property, currently a holiday home, presumably not let out. There is no stamp duty so far, as you haven't bought a new property, but you intend to do so, and that new property will become your factual main residence, and the second property will revert to being your holiday home. Is this correct?
Yes all correct

• Our third property is a holiday home, we will never live in it
• We will stay/commute between both holiday properties

 but if you will only occupy the holiday home as your residence until a new main residence is purchased, then it seems inevitable that the holiday home must become your main residence, Agreed but that is irrelevant, unless you also plan to sell that property We do not. Assuming you do not, then you have to buy the new main residence within three years of selling the old main residence, assuming it is occupied as your main residence up to the date of sale It will be

Thanks for putting time into answering this
Paul