Additional Stamp Duty - Reclaim

alex021976

In August 2020, we moved out of residential property 1 to residential property 2, whilst still owning residential property 1 – this resulted in us having to pay the additional 3% SD.  We sold residential property 1 a couple weeks ago meaning we now own just 1 residential property and in theory Im assuming we could claim back the additional surcharge? 

In about a month we will be buying residential property 3, without selling residential 2 – which will result in paying an additional 3% SD.   

If we then decide to sell residential property 2 in a couple of months, does that mean we can reclaim back the additional 3% SD on the purchase of Residential Property 3? 

Also can we also claim back the additional SD on Residentail Property 2 in the knowledge we will be buying residential property 3 in in a matter of weeks?

SDLT_Geek

alex021976 said:

In August 2020, we moved out of residential property 1 to residential property 2, whilst still owning residential property 1 – this resulted in us having to pay the additional 3% SD.  We sold residential property 1 a couple weeks ago meaning we now own just 1 residential property and in theory Im assuming we could claim back the additional surcharge?

That sounds right in principle, though one of the conditions is that when you bought property 2 you intended to live in it as your only or main residence. 

In about a month we will be buying residential property 3, without selling residential 2 – which will result in paying an additional 3% SD.   

Yes, I would expect the extra 3% to be due on the basis that if the sale of property 1 entitles you to reclaim the extra 3% on property 2, you cannot use that sale of property 1 to help you escape the 3% extra on property 3.

If we then decide to sell residential property 2 in a couple of months, does that mean we can reclaim back the additional 3% SD on the purchase of Residential Property 3? 

That sounds right in principle, though one of the conditions is that you have lived in property 2 as your only or main residence.  Another is that you intend to live in property 3 as your only or main residence.

Also can we also claim back the additional SD on Residentail Property 2 in the knowledge we will be buying residential property 3 in in a matter of weeks?

Yes, in principle.

I have put notes above of what is likely to be the position, you can check the detailed conditions in the HMRC Stamp Duty Land Tax Manual at SDLTM09800.

A key point is that you bought property 2 intending to live in it as your only or main residence.  That needs "a sufficient degree of permanence and expectation of continuity".  That might be lacking if property 2 was just a stop gap measure.