Do we need to pay the higher stamp duty land tax in our situation?

patothe1st

We are a married couple, I currently own our home in my name only which is our main residence, I am ibn the process of selling this house and have an offer accepted on a new home which we plan to buy together jointly. My wife co-owns a buy to let property with her brother, which they purchased 18 months ago and paid the higher stamp duty tax on that property.

When buying our new home, she will still co-own the buy to let property, but her main residence will be with ours.

Can anyone advise on whether we are liable to pay the higher tax or the lower? I've read conflicting information.

stig

Nope you won’t. You’ll both meet the ‘replacing your main residence’ exception from the higher rate surcharge -

you because you are actually replacing your main residence I.e. selling one property and buying another, and

your wife because she meets the condition that she lived in the previous main residence and her spouse or civil partner is selling it.

look at example one here https://www.gov.uk/hmrc-internal-manuals/stamp-duty-land-tax-manual/sdltm09810 - I think it matches your situation exactly. Just remember that to avoid the higher rate you need to “fail” the tests, not “pass” them!

TheJP

stig said:

Nope you won’t. You’ll both meet the ‘replacing your main residence’ exception from the higher rate surcharge -

you because you are actually replacing your main residence I.e. selling one property and buying another, and

your wife because she meets the condition that she lived in the previous main residence and her spouse or civil partner is selling it.

look at example one here https://www.gov.uk/hmrc-internal-manuals/stamp-duty-land-tax-manual/sdltm09810 - I think it matches your situation exactly. Just remember that to avoid the higher rate you need to “fail” the tests, not “pass” them!

Is that right? The wife wont be replacing her main residence as she owns another property but not on the deeds of OP house, therefore she is buying a second home not replacing main residence. I could be wrong but i think from my limited knowledge the wife and her other property are the issue not the OP.

simon_or

No surcharge in this case as you're married, she's been living in the house and you (even though it's in your sole name) are replacing your main residence.

If you were unmarried partners, the 3% surcharge would apply.

simon_or

TheJP said:

stig said:

Nope you won’t. You’ll both meet the ‘replacing your main residence’ exception from the higher rate surcharge -

you because you are actually replacing your main residence I.e. selling one property and buying another, and

your wife because she meets the condition that she lived in the previous main residence and her spouse or civil partner is selling it.

look at example one here https://www.gov.uk/hmrc-internal-manuals/stamp-duty-land-tax-manual/sdltm09810 - I think it matches your situation exactly. Just remember that to avoid the higher rate you need to “fail” the tests, not “pass” them!

Is that right? The wife wont be replacing her main residence as she owns another property but not on the deeds of OP house, therefore she is buying a second home not replacing main residence. I could be wrong but i think from my limited knowledge the wife and her other property are the issue not the OP.

By virtue of being married, she meets the main residence replacement conditions as well. If they were unmarried, she wouldn't.

TheJP

simon_or said:

TheJP said:

stig said:

Nope you won’t. You’ll both meet the ‘replacing your main residence’ exception from the higher rate surcharge -

you because you are actually replacing your main residence I.e. selling one property and buying another, and

your wife because she meets the condition that she lived in the previous main residence and her spouse or civil partner is selling it.

look at example one here https://www.gov.uk/hmrc-internal-manuals/stamp-duty-land-tax-manual/sdltm09810 - I think it matches your situation exactly. Just remember that to avoid the higher rate you need to “fail” the tests, not “pass” them!

Is that right? The wife wont be replacing her main residence as she owns another property but not on the deeds of OP house, therefore she is buying a second home not replacing main residence. I could be wrong but i think from my limited knowledge the wife and her other property are the issue not the OP.

By virtue of being married, she meets the main residence replacement conditions as well. If they were unmarried, she wouldn't.

Thanks, every day's a school day.

patothe1st

Thanks everyone, a positive response so far, and not the one from my solicitor after a very quick phone call with them.

SDLT_Geek

stig said:

Nope you won’t. You’ll both meet the ‘replacing your main residence’ exception from the higher rate surcharge -

you because you are actually replacing your main residence I.e. selling one property and buying another, and

your wife because she meets the condition that she lived in the previous main residence and her spouse or civil partner is selling it.

look at example one here https://www.gov.uk/hmrc-internal-manuals/stamp-duty-land-tax-manual/sdltm09810 - I think it matches your situation exactly. Just remember that to avoid the higher rate you need to “fail” the tests, not “pass” them!

A good reply!