Higher Rate Stamp Duty

sheramber

You need to consider this  with regard to your husband not owning the house you are selling

https://www.gov.uk/hmrc-internal-manuals/stamp-duty-land-tax-manual/sdltm09812

and

https://www.gov.uk/guidance/stamp-duty-land-tax-buying-an-additional-residential-property

Who the higher rates apply to

You may have to pay the higher rates even if you intend to live in the property you’re buying (and regardless of whether or not you already own a residential property).

This is because the rules do not apply only to you (the buyer), but also to anyone you’re married to or buying with.

If you’re married or in a civil partnership

The rules apply to you both as if you were buying the property together, even if you’re not.

If either of you individually have to pay the higher rates, you must pay the higher rates for the transaction as a whole (unless you’re permanently separated).

user1977

Becksie11 said:

My husband will be paying half the mortgage but for the purpose of title deeds it will be alone to avoid higher rate stamp duty 

But as already explained, there isn't going to be higher rate stamp duty to avoid, because you're replacing your main residence. Who gave you the initial advice about this?

_Penny_Dreadful

donutandbeer said:

When did he buy the BTL and were you married at the time? If at the time he had paid higher stamp duty then you are now only replacing your main residence so it will be normal stamp duty. If at the time you were not married therefore he paid normal stamp duty when buying the BTL then it might be a different story. 

I believe in the UK if you are married then any property owned by either of you is seen as owned by both of you for stamp duty purpose. I had to pay normal stamp duty even though I was a first time buyer, because my husband was not a first time buyer, and it didn’t matter whose name is on the deed (obviously we have thought about just putting my name on the deed so we can have first time buyer stamp duty relief, but it wouldn’t work in the UK). 

SDLT only applies to England and Northern Ireland, not the whole of the UK. Scotland has LBTT and Wales has LTT. I'm less sure about the Welsh rules but I know in Scotland the LBTT for when the Additional Dwelling Supplement applies are not exactly the same as the rules for the higher rate of SDLT in England and Northern Ireland.

_Penny_Dreadful

From the Stamp Duty Land Tax Manual

A purchase of a major interest in a single dwelling by an individual will be a “higher rates transaction” and the higher rates of SDLT will apply to the purchase, if at the end of the day of purchase each of conditions A to D are met.

• Condition A - the chargeable consideration is £40,000 or more

• Condition B - the major interest purchased is not subject to a lease which has more than 21 years to run on the date of purchase

• Condition C - the purchaser owns a major interest (with a market value of £40,000 or more) in another dwelling which is not subject to a lease which has more than 21 years to run at the date of purchase of the new dwelling, and
• Condition D - the dwelling being purchased is not replacing the purchaser’s only or main residence.

You do not meet Condition D therefore the higher rate of SDLT would not apply if you used a regular joint mortgage where both you and your husband become legal owners of the new property. https://www.gov.uk/hmrc-internal-manuals/stamp-duty-land-tax-manual/sdltm09765

Becksie11

Thank you Penny your information is very much appreciated. We would quite happily have a joint mortgage etc but was advised this was the best way to go. 

sheramber

_Penny_Dreadful said:

From the Stamp Duty Land Tax Manual

A purchase of a major interest in a single dwelling by an individual will be a “higher rates transaction” and the higher rates of SDLT will apply to the purchase, if at the end of the day of purchase each of conditions A to D are met.

• Condition A - the chargeable consideration is £40,000 or more

• Condition B - the major interest purchased is not subject to a lease which has more than 21 years to run on the date of purchase

• Condition C - the purchaser owns a major interest (with a market value of £40,000 or more) in another dwelling which is not subject to a lease which has more than 21 years to run at the date of purchase of the new dwelling, and
• Condition D - the dwelling being purchased is not replacing the purchaser’s only or main residence.

You do not meet Condition D therefore the higher rate of SDLT would not apply if you used a regular joint mortgage where both you and your husband become legal owners of the new property. https://www.gov.uk/hmrc-internal-manuals/stamp-duty-land-tax-manual/sdltm09765

It is not that simple.

As the husband does not own the house being sold he is not selling his main residence. as explained in the link above.

But the fact they are married means they are treated a one , even if not buying together.

You may have to pay the higher rates even if you intend to live in the property you’re buying (and regardless of whether or not you already own a residential property).

This is because the rules do not apply only to you (the buyer), but also to anyone you’re married to or buying with.

You need to speak to someone who is knowledgeable about the ins and outs of the SDLT.

sammyjammy

If once you have sold the other house you will only have one property between you you won't pay the higher rate, married or not.

_Penny_Dreadful

sheramber said:

_Penny_Dreadful said:

From the Stamp Duty Land Tax Manual

A purchase of a major interest in a single dwelling by an individual will be a “higher rates transaction” and the higher rates of SDLT will apply to the purchase, if at the end of the day of purchase each of conditions A to D are met.

• Condition A - the chargeable consideration is £40,000 or more

• Condition B - the major interest purchased is not subject to a lease which has more than 21 years to run on the date of purchase

• Condition C - the purchaser owns a major interest (with a market value of £40,000 or more) in another dwelling which is not subject to a lease which has more than 21 years to run at the date of purchase of the new dwelling, and
• Condition D - the dwelling being purchased is not replacing the purchaser’s only or main residence.

You do not meet Condition D therefore the higher rate of SDLT would not apply if you used a regular joint mortgage where both you and your husband become legal owners of the new property. https://www.gov.uk/hmrc-internal-manuals/stamp-duty-land-tax-manual/sdltm09765

It is not that simple.

As the husband does not own the house being sold he is not selling his main residence. as explained in the link above.

But the fact they are married means they are treated a one , even if not buying together.

You may have to pay the higher rates even if you intend to live in the property you’re buying (and regardless of whether or not you already own a residential property).

This is because the rules do not apply only to you (the buyer), but also to anyone you’re married to or buying with.

You need to speak to someone who is knowledgeable about the ins and outs of the SDLT.

I'm not sure why you're saying it's not that simple when you then go on to confirm that the current home is also considered the husband's main residence for SDLT purposes meaning that Condition D is not met which is what I said.

_Penny_Dreadful

Becksie11 said:

Thank you Penny your information is very much appreciated. We would quite happily have a joint mortgage etc but was advised this was the best way to go. 

I'm sorry to hear you were badly advised.  If you don't mind me asking, who gave you this advice,  your mortgage broker or your solicitor?

SDLT_Geek

I am assuming the property being bought is in England, so the relevant rules are the stamp duty land tax rules.

There are special rules which mean that the husband can still come within the replacement exception, even though the home he has been living in is not owned by him at all, but is being sold by his spouse.  You will find this at SDLTM09800. https://www.gov.uk/hmrc-internal-manuals/stamp-duty-land-tax-manual/sdltm09800

The SDLT outcome is no different in this situation whether or not the husband is to have a beneficial interest in the new home.