Welsh land tax

Giddypip

Help needed please

I am selling my main property in England for £188,000.

I am part owner of another property that my Dad and 2 brothers live in (also England). I will remain part owner of this property.

I am buying a house in Wales for £170,000.

As I am selling my main residence to buy a new main residence, I don't think that I will be subject to the higher rate tax however, my solicitor thinks I will. They admit they are not experts and will do some research.

Can anyone confirm whether I would or would not have to pay the higher rate please?

Thanks

housebuyer143

Welcome to Wales! 👍
That's correct, if you are selling your main residence anywhere in the UK you will not be subject to the additional land tax.

user1977

Giddypip said:

As I am selling my main residence to buy a new main residence, I don't think that I will be subject to the higher rate tax however, my solicitor thinks I will. 

Have they explained why they think that? I'm not aware of the "replacing main residence" concession working differently in any of the UK jurisdictions (including moving between them).

Giddypip

user1977 said:

Giddypip said:

As I am selling my main residence to buy a new main residence, I don't think that I will be subject to the higher rate tax however, my solicitor thinks I will. 

Have they explained why they think that? I'm not aware of the "replacing main residence" concession working differently in any of the UK jurisdictions (including moving between them).

They said it's because I'm part owner of another house 

They are quoting this 

When the higher rates apply

You’ll usually pay higher LTT rates when both of the following apply:

• you buy a residential property worth £40,000 or more, and
• you already own 1 or more other properties (see below)

Include any residential property:

• you hold on behalf of children aged under 18 (parents are treated as owners, even if the property is held through a trust and they’re not the trustees)
• you’ve an interest in as the beneficiary of a trust

They said as I will still have an interest in the 2nd property, I will be liable. My interest in the 2nd property is worth less than £40,000 so I don't think I will be liable. I'm trying to find the part in the guidelines where I read that but I'm having trouble finding it again.

RAS

The value of your part share is not the issue.

What is relevant is that you are replacing your primary residence. Even a landlord who owns multiple properties is entitled to replace their primary residence without paying Land Tax.

If you were to sell your share in the "family home" and buy another property, you probably would be liable.

Tell the solicitor that you want to speak to a senior partner, or you will make a formal complaint.

Just for reference, with the reduction in relief, you may well get hit for CGT when you sell your part share.

SDLT_Geek

It is all explained in guidance here: https://www.gov.wales/higher-rates-purchases-residential-property-technical-guidance

It seems from what you say that the higher rates are not due because you meet the conditions for replacing your only or main residence.

housebuyer143

RAS said:

The value of your part share is not the issue.

What is relevant is that your are replacing your primary residence. Even a landlord who owns multiple properties is entitled to replace their primary residence without paying Land Tax.

If your were to sell your share in the "family home" and buy another property, you probably would be liable.

Tell the solicitor that you want to speak to a senior partner, or you will make a formal complaint.

Just for reference, with the reduction in relief, you may well get hit for CGT when you sell your part share.

This!

I bought a house even though I had a rental house but because I sold my main residence at the same time I didn't pay it. 
It's not a second home tax, it's a tax on buying an ADDITIONAL home. You have two now and you will still have two afterward. No additional land transaction tax is due.

Give the transaction tax department an email or call, unlike the English counterpart they answer in a few rings and are very very helpful. They will clear it up and the response could be forwarded to your solicitor.

https://www.gov.wales/welsh-revenue-authority/contact-us#:~:text=For customer queries about Land,Friday, 10am to 3pm).

Giddypip

Thank you for the responses, makes me more confident when speaking to the solicitor.

I emailed the Welsh Revenue Authority and they have confirmed that I won't be liable.

I'm aware of CGT, it was my dad's idea of avoiding care fees if needed. I tried to explain that the house would still be taken into account.