Stamp duty following separation

AskAsk

Bookworm105 said:

AskAsk said:

SDLT_Geek said:

AskAsk said:

I called HMRC stamp duty helpline about my divorce and they said it would need to be formal before we are exempt.  That we would need to pay the extra stamp duty and then claim it back when the divorce is complete.

There are so many articles from solicitors on the net about tax on divorce that it isn't clear to me and I am not sure how much help you can get from the helpline either!

If I were in your position, I would consult a tax lawyer, who will be able to give you the definitive answer.

It seems to me the HMRC helpline have got it hopelessly wrong here!  That is not uncommon.

going through the divorce process at the moment and we are in the 20 weeks waiting period.  the problem is that until the divorce is final, you can change your mind at any time and abandon the divorce process, so I think this is why HMRC wants to see proof that we have actually got the divorce before you can avoid the extra stamp duty as otherwise people may pretend to be starting the process and actually never go through with it, to avoid the tax.

or they actually do abandon the process for one reason or another and HMRC wouldn't want to keep an eye on what is happening with someone's divorce to demand the extra stamp duty.  the tax man asks for the tax first and it is up to you to claim it back when you have proof that we are no longer a couple.

you are overlooking the fact that HMRC phone answerers are first and foremost call centre staff.
They are not technical experts and only "know" what it tells them on their screen in the few seconds they have to read it before having to reply to a caller.

It is a given that their answers are superficial and slanted to HMRC, not the letter of the tax law 

which is why you should consult a tax lawyer before you do anything.  he did put me on hold so he could go and look into it and consulted his manager before coming back with an answer.

he said that when you submit the stamp duty form, it asks who have you sold your property share to and if you are still the owner of your property, you can't sell to yourself.  so you need to have removed ownership of the property.  you don't have to pay extra stamp duty as such but the mechanics of this is through a reclaim once the divorce is final.

the solicitors i have spoken to also mentioned that they are not tax experts but that you pay the extra stamp duty and then claim it back.

i also saw an article from a lawyer website that said you should make sure the consent or financial order specifically state that the share of the matrimonial home transfer should be written in a certain way to make sure that you don't end up having to pay capital gains tax.

Bookworm105

AskAsk said:

Bookworm105 said:

AskAsk said:

SDLT_Geek said:

AskAsk said:

I called HMRC stamp duty helpline about my divorce and they said it would need to be formal before we are exempt.  That we would need to pay the extra stamp duty and then claim it back when the divorce is complete.

There are so many articles from solicitors on the net about tax on divorce that it isn't clear to me and I am not sure how much help you can get from the helpline either!

If I were in your position, I would consult a tax lawyer, who will be able to give you the definitive answer.

It seems to me the HMRC helpline have got it hopelessly wrong here!  That is not uncommon.

going through the divorce process at the moment and we are in the 20 weeks waiting period.  the problem is that until the divorce is final, you can change your mind at any time and abandon the divorce process, so I think this is why HMRC wants to see proof that we have actually got the divorce before you can avoid the extra stamp duty as otherwise people may pretend to be starting the process and actually never go through with it, to avoid the tax.

or they actually do abandon the process for one reason or another and HMRC wouldn't want to keep an eye on what is happening with someone's divorce to demand the extra stamp duty.  the tax man asks for the tax first and it is up to you to claim it back when you have proof that we are no longer a couple.

you are overlooking the fact that HMRC phone answerers are first and foremost call centre staff.
They are not technical experts and only "know" what it tells them on their screen in the few seconds they have to read it before having to reply to a caller.

It is a given that their answers are superficial and slanted to HMRC, not the letter of the tax law 

which is why you should consult a tax lawyer before you do anything.  he did put me on hold so he could go and look into it and consulted his manager before coming back with an answer.

he said that when you submit the stamp duty form, it asks who have you sold your property share to and if you are still the owner of your property, you can't sell to yourself.  so you need to have removed ownership of the property.  you don't have to pay extra stamp duty as such but the mechanics of this is through a reclaim once the divorce is final.

the solicitors i have spoken to also mentioned that they are not tax experts but that you pay the extra stamp duty and then claim it back.

i also saw an article from a lawyer website that said you should make sure the consent or financial order specifically state that the share of the matrimonial home transfer should be written in a certain way to make sure that you don't end up having to pay capital gains tax.

"or they are, in fact, separated in circumstances in which the separation is likely to be permanent"

The law: 
Finance Act 2003 schedule 4ZA part 3 para 9(3) https://www.legislation.gov.uk/ukpga/2003/14/schedule/4ZA/part/3

and

Section 1011 Income Tax Act 2007 https://www.legislation.gov.uk/ukpga/2007/3/section/1011

Discussions re CGT and separation is a different topic. There are clearly defined time limits which are much more important than a lawyer trying to sell their services to write something.