Want to divorce, buy own place & stamp duty

SDLT_Geek

Bookworm105 said:

SDLT_Geek said:

Bookworm105 said:

SDLT_Geek said:

Bookworm105 said:

SDLT_Geek said:

Here are some thoughts on the Stamp Duty aspect.

If the property you buy is in England then the relevance stamp duty is stamp duty land tax.

If you simply go ahead and buy a property while still owning a half share in the matrimonial home, then the extra 3% SDLT would be due. It would not be repayable by virtue of you getting divorced within three years, but might well be repayable if the former matrimonial home is sold within three years.

If, rather than just going ahead and buying the property, you get further with matrimonial proceedings and get a “property adjustment order” which is for the benefit of your spouse in respect of the existing matrimonial home, and then you buy a new property after that, then the 3% extra should not be due on the purchase. 

@sdlt_geek
when does the additional rate not apply given legislation (FA 2003 sch 3 (3) d) appears to allow for additional rate exemption "in pursuance", so before the paperwork is actually in place?
Finance Act 2003 (legislation.gov.uk)

The exemption in FA 2003 / Schedule 3 / para 3(d), (concerning a transaction in contemplation in divorce before all the paperwork for the divorce is in place) where it applies, is a total exemption from SDLT.  But that only applies for transactions between the parties to a marriage.  That is not the issue here.

@sdlt_geek
thanks, but still confused by your answer as the OP is married and appears to be starting the divorce stage.

Yes, this is complicated.  The scenario, as I understand it is, as you say, that OP is married and is now looking to divorce.  The matrimonial home is jointly owned and that will remain the case, as neither can buy the other out.  OP is looking to buy another property to live in.

The complete exemption in Sch3/para3 is not in point: there is not to be any transfer between the spouses.

As things stand though, when OP buys another property to live in, OP will have to pay the higher rates of SDLT (presently an extra 3%), because OP still has a share in the matrimonial home.  So OP would be buying an additional property and not meet the conditions for replacing their main residence.  My point was that if OP delays buying a new home until there is a "property adjustment order" in divorce proceedings, then OP should be able to escape the extra 3% SDLT.

must admit I find OP's wall of text hard to follow.
OP is married to him
neither OP nor him can afford to buy each other out
it appears that OP will move out and use own cash to buy a place for herself whilst apparently remaining 50/50 owner of the martial home.

A divorce is underway, but it is unclear what the financial settlement will be in respect of her share of the house since the only mention is the throwaway comment "we would just agree to split the house.. down the middle". But how since he cannot buy out her share?

So the replacement rule will never be triggered and no "transaction" takes place in respect of the property as per opening sentence of FA 2003 sch 3 (3)?
But in the meantime they are leading up to a court order and thus surely are at the stage of "in pursuance of an agreement of the parties made in contemplation or otherwise in connection with the dissolution or annulment of the marriage"

 Your text in bold would only be relevant if there is to be a transaction between the parties to the marriage.

That is not what we are asked to consider.  We are asked to help on the SDLT OP would have to pay on buying a property from an unrelated third party.