SDLT - Replacement of main residence

GDB2222

I previously posted about the 5% SDLT surcharge applying to Alan and Beth.
https://forums.moneysavingexpert.com/discussion/6563665/sdlt-avoid-3-surcharge/p1

I've been musing about the possibility of Alan acquiring a very, very short lease property as his main residence, with a view to his then being able to sell it when he and Beth buy somewhere together. 

Of course, he would need to move in and treat it as his main home. HMRC helpfully make some comments, as follows:

The following list of points to consider, although not exhaustive, may be useful in establishing which residence is an individual’s main residence,

• If the individual is married or in a civil partnership, where does the family spend its time?
• If the individual has children, where do they go to school?
• At which residence is the individual registered to vote?
• Where is the individual’s place of work?
• How is each residence furnished?
• Which address is used for correspondence?
• Where is the individual registered with a doctor / dentist?
• At which address is the individual’s car registered and insured?
• Which address is the main residence for council tax?

Merely occupying a property will not in itself make it a main residence. There needs to be a permanence and expectation of continuation to the occupation to establish it as a main residence.

Those comments seem to be based on an old Capital Gains Tax case.

There's presumably no way of knowing whether a particular residence passes the test? 

Bookworm105

no, as above, it is a subjective assessment of the quality of occupation of the property using criteria established in numerous test cases 

perhaps you should get a better textbook if you want to explore countless hypothetical questions 

bobster2

GDB2222 said:

I previously posted about the 5% SDLT surcharge applying to Alan and Beth.
https://forums.moneysavingexpert.com/discussion/6563665/sdlt-avoid-3-surcharge/p1

I've been musing about the possibility of Alan acquiring a very, very short lease property as his main residence, with a view to his then being able to sell it when he and Beth buy somewhere together. 

Of course, he would need to move in and treat it as his main home.

As you indicated in your other thread - Alan owns an investment property.

So if he buys a short lease property - he has to pay the higher rate of SDLT on that because he's buying an additional property.

So "Alan" wants to pay SDLT (and solicitor's fees etc) on this property - to avoid paying SDLT on another one?

silvercar

bobster2 said:

GDB2222 said:g

I previously posted about the 5% SDLT surcharge applying to Alan and Beth.
https://forums.moneysavingexpert.com/discussion/6563665/sdlt-avoid-3-surcharge/p1

I've been musing about the possibility of Alan acquiring a very, very short lease property as his main residence, with a view to his then being able to sell it when he and Beth buy somewhere together. 

Of course, he would need to move in and treat it as his main home.

As you indicated in your other thread - Alan owns an investment property.

So if he buys a short lease property - he has to pay the higher rate of SDLT on that because he's buying an additional property.

So "Alan" wants to pay SDLT (and solicitor's fees etc) on this property - to avoid paying SDLT on another one?

Would make senses if the stop gap property was 80k and the larger property was 800k.

The snag may be finding a buyer for this short lease cheap property in order to complete the sale at the same time as the new purchase. It also needs to be somewhere that Alan could convincingly live in for the duration, so location needs to be considered.

user1977

Not very convincing when you’ve told us from the outset that the intention is tax avoidance.

GDB2222

user1977 said:

Not very convincing when you’ve told us from the outset that the intention is tax avoidance.

This is a thought experiment, and also planning for the future.  

I rather expected to get some stick for asking about this, and actually people have been pretty restrained!