Another tedious stamp duty question....Zzzzz

demontfort

Hello,

As per the title, I have a stamp duty question. I own two properties:

• Flat in bought by just myself in 2014
• House bought with my wife in 2020 on which I paid the second home stamp duty surcharge 

I am considering selling the flat and buying a different flat . I want to know if I'd have to pay the second home stamp duty surcharge again on the new flat?

Thanks,

DM

theartfullodger

And probably CGT...

demontfort

CGT will be chickenfeed compared to the stamp duty.

SDLT_Geek

demontfort said:

Hello,

As per the title, I have a stamp duty question. I own two properties:

• Flat in bought by just myself in 2014
• House bought with my wife in 2020 on which I paid the second home stamp duty surcharge 

I am considering selling the flat and buying a different flat . I want to know if I'd have to pay the second home stamp duty surcharge again on the new flat?

Thanks,

DM

In my book Stamp Duty is never tedious!

Will you be buying in England so that the relevant stamp duty is stamp duty land tax?

Where have you both been living (as your only or main residence)? In the flat or in the house?

If in the flat will you then both be living in the property you buy? 

silvercar

In order to avoid SDLT on the new flat, you are both going to have to move into the old flat and make it your principal residence. Then sell it and buy the new flat and move into that as your PPR. Otherwise it counts as a second home and the extra SDLT is payable.

demontfort

SDLT_Geek said:

demontfort said:

Hello,

As per the title, I have a stamp duty question. I own two properties:

• Flat in bought by just myself in 2014
• House bought with my wife in 2020 on which I paid the second home stamp duty surcharge 

I am considering selling the flat and buying a different flat . I want to know if I'd have to pay the second home stamp duty surcharge again on the new flat?

Thanks,

DM

In my book Stamp Duty is never tedious!

Will you be buying in England so that the relevant stamp duty is stamp duty land tax?

Where have you both been living (as your only or main residence)? In the flat or in the house?

If in the flat will you then both be living in the property you buy? 

Thanks for your reply and I can see by your name that you are a stamp duty afficionado

I will be buying in England. I have been splitting my time between both properties (so have bills in my name for both) but the house has been the main residence since Covid.

The situation would continue if I were to buy the new flat with both of us splitting time between both.

demontfort

silvercar said:

In order to avoid SDLT on the new flat, you are both going to have to move into the old flat and make it your principal residence. Then sell it and buy the new flat and move into that as your PPR. Otherwise it counts as a second home and the extra SDLT is payable.

Thanks for the advice, I'll have to think long and hard about the whole plan as I can move to the old and then the new flat and make it my residence but the wife may not be so keen.

sheramber

demontfort said:

SDLT_Geek said:

demontfort said:

Hello,

As per the title, I have a stamp duty question. I own two properties:

• Flat in bought by just myself in 2014
• House bought with my wife in 2020 on which I paid the second home stamp duty surcharge 

I am considering selling the flat and buying a different flat . I want to know if I'd have to pay the second home stamp duty surcharge again on the new flat?

Thanks,

DM

In my book Stamp Duty is never tedious!

Will you be buying in England so that the relevant stamp duty is stamp duty land tax?

Where have you both been living (as your only or main residence)? In the flat or in the house?

If in the flat will you then both be living in the property you buy? 

Thanks for your reply and I can see by your name that you are a stamp duty afficionado

I will be buying in England. I have been splitting my time between both properties (so have bills in my name for both) but the house has been the main residence since Covid.

The situation would continue if I were to buy the new flat with both of us splitting time between both.

A married couple can only have one main  residence.

https://www.gov.uk/hmrc-internal-manuals/capital-gains-manual/cg64525#:~:text=S222(6)%20TCGA92%20sets%20out,purpose%20of%20private%20residence%20relief.

SDLT_Geek

demontfort said:

silvercar said:

In order to avoid SDLT on the new flat, you are both going to have to move into the old flat and make it your principal residence. Then sell it and buy the new flat and move into that as your PPR. Otherwise it counts as a second home and the extra SDLT is payable.

Thanks for the advice, I'll have to think long and hard about the whole plan as I can move to the old and then the new flat and make it my residence but the wife may not be so keen.

Given that the house is jointly owned, for the purchase of the replacement flat to escape the 5% surcharge, the old flat will need to have been the main residence of both of you and you would both have to intend to live in the new flat as your main residence.

Bookworm105

just bear in mind if deciding to follow the lets live in it before selling advice, there is a very subjective list of criteria used to assess if it was a change of home for necessary/genuine reasons or just an attempt at tax avoidance 

whilst length of time lived there is never the deciding factor, it is something which a computer would flag for review by a human were you to sell a few months after changing "home".

SDLTM09812 - SDLT - higher rates for additional dwellings: Meaning of 'main residence' - HMRC internal manual - GOV.UK

CG64427 - Private residence relief: only or main residence: meaning of residence - HMRC internal manual - GOV.UK

CG64545 - Private residence relief: two or more residences: no valid notice made - HMRC internal manual - GOV.UK