Stamp duty reclaim - if property owned/sold is not main residence

bestofboth333

Hello,

I'm wondering if there's anyone who has any experience with the following situation...

My partner and I each owned a flat before we met - i moved into his flat over a year ago and am currently letting mine out. We have plans to buy a house together and sell both of our flats but the sale of my flat will likely take place after the purchase, so we'd be subject to the second home SDLT on the house (i actually intended to sell up a few months ago when the increase to second home SDLT was announced but my tenants all but begged me not to as they're so happy there and they're brilliant tenants so I don't want to rush them out if no need to...)

Assuming my partner's flat is sold in the process of us buying a house, we'd still have to pay the second home stamp duty as at that point I would own 2 properties.

What I'd like to know is, if I sold my flat within 3 years of the sale, would we be eligible to reclaim the additional second home SDLT? Or would we be ineligible, as my flat is not currently my main residence?

Any information would be much appreciated!

p00hsticks

bestofboth333 said:

Hello,

I'm wondering if there's anyone who has any experience with the following situation...

My partner and I each owned a flat before we met - i moved into his flat over a year ago and am currently letting mine out. We have plans to buy a house together and sell both of our flats but the sale of my flat will likely take place after the purchase, so we'd be subject to the second home SDLT on the house (i actually intended to sell up a few months ago when the increase to second home SDLT was announced but my tenants all but begged me not to as they're so happy there and they're brilliant tenants so I don't want to rush them out if no need to...)

Assuming my partner's flat is sold in the process of us buying a house, we'd still have to pay the second home stamp duty as at that point I would own 2 properties.

What I'd like to know is, if I sold my flat within 3 years of the sale, would we be eligible to reclaim the additional second home SDLT? Or would we be ineligible, as my flat is not currently my main residence?

Any information would be much appreciated!

Assuming that you are buying the new property in both names, I don't believe you would be able to claim it back -as you say your flat is not your main residence. 

Bookworm105

I assume you are not legally married.
You are correct that the higher rate will apply to the new joint purchase.

as you have no legal interest in his (by then sold) property, you will be entitled to a refund as you would be replacing your own main home if sold within 3 years of completing the purchase of the new joint owned 

example 2 sort of covers it by implication, "you" are treated as separate people and thus refund is triggered only when both of you meet the replacement of main home criteria.
SDLTM09810 - SDLT - higher rates for additional dwellings: Condition D - further examples - HMRC internal manual - GOV.UK

SDLT_Geek

bestofboth333 said:

Hello,

I'm wondering if there's anyone who has any experience with the following situation...

My partner and I each owned a flat before we met - i moved into his flat over a year ago and am currently letting mine out.
It sounds as you had been living in your flat as your residence until you moved into his flat, so within the last three years.
We have plans to buy a house together and sell both of our flats but the sale of my flat will likely take place after the purchase, so we'd be subject to the second home SDLT on the house
Yes, assuming you and your partner are not married or in a civil partnership by the time he sells his flat.

 (i actually intended to sell up a few months ago when the increase to second home SDLT was announced but my tenants all but begged me not to as they're so happy there and they're brilliant tenants so I don't want to rush them out if no need to...)

Assuming my partner's flat is sold in the process of us buying a house, we'd still have to pay the second home stamp duty as at that point I would own 2 properties.
Yes, though it might be different if you are married or civil partners as mentioned above.

What I'd like to know is, if I sold my flat within 3 years of the sale, would we be eligible to reclaim the additional second home SDLT? Or would we be ineligible, as my flat is not currently my main residence?
See below
Any information would be much appreciated!

See generally the text in bold above.

It seems as you will meet all of the four conditions set out in the guidance here https://www.gov.uk/hmrc-internal-manuals/stamp-duty-land-tax-manual/sdltm09800 if you sell your flat within three years of the joint purchase of your new home.  If so, then the extra 5% SDLT can be recovered when you sell your flat.

bestofboth333

Bookworm105 said:

I assume you are not legally married.
You are correct that the higher rate will apply to the new joint purchase.

as you have no legal interest in his (by then sold) property, you will be entitled to a refund as you would be replacing your own main home if sold within 3 years of completing the purchase of the new joint owned 

example 2 sort of covers it by implication 

Thanks Bookworm105. This is really helpful - the example perfectly describes our situation (with me being Mr P in this case - you're correct that we're unmarried..)

I definitely see what you're saying about this seemingly implying that HMRC would potentially still view MY flat as my main residence. However, I wonder if there's somewhere this is stated more explicitly? There's potentially thousands of ££s at stake so I'm a bit nervous to take this as confirmation!

bestofboth333

SDLT_Geek said:

bestofboth333 said:

Hello,

I'm wondering if there's anyone who has any experience with the following situation...

My partner and I each owned a flat before we met - i moved into his flat over a year ago and am currently letting mine out.
It sounds as you had been living in your flat as your residence until you moved into his flat, so within the last three years.
We have plans to buy a house together and sell both of our flats but the sale of my flat will likely take place after the purchase, so we'd be subject to the second home SDLT on the house
Yes, assuming you and your partner are not married or in a civil partnership by the time he sells his flat.

 (i actually intended to sell up a few months ago when the increase to second home SDLT was announced but my tenants all but begged me not to as they're so happy there and they're brilliant tenants so I don't want to rush them out if no need to...)

Assuming my partner's flat is sold in the process of us buying a house, we'd still have to pay the second home stamp duty as at that point I would own 2 properties.
Yes, though it might be different if you are married or civil partners as mentioned above.

What I'd like to know is, if I sold my flat within 3 years of the sale, would we be eligible to reclaim the additional second home SDLT? Or would we be ineligible, as my flat is not currently my main residence?
See below
Any information would be much appreciated!

See generally the text in bold above.

It seems as you will meet all of the four conditions set out in the if you sell your flat within three years of the joint purchase of your new home.  If so, then the extra 5% SDLT can be recovered when you sell your flat.

Thank you SDLT_Geek for this answer! This is very helpful and clear!

Bookworm105

bestofboth333 said:

Bookworm105 said:

I assume you are not legally married.
You are correct that the higher rate will apply to the new joint purchase.

as you have no legal interest in his (by then sold) property, you will be entitled to a refund as you would be replacing your own main home if sold within 3 years of completing the purchase of the new joint owned 

example 2 sort of covers it by implication 

Thanks Bookworm105. This is really helpful - the example perfectly describes our situation (with me being Mr P in this case - you're correct that we're unmarried..)

I definitely see what you're saying about this seemingly implying that HMRC would potentially still view MY flat as my main residence. However, I wonder if there's somewhere this is stated more explicitly? There's potentially thousands of ££s at stake so I'm a bit nervous to take this as confirmation!

there is not an exact example from HMRC, but as you can see the page i gave is the examples relating to Condition D as shown on the previous page (ie the link the geek gave). The latter sets out the theory, hence I said "you" would qualify for the refund if both are sold within the time limit..