Additional rate stamp duty refund after a seperation

Jonahs98

Hi,

I am in a bit of a complicated situation re second property ownership with my former partner and whilst we are in the process of separating our assets I want to know where I stand re claiming a refund for the additional stamp duty we paid on the second property.

Background:

My former partner and I currently own two properties:

1. Chester Property – our home, which we lived in together for around 10 years, where my former partner still lives.

1. Northampton Property – purchased in December 2022, where my mother currently lives.

When we bought the Northampton property, we paid the additional 3% stamp duty rate, as it was considered a second property. My mother couldn’t get a mortgage in her name due to age/employment, so we took out the mortgage in our names and have been covering all payments, though she lives there.

---

Main Residence Declaration:

To avoid potential capital gains tax as an unmarried couple, I submitted a declaration to HMRC stating that the Northampton property as my main residence. This was done around a year after purchase — still within the required two-year window — though the process has been extremely slow due to postal-only communication and long response times.

HMRC acknowledged receipt of the declaration within the valid timeframe, and their most recent reply (a few months ago) asked for confirmation of the purchase date. I haven’t responded to that yet, as I’m unclear on how it may affect our situation now that circumstances have changed.

---

Current Situation:

My former partner and I separated seven months ago, and next month we will be dividing the two properties. The plan is:

• She will retain the Chester property, removing my name from the mortgage and deeds, and giving me a lump sum from the equity.

• I will use this sum to reduce the mortgage on the Northampton property, which will be solely in my name.

So ultimately, we will each end up with one property in our individual names, rather than jointly owning two.

---

My Concern:

I don’t plan to buy another property to live in until around April 2027, so I’m keen to avoid paying the 3% additional stamp duty a second time.

My questions are:

1. Would we be eligible to apply for a refund of the additional stamp duty paid on the Northampton property, given that neither of us will then own a second properry anymore and this will fall within the 3-year window? 

1. Alternatively, should I not apply for a refund, but instead change the declaration of my main residence when I buy a new property in 2027 as I've already paid the additional stamp duty.

The core concern is: I want to ensure I’m not penalised and made to pay the additional stamp duty twice, when I will have only ever owned two properties simultaneously. 

---

I understand this is a bit complicated, but any advice anyone could offer on the best approach — or what the correct process would be — would be much appreciated.

Thanks!

saajan_12

Where do you live currently? 

The exemptions and refunds are based on strict criteria, and there are several circumstances where you DO have to pay the additional 5% stld multiple times eg if you change your additional property. Also for SDLT its about the factual situation, not what you declare on a form.  

Re 2) If you buy the new house within 3 years of moving out of the Chester property and sell your interest in the Chester property in that time, then I think you can avoid the higher rate SDLT on the new purchase. If you moved out 7 months ago and plan to buy in 2027, that'll be tight. 

Re 1) This is trickier for many reasons: 
a) you bought the Northampton property for the mother, not intended to be your main residence
b) The refund is usually conditional on a sale. You're selling your interest in the prior main residence, but ex partner is not. Granted she won't have an interest in the Northampton property, but the higher rate SDLT isn't refundable upon sale of THE SAME property, which is essentially what she's doing. 

Jonahs98

Hi Saajan,

Thanks a lot for your reply. 

I'm currently staying between friends and airbnbs so haven't officially moved out of the Chester property on paper.

I did actually live in the Chester property but declared the Northampton property my main residence for capital gains purposes, (which I was advised to do). 

My ex-partner is very keen on doing the exchange of properties in the next month, meaning that i will be selling my interest in that property very soon. 

Does it seem as though we won't be able to apply for a refund with us both taking one house each then?

Do you think there is a route I can take to either get a refund or not pay the higher SDLT a second time?

sheramber

For stamp duty purposes your main residence is where you reside for the majority of the time.

there is no election facility as there is for CGT. 

So Chester house is your main residence for stamp duty purposes.
 

If you replace your main residence within 3 years of disposing the current one  you will not be due to pay additional stamp on that purchase. 

The time limit is critical.

You cannot claim a refund of the additional  stamp duty on the Northampton property. 

As  you elected for that house to be your main residence for CGT purposes does that leave you due to pay CGT on the  sale value of your share of the Chester home?

Hoenir

Jonahs98 said:

 I submitted a declaration to HMRC stating that the Northampton property as my main residence. This was done around a year after purchase — still within the required two-year window — though the process has been extremely slow due to postal-only communication and long response times.

HMRC acknowledged receipt of the declaration within the valid timeframe, and their most recent reply (a few months ago) asked for confirmation of the purchase date. I haven’t responded to that yet, as I’m unclear on how it may affect our situation now that circumstances have changed.

Treading on thin ice I'd suggest. Never treat the HMRC as being dumb they have access to a huge amount of data with which to cross check against. 

SDLT_Geek

Jonahs98 said:

Hi,

I am in a bit of a complicated situation re second property ownership with my former partner and whilst we are in the process of separating our assets I want to know where I stand re claiming a refund for the additional stamp duty we paid on the second property.

Background:

My former partner and I currently own two properties:

1. Chester Property – our home, which we lived in together for around 10 years, where my former partner still lives.

1. Northampton Property – purchased in December 2022, where my mother currently lives.

When we bought the Northampton property, we paid the additional 3% stamp duty rate, as it was considered a second property. My mother couldn’t get a mortgage in her name due to age/employment, so we took out the mortgage in our names and have been covering all payments, though she lives there.

---

Main Residence Declaration:

To avoid potential capital gains tax as an unmarried couple, I submitted a declaration to HMRC stating that the Northampton property as my main residence. This was done around a year after purchase — still within the required two-year window — though the process has been extremely slow due to postal-only communication and long response times.

HMRC acknowledged receipt of the declaration within the valid timeframe, and their most recent reply (a few months ago) asked for confirmation of the purchase date. I haven’t responded to that yet, as I’m unclear on how it may affect our situation now that circumstances have changed.

---

Current Situation:

My former partner and I separated seven months ago, and next month we will be dividing the two properties. The plan is:

• She will retain the Chester property, removing my name from the mortgage and deeds, and giving me a lump sum from the equity.

• I will use this sum to reduce the mortgage on the Northampton property, which will be solely in my name.

So ultimately, we will each end up with one property in our individual names, rather than jointly owning two.

---

My Concern:

I don’t plan to buy another property to live in until around April 2027, so I’m keen to avoid paying the 3% additional stamp duty a second time.

My questions are:

1. Would we be eligible to apply for a refund of the additional stamp duty paid on the Northampton property, given that neither of us will then own a second properry anymore and this will fall within the 3-year window? 

1. Alternatively, should I not apply for a refund, but instead change the declaration of my main residence when I buy a new property in 2027 as I've already paid the additional stamp duty.

The core concern is: I want to ensure I’m not penalised and made to pay the additional stamp duty twice, when I will have only ever owned two properties simultaneously. 

---

I understand this is a bit complicated, but any advice anyone could offer on the best approach — or what the correct process would be — would be much appreciated.

Thanks!

Here are some brief notes as others have covered most of the points.

1.  You will not be entitled to a refund of the extra 3% SDLT paid on the Northampton property.

2. If you purchase a new property within three years of having moved out of the Chester property you should come within the rules for replacing your main residence. As others have said it is about where you actually live, nothing to do with what is “on paper“!!!

3. Rather than doing an “exchange“ of properties with your ex partner, it might work better for SDLT to do a “partition“.

Jonahs98

SDLT_Geek said:

Jonahs98 said:

Hi,

I am in a bit of a complicated situation re second property ownership with my former partner and whilst we are in the process of separating our assets I want to know where I stand re claiming a refund for the additional stamp duty we paid on the second property.

Background:

My former partner and I currently own two properties:

1. Chester Property – our home, which we lived in together for around 10 years, where my former partner still lives.

1. Northampton Property – purchased in December 2022, where my mother currently lives.

When we bought the Northampton property, we paid the additional 3% stamp duty rate, as it was considered a second property. My mother couldn’t get a mortgage in her name due to age/employment, so we took out the mortgage in our names and have been covering all payments, though she lives there.

---

Main Residence Declaration:

To avoid potential capital gains tax as an unmarried couple, I submitted a declaration to HMRC stating that the Northampton property as my main residence. This was done around a year after purchase — still within the required two-year window — though the process has been extremely slow due to postal-only communication and long response times.

HMRC acknowledged receipt of the declaration within the valid timeframe, and their most recent reply (a few months ago) asked for confirmation of the purchase date. I haven’t responded to that yet, as I’m unclear on how it may affect our situation now that circumstances have changed.

---

Current Situation:

My former partner and I separated seven months ago, and next month we will be dividing the two properties. The plan is:

• She will retain the Chester property, removing my name from the mortgage and deeds, and giving me a lump sum from the equity.

• I will use this sum to reduce the mortgage on the Northampton property, which will be solely in my name.

So ultimately, we will each end up with one property in our individual names, rather than jointly owning two.

---

My Concern:

I don’t plan to buy another property to live in until around April 2027, so I’m keen to avoid paying the 3% additional stamp duty a second time.

My questions are:

1. Would we be eligible to apply for a refund of the additional stamp duty paid on the Northampton property, given that neither of us will then own a second properry anymore and this will fall within the 3-year window? 

1. Alternatively, should I not apply for a refund, but instead change the declaration of my main residence when I buy a new property in 2027 as I've already paid the additional stamp duty.

The core concern is: I want to ensure I’m not penalised and made to pay the additional stamp duty twice, when I will have only ever owned two properties simultaneously. 

---

I understand this is a bit complicated, but any advice anyone could offer on the best approach — or what the correct process would be — would be much appreciated.

Thanks!

Here are some brief notes as others have covered most of the points.

1.  You will not be entitled to a refund of the extra 3% SDLT paid on the Northampton property.

2. If you purchase a new property within three years of having moved out of the Chester property you should come within the rules for replacing your main residence. As others have said it is about where you actually live, nothing to do with what is “on paper“!!!

3. Rather than doing an “exchange“ of properties with your ex partner, it might work better for SDLT to do a “partition“.

Thanks a lot for your response..

So is that 100% clear cut re not being able to get a refund on the Northampton property but being able to replace my main residence within 3 years and not pay the SDLT again? Even though I won't officially have a main residence between now and then?

What is a partition in this instance and what benefit would that be if the above is clear cut?

Would there be any Capital gains tax implications on either property if I have declared the Northampton property my main residence (and we didn't declare a main residence for my partner)

Jonahs98

sheramber said:

For stamp duty purposes your main residence is where you reside for the majority of the time.

there is no election facility as there is for CGT. 

So Chester house is your main residence for stamp duty purposes.
 

If you replace your main residence within 3 years of disposing the current one  you will not be due to pay additional stamp on that purchase. 

The time limit is critical.

You cannot claim a refund of the additional  stamp duty on the Northampton property. 

As  you elected for that house to be your main residence for CGT purposes does that leave you due to pay CGT on the  sale value of your share of the Chester home?

Thanks a lot for your reply...

So is that 100% clear cut re not being able to get a refund on the Northampton property but being able to replace my main residence within 3 years and not pay the SDLT again?

What if I actually moved into the Northampton property prior to me buying another one and that was my main residence for a while would I get the refund in that instance but then have to pay again when I buy again?

I wasn't aware of any CGT implications. Do you think I would be liable for this? If so is there a way to change the declaration of main residence before dividing the properties?