Can you get a refund of additional stamp duty if buying house due to separation

soupyH

My husband and I are seperating but do not want to rush into divorce, everything is amicable and we have agreed to split assets 50:50.  He is buying a small house which will be his main residence and has to pay the additional stamp duty as he is joint owner of the family home (no mortgage).  Can he reclaim this back without having a court order? 

Hoenir

Are you obtainng a separation order ? 

soupyH

To be honest I hadn’t heard of this before.  I have had advise from a family lawyer but this has not been mentioned.  After quickly googling it, it does seem like an option.

saajan_12

soupyH said:

My husband and I are seperating but do not want to rush into divorce, everything is amicable and we have agreed to split assets 50:50.  He is buying a small house which will be his main residence and has to pay the additional stamp duty as he is joint owner of the family home (no mortgage).  Can he reclaim this back without having a court order? 

Why is he remaining joint owner? Often people do this because one partner can't afford to take on the mortgage themselves, but you have none. Why doesn't he sign it over to you, and then buy the small home wtih the usual SDLT. If there's an issue of paying him £ for his share, he could place a charge on the family home for whatever you own him. 

soupyH

We started this process for transferring ownership but the solicitor says SDLT needs to be paid to HMRC because we don’t have a court agreement.  If we state that no payment is being made to him then this is in effect agreement that he is gifting the house to me.  We’ve asked 2 solicitors and they both say the same thing.  I’m very confused by it all as surely this can’t be an unusual situation.

RAS

@SDLT_Geek, any help?

SDLT_Geek

RAS said:

@SDLT_Geek, any help?

Is OP's husband buying a property in England, so the relevant stamp duty is stamp duty land tax?  I will assume so for the points below.

As things stand the husband would have to pay the extra 5% SDLT on the purchase, as he retains a share in the former matrimonial home (FMH).  It would be different if either:

(a)  The FMH is transferred first to OP so the husband has no other property interests.  On the basis that you are separated in circumstances likely to be permanent, then the husband can buy without paying the extra 5%.

(b)  There is a "property adjustment order" put in place for the benefit of OP on the FMH.  See the guidance here: https://www.gov.uk/hmrc-internal-manuals/stamp-duty-land-tax-manual/sdltm09797

If the 5% is due, then it seems likely that the husband can get it back if within three years the husband transfers all of his interest in the FMH to OP, or the FMH is sold.  https://www.gov.uk/hmrc-internal-manuals/stamp-duty-land-tax-manual/sdltm09800

soupyH

Thank you @SDLT_Geek