Additional Dwelling Supplement (ADS) taxes based on main residence status

Carbassa

I have a couple of questions around the Additional Dwelling Supplement (ADS) taxes in Scotland, specifically regarding my situation with a co-owned property in England with my ex-partner and a rented flat in Scotland.

Main Residence: I’ve been living in a rented flat in Scotland for the last 2 years, but I occasionally visit the co-owned property in England. My bank are still addressed in England but my council tax and GP is in Scotland now. Which property would be considered my main residence for ADS purposes - the rented flat in Scotland or the property in England?
ADS Exemption: My solicitor has mentioned that I need to pay the ADS but is unsure about the possibility of repayment or recovery of the tax once I have disposed of the “primary residence”, if the time pass and I’ve lived in the rented property for 36 months or more. The property in England is not ready for selling as my ex-partner is a hoarder and it will take time to have a proper clearing.
If the ownership share of the property is transferred to my ex-partner, would the ADS still apply until certain time has passed?

My questions are:
Is the rented residence in Scotland considered my "main residence"?
Do I need to transfer my part of the house to my ex-partner to be exempt from the ADS? 

_Penny_Dreadful

Carbassa said:

I have a couple of questions around the Additional Dwelling Supplement (ADS) taxes in Scotland, specifically regarding my situation with a co-owned property in England with my ex-partner and a rented flat in Scotland.

Main Residence: I’ve been living in a rented flat in Scotland for the last 2 years, but I occasionally visit the co-owned property in England. My bank are still addressed in England but my council tax and GP is in Scotland now. Which property would be considered my main residence for ADS purposes - the rented flat in Scotland or the property in England?
ADS Exemption: My solicitor has mentioned that I need to pay the ADS but is unsure about the possibility of repayment or recovery of the tax once I have disposed of the “primary residence”, if the time pass and I’ve lived in the rented property for 36 months or more. The property in England is not ready for selling as my ex-partner is a hoarder and it will take time to have a proper clearing.
If the ownership share of the property is transferred to my ex-partner, would the ADS still apply until certain time has passed?

My questions are:
Is the rented residence in Scotland considered my "main residence"?
Do I need to transfer my part of the house to my ex-partner to be exempt from the ADS? 

In your case I’d say the rented property in Scotland is your main residence. It’s where you live and spend most of your time. 

Prior to renting the property in Scotland I’m assuming the property with your ex is where you used to reside. You have 36 months from when it ceased to be your main residence to buy a new home and dispose of your share of the old home to be able to reclaim the ADS. For example, if you purchased a new home today you’d have 36-24 =12 months to dispose of your share of the old home with your ex to be eligible to reclaim the ADS. 

You could dispose of your share by giving it to your ex. If there’s a mortgage on the property that won’t work though unless the mortgage is cleared first. 

Carbassa

https://forums.moneysavingexpert.com/discussion/comment/81855687#Comment_81855687

Thank you, this is very useful.

It’s devastating news for me.

1. Yes, I have a mortgatge in the co-owned property in England.
2. It traps me to the situation in England – I will have to reconsider going back to the house in England as can’t longer afford the rent and mortgage.
3. There is an example in the ADS gov.uk site that explains a court order was needed to make one of the parties exempt of the ADS. I could try this avenue, but a lawyer and process could cost me as much. And it will deteriorate my ex’s mental health further….

Argh.

silvercar

If you can’t afford the rent and a mortgage, how were you intending to afford the old mortgage and the new one?

A court order may work if your ex understood it was a formality and didn’t object. Another option would be to change the mortgage on the previous home to ‘sole proprietor, joint borrower’ so you would be jointly liable for the mortgage with your ex, but only your ex is on the deeds, making them the sole owner.

Really if you are 2 years post break up and living a distance apart, this could be the push that you both need to sort the situation and hoarders do need pushing. Temporarily renting a storage space, may be a solution to the hoarding.

_Penny_Dreadful

https://forums.moneysavingexpert.com/discussion/comment/81871003#Comment_81871003

I think the court orders are more to do with divorcing couples where it's been agreed a property won't be sold until the youngest child reaches 16 and the ex who moved out the family home is looking to buy a new place.

Under section 14 of the Trusts of Lands and Appointment of Trustees Act 1996 (TOLATA) you can ask a court to make an order to force the sale of the property in England. It's not a quick process and it will cost but you can request that your legal fees be repaid from the equity of your ex's share of the property.

I wouldn't suggest a joint borrower sole proprietor mortgage to avoid the ADS. That gives you all the risk of the existing mortgage but with none of the reward and as you would cease to be a legal owner you could never force the sale of the house.

I know your ex has mental health problems but you can't remain beholden to those for the rest of your life. It's time to make a clean break.