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  • FIRST POST
    • mrsbun2002
    • By mrsbun2002 6th May 17, 8:57 PM
    • 13Posts
    • 2Thanks
    mrsbun2002
    Refund of Stamp Duty
    • #1
    • 6th May 17, 8:57 PM
    Refund of Stamp Duty 6th May 17 at 8:57 PM
    Hello. We own 2 properties in Scotland. Our original home which we rented out when we moved into a house we renovated, and now the renovated home is rented out as my husband accepted a move to England within his company. Moving in August 2016, we had to pay the surcharge stamp duty, and paid 7,500. This hit hard as we hadn't budgeted for that when the company moved (and paid for) our rented accommodation in January 2016, as we assumed it would be about 1,500 when we found a property to buy later in the year.

    Anyway, the job isn't working out, and it looks as though we will have to move if he loses his job. We would need to downsize. Because our son goes to a special school, we are considering remaining in the area, and keeping our houses up north with our tenants as income.

    My question is, if we sell our current (main) home, would we receive any discount on the stamp duty as we've only had the mortgage about 9 months? We appreciate that if we move we'd need to pay stamp duty on any new cheaper property. Of course, we'll also lose money if we surrender the mortgage early I have had a look at all the info I can find, but can't find anything that outlines what happens if you sell the home you've just recently purchased.

    I'm just trying to find all the options. Thank you for reading.
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Page 1
    • davidmcn
    • By davidmcn 6th May 17, 9:16 PM
    • 8,220 Posts
    • 8,579 Thanks
    davidmcn
    • #2
    • 6th May 17, 9:16 PM
    • #2
    • 6th May 17, 9:16 PM
    I have had a look at all the info I can find, but can't find anything that outlines what happens if you sell the home you've just recently purchased.
    Originally posted by mrsbun2002
    That's because the period you've owned it is irrelevant. Buy it one day and sell it the next and you'll still need to pay the full amount.

    (Note to everyone: we're in Scotland so talking here about Land & Buildings Transaction Tax rather than SDLT)
    • anselld
    • By anselld 6th May 17, 9:25 PM
    • 5,839 Posts
    • 5,557 Thanks
    anselld
    • #3
    • 6th May 17, 9:25 PM
    • #3
    • 6th May 17, 9:25 PM
    On the plus side you will not pay the SDLT surcharge on your next property as you will be replacing your main residence (assuming you don't decide to keep it again).
    • mrsbun2002
    • By mrsbun2002 6th May 17, 10:44 PM
    • 13 Posts
    • 2 Thanks
    mrsbun2002
    • #4
    • 6th May 17, 10:44 PM
    • #4
    • 6th May 17, 10:44 PM
    Thank you, I had assumed we'd have to pay it again, so that's a bonus ....... of sorts
    • TartanSaver
    • By TartanSaver 7th May 17, 11:49 AM
    • 197 Posts
    • 150 Thanks
    TartanSaver
    • #5
    • 7th May 17, 11:49 AM
    • #5
    • 7th May 17, 11:49 AM
    You're asking about the Additional Dwelling Supplement on Land and Buildings Transaction Tax in Scotland, and the short answer is "maybe."

    In any scenario where, after the end of the day that is the effective date for the next main residence purchase transaction;
    (a) the buyer sells a dwelling which was their main residence at any time during the 18 month period ending with the day that is the effective date of the next main residence purchase transaction, and
    (b) the sale of that previous main residence is within a period of 18 months beginning with the day after the day that is the effective date of the next main residence purchase transaction then
    a repayment of the ADS may be claimed.

    If that's a little confusing, here's what we need to know:
    a) When did you last live in the property you describe as your "main" residence? (Someone else currently pays you money to rent it, so it certainly isn't your main residence now.)
    b) When anticipate you will buy the new house? (This is completion date.)
    c) When do you anticipate selling the old one?

    If a) and b) are more than 18 months apart, you won't get a refund. If c) is more than 18 months after b), you won't get a refund.

    You've suggested you bought the house in August 2016, but then said you moved to England in January 2016, which doesn't make sense. Did you mean you moved in 2017? The critical date would be when you stopped actually living in the house. Full details at this link:

    https://www.revenue.scot/land-buildings-transaction-tax/guidance/lbtt-legislation-guidance/lbtt10001-lbtt-additional-dwelli-5
    • anselld
    • By anselld 7th May 17, 12:01 PM
    • 5,839 Posts
    • 5,557 Thanks
    anselld
    • #6
    • 7th May 17, 12:01 PM
    • #6
    • 7th May 17, 12:01 PM
    Tartan, the OP implies that they have purchased and paid SDLT surcharge in England because they retained two previous residences in Scotland.

    Hence the only way they will reclaim that surcharge is if they sell the previous residence in Scotland within the time window (which they are not proposing to do).
    • TartanSaver
    • By TartanSaver 7th May 17, 12:13 PM
    • 197 Posts
    • 150 Thanks
    TartanSaver
    • #7
    • 7th May 17, 12:13 PM
    • #7
    • 7th May 17, 12:13 PM
    Then aye, what you said.
    • mrsbun2002
    • By mrsbun2002 8th May 17, 12:35 AM
    • 13 Posts
    • 2 Thanks
    mrsbun2002
    • #8
    • 8th May 17, 12:35 AM
    • #8
    • 8th May 17, 12:35 AM
    Tartan, the OP implies that they have purchased and paid SDLT surcharge in England because they retained two previous residences in Scotland.

    Hence the only way they will reclaim that surcharge is if they sell the previous residence in Scotland within the time window (which they are not proposing to do).
    Originally posted by anselld
    The above is correct, thank you anselld.

    TartanSaver -You've suggested you bought the house in August 2016, but then said you moved to England in January 2016, which doesn't make sense. Did you mean you moved in 2017?

    My husbands company moved us into rented accomodation in January 2016, paying the rent for 6 months, allowing us time to get to know the area and buy/rent a property of our choosing. We purchased a house in August 2016, paying one months rent at the company's rented accomodation as we were there 7 months.

    I believe I'm correct in saying (reading what's been stated here and the links kindly posted) that if we do indeed decided to sell our new home in England, regardless of where we move to next, we will not get a refund of our 7,500 but will not have to pay another surcharge either.

    Thank you for your replies
    Save
    • 00ec25
    • By 00ec25 8th May 17, 9:23 AM
    • 6,820 Posts
    • 6,438 Thanks
    00ec25
    • #9
    • 8th May 17, 9:23 AM
    • #9
    • 8th May 17, 9:23 AM
    I believe I'm correct in saying (reading what's been stated here and the links kindly posted) that if we do indeed decided to sell our new home in England, regardless of where we move to next, we will not get a refund of our 7,500 but will not have to pay another surcharge either.
    Originally posted by mrsbun2002
    correct

    selling the English property which is now your main home and buying a new main home elsewhere would not incur the higher rate as it would be a direct replacement of your current home without you having owned an intervening property

    your chance to get a refund on the higher rate paid when originally purchasing the English property is lost as you do not intend to sell the Scottish ex home before you purchase a new home to replace the current English one. Therefore, you would own an intervening property between the original Scottish, the "old" English, and the new home which would therefore mean the original Scottish is no longer the "home" which is being replaced, it is instead the "old" English one which qualifies as the replaceable property as that is the "intervening" property which breaks the chain in respect of replacement of the "original" Scottish one

    Furthermore, there is also the applicable timescale for making that replacement
    Last edited by 00ec25; 08-05-2017 at 9:31 AM.
    • mrsbun2002
    • By mrsbun2002 17th Apr 18, 11:20 PM
    • 13 Posts
    • 2 Thanks
    mrsbun2002
    Long time I know, but updated info required
    I wasn't sure if this link would still be here!

    We are now in a position to move from England, and are actually going back to Scotland and not remaining in England as I stated in my original post. However, we are not moving back to one of our original 2 homes, but to a new home in a new area of Scotland (work related, new job).

    Does anyone know if the statement above still applies? I'm sure that we are not entitled to a refund of the surcharge, but more importantly that we will not have to pay another surcharge either?

    Thanks for reading :-)
    • pinklady21
    • By pinklady21 18th Apr 18, 12:31 PM
    • 659 Posts
    • 477 Thanks
    pinklady21
    The basic principle is that if you are swapping one main residence for another main residence, (even if you have additional rental properties) you still pay Stamp Duty (LBTT) at the usual residential rates, but not the Additional Dwelling Supplement (3%). Your solicitor should be able to explain to you what the position is in your circumstances.
    You can use the online calculators to work out approx how much LBTT you will have to pay:
    https://www.revenue.scot/land-buildings-transaction-tax/tax-calculators
    • Pixie5740
    • By Pixie5740 18th Apr 18, 1:30 PM
    • 12,706 Posts
    • 18,147 Thanks
    Pixie5740
    You're still not due a SDLT refund and you won't pay the higher rate of LBTT (assuming you are selling the property in England).
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