Extra SDLT but my only property is abroad?

Extra SDLT but my only property is abroad?

16:56 PM, 17th November 2016, About 6 years ago 6

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I have recently moved to the UK and looking to buy a property together with my wife. She is a FTB, but I own a property abroad. Due to my current ownership of a flat currently being rented out, us buying together, and a joint application sole proprietor mortgage not being an option, we are placed in the higher stamp duty bracket. From what I understand from talking to HMRC, I would avoid paying the higher tax if I were to sell my property abroad – as this is classed as my main residence despite currently living in rented accommodation in England (which I would argue is my main residence, but HMRC disagrees…).stamp duty

So, in order to avoid the higher SDLT, would it be possible for me to buy a (cheap) property anywhere in the UK, and thus having this become my main residence, and then immediately trying to sell said property.

1) Would this be classified as me having sold my main residence – and thus put me in the lower SDLT bracket when purchasing a property to live in?

2) Would there have to be a “minimum” price on what I would be buying, e.g. could it cost £4,000 or would it at least have to be a property worth above the stamp duty threshold of £40,000?

Thank you all in advance for all your help – it is much appreciated!

With a budget of £400,000 to buy, there’s a significant money to be saved here.



Michael Barnes

21:27 PM, 18th November 2016, About 6 years ago

1) Would this be classified as me having sold my main residence – and thus put me in the lower SDLT bracket when purchasing a property to live in?

I believe that you would have to live in the property for for a time to make it your main residence. How long that might be I do not know.
And HMRC could always claim that this is an illegal tax avoidance scheme.


22:08 PM, 19th November 2016, About 6 years ago

As I understand this SDLT levy, it will apply to everyone that already owns one property, regardless of where in the world that property is (unless you purchase as a limitied company). It's not about main residence, it's about already owning one property and purchasing additional properties. I have purchsed a small bungalow with completion in June this year. SDLT bill £12,400. A compeletion in March I would have paid £3,200. As it will be the last property I intend to purchase (making four) and will be selling three of them within three years and the bungalow will become my main residence, thus enabling me to claim back the SDLT difference, I chose to pay the higher rate and not set up a limited company.
Set up a limited company and make the purchase, then you will not pay the higher SDLT and keep any other property you already own, and benefit from tax advantages.

Kate Mellor View Profile

22:52 PM, 19th November 2016, About 6 years ago

Hi Josh, Terry is right. As long as you own a property, you will be forced to pay the higher rate on any further property purchase. If you sell your existing property within 3 years from the second purchase you are able to reclaim the additional SDLT paid from HMRC.

Terry has suggested one option (purchasing your new property in a company), the potential downside to this option will be that you will be unlikely to find interest rates for companies as competitive as those offered to individuals.

A second option you could consider is using the three years available to you to sell your existing property, reclaiming the SDLT, and, if you so desire purchasing a new buy to let property with the money.

If you were to purchase again abroad I would imagine you would be liable for SDLT in accordance with that countries regulations which are probably not as penalising on landlords as this country now is.

Alternatively if you were to spend the money on a BTL in England your SDLT would be less than that due on your £400K purchase especially if it falls into a lower threshold.

Obviously one downside to that option is that there will be costs associated with selling and then buying. You will need to do your sums and work out which option is the most cost-effective.

Si G

7:20 AM, 26th February 2017, About 5 years ago

Reply to the comment left by "Kate Mellor" at "19/11/2016 - 22:52":

Hello Kate, please comment on an imaginary scenario if you wish to or anyone else please sorry if its been covered before.
b2let purchase in own name will become 2nd home at £90,000 is the 3% sdlt chargable on the £90,000 or (£90,000 - £40,000) ? and if the "2nd home" is bought under a ltd then i assume theres no cgt as its not a "2nd home" if you see what i mean.
General rant - why make things difficult cant the market self regulate whats the end game all work and no play ?

Kate Mellor View Profile

23:36 PM, 3rd March 2017, About 5 years ago

Hi Simon, not sure what you're after, but if you purchase a property with your partner here for the £400,000 budget that you mentioned you will be paying £22,000 in SDLT whilst you still own your overseas property rather than £10,000. If you were to sell your existing property within the next 3 years you can reclaim the additional £12,000 tax paid from HMRC. If you then use your sale money to purchase another buy to let (you mention a figure of £90,000) as a second property you would be liable for £2,700 in SDLT on a second property valued at £90,0000. Quite a substantial saving on the SDLT.


22:51 PM, 25th October 2020, About 2 years ago

I am purchasing the first property in UK.
I have read that if I have some other properties abroad then I can be considered as a second time buyer.

I actually have a land in Pakistan which my Dad bought on my name. Its worth is less than £5000.
I wonder if I will be classed as first time buyer or as a buyer purchasing additional property in UK.
If I am still classed as first time buyer, then do I need to declare to HMRC my land in Pakistan worth £5000.
And if yes, then what sort of documents (evidence showing the worth of the land) I will need to submit with my application?


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