Second home stamp duty exemption?

by Readers Question

17:51 PM, 23rd September 2020
About a month ago

Second home stamp duty exemption?

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Second home stamp duty exemption?

Hi all, I’m considering selling my main residence and moving into a rental property I own. Given I will be selling my main residence, if I buy another within 3 years, will I be able to claim the stamp duty refund? Or will it not apply because I’ll be moving into the rental property I own in the interim and therefore that would be deemed my main residence so unless I sold the rental property, I would post second home stamp duty?

Additionally, Is anybody aware of the qualifying period I could live in the rental property for without then having to pay any capital gains tax if I did sell the rental after living in it for a while?

Someone said if I move in for 6 months then any historic capital gains tax requirements disappear?

Thanks

Andrew


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Comments

Neil Patterson

17:59 PM, 23rd September 2020
About a month ago

Dear Andrew,

Please ignore the 18 months refund in gthe Stamp duty chart above as it is now 3 years.

However, If you sell your main residence and move into another you already own that would then become your main residence and then no refund would be able to be applied.

If you purchase a new main residence later by the letter of the rules you will own more than one property and have to pay the 3% Stamp Surcharge.

However, as this is an unusual circumstance you may want to double-check this with your solicitor first.

Your friend is incorrect and your CGT exposure does not disappear after 6 months. Please see >> https://www.gov.uk/government/publications/private-residence-relief-hs283-self-assessment-helpsheet/hs283-private-residence-relief-2020

Timmo

18:53 PM, 25th September 2020
About a month ago

Reply to the comment left by Neil Patterson at 23/09/2020 - 17:59
I'm not sure that is correct. If you sell your main home and purchase another main home within 3 yrs it does not matter that you already own another property as long as you have not bought it within the 3 yrs and therefore the 3% surcharge is not applicable. There are certain conditions that apply. Even solicitors are confused about this. See HMRC's manuals sdltm09765 and sdltm09800.

Chris Bradley

7:54 AM, 26th September 2020
About 4 weeks ago

Historical capital gains never disappear. The capital gains is worked out over the number months property is owned, to get monthly gain figure, remove the months lived in it plus 9months. If you sell your main home, move into the rental then sell The rental(I assumed you only had one) to buy new main home you would only have one home so no second home stamp duty charge, but CGT as mentioned above must be paid on rental depending on gain made

Timmo

9:33 AM, 26th September 2020
About 4 weeks ago

Reply to the comment left by Chris Bradley at 26/09/2020 - 07:54
You don't need to sell the rental property.

Hannah Mackinlay

13:04 PM, 28th September 2020
About 4 weeks ago

You need to get advice from a specialist SDLT advisor like us at SDLT Compass, as most solicitors do not understand Stamp Duty Land Tax and about 40% of their assessments are wrong. It can be way more complicated than people think, but I'm sure we can help you structure a solution to minimise the chance of having to pay the Additional rate. Contact me if you are interested


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