Second property Stamp duty Just because we live together?

by Readers Question

12:42 PM, 20th May 2016
About 4 years ago

Second property Stamp duty Just because we live together?

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Second property Stamp duty Just because we live together?

To avoid second (and subsequent property) stamp duty I suggested to my conveyancing solicitor that my partner who has not owned property for several years use my funds to purchase a property (approx £60k) purely in her name and as a cash purchaser.Broken up house with stamp duty button

We live together and plan to marry later this year.

I have been advised that as we live together though we are not married we are still treated as a single unit by HMRC and that stamp duty is payable.

I am unable to find any flow charts confirming this. Is there anyone who has had a similar experience or can point me in the direction of the relevant clauses in the new legislation.

David



Comments

Arthur Allen

23:27 PM, 21st May 2016
About 4 years ago

I have a nephew who, along with his brother, was left a house when their father died. This house is rented out and neither of my nephews lives in it. One of my nephews has now decided to buy a house jointly with his girlfriend but unfortunately no-one (including their solicitor) is able to work out whether they will be liable for the higher rate of stamp duty as my nephew obviously already owns a property which is rented out. Neither my nephew or his girlfriend have ever owned a home that they have lived in themselves - does anyone have any ideas as to whether they will be liable?

Badger

10:04 AM, 22nd May 2016
About 4 years ago

I'm with Tony Atkins on this.

My understanding is that HMRC do not regard a couple as an item unless they have the requisite official paperwork to match.

I don;t see any need to mention / highlight it at all - just proceed as you wish and all should be fine.

(You may want to consider getting a new conveyancer though.)

KT Landlord

0:15 AM, 23rd May 2016
About 4 years ago

Reply to the comment left by "David Lovegrove" at "20/05/2016 - 14:36":

As you would not be joint purchasers it looks like your partner should be exempt. I haven't seen any mention of cohabiting as a definition of a 'single unit' in the view of HMRC.

I guess the conveyancer has to cover their back though, especially in these early days. Is there a declaration form that has to be signed confirming no other properties are owned? I'm curious how the new system is policed.

It might be worth giving them an anonymous call and reporting back what you find out.

From the summary of consultation responses:

1.8 Joint purchasers are treated in the same way as married couples. In the consultation the
government proposed that if, at the end of the day of a transaction, any of the joint purchasers
has two or more properties and is not replacing a main residence, the higher rates will apply to
the entire consideration for the transaction. This provides consistency with the treatment of
married couples. This means that, where two or more people purchase a property jointly and the
property was an additional property for some of the purchasers but not for others, the higher
rates would apply to the transaction.

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/508156/SDLT_summary_of_responses_final_14032016.pdf

Ramus Wood

8:44 AM, 23rd May 2016
About 4 years ago

And for the nephews: yes, if they buy more they will be paying the new highet SDLT

Tony Lilleystone

15:32 PM, 23rd May 2016
About 4 years ago

Just to add that although co-habitees do not appear to be mentioned in the English SDLT legislation they are in the similar Scottish legislation for their Land and Buildings Transaction Tax - I believe because Scottish Law may recognise 'common law marriage' - so if you were buying in Scotland you would be caught for higher-rate tax.

Kathy Evans

8:49 AM, 3rd June 2016
About 4 years ago

Reply to the comment left by "Neil Patterson" at "20/05/2016 - 12:49":

But isn't a civil partner a legal status - not just cohabiting - so if you haven't been through a civil partnership ceremony, surely you aren't civil partners? If you don't jointly own the property you are living in, I can't see how it applies.

Ben McMurray

14:10 PM, 14th April 2017
About 3 years ago

Reply to the comment left by "David Lovegrove" at "20/05/2016 - 16:13":

Hi David,

I know your post was a while ago now but I am very curious to find out what happened in your situation?

I am in an almost identical situation (i.e. not married yet and intend to buy a property on my own) and depending which solicitor I talk to I get different advice.

very interested to hear what happened in your case.

thanks

Ben

Ben McMurray

14:16 PM, 14th April 2017
About 3 years ago

Reply to the comment left by "David Lovegrove" at "20/05/2016 - 16:13":

Hi David,

Apologies for commenting on a post from last year!

I am in almost an identical situation to you and depending on which solicitor I speak to I get different advice.

I am very interested to hear how things turned out in your case?]

Thanks

Ben

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