Stamp duty – I do object paying tax that I am not obliged to?

Stamp duty – I do object paying tax that I am not obliged to?

10:54 AM, 7th December 2020, About 6 months ago 11

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Can anyone help me out with a Stamp Duty question? I have spoken to mortgage advisors, solicitors and the HMRC and seem to get a different answer every time. Obviously, no one likes paying extra taxes, but it just seems so bloody complicated and I do object paying tax that I am not obliged to.

Here are two scenarios I am currently facing. Any suggestions would be appreciated.

Scenario 1
I own one residential property (my primary residence).
I subsequently purchase two rental properties (cost 290 and 330K) and pay 3% additional stamp duty on each property.
If I then sell my primary residential property within 3 years of buying rental properties (and not buying another residential property at that moment in time) would I be eligible to claim a refund of the additional 3% stamp duty on one of the rental properties (the higher cost one?).

Scenario 2
I rent out my one residential property.
I subsequently purchase two rental properties (and pay the additional 3% stamp duty on each).
I then buy another residential property and within three years I then sell my original residential property (which has been rented out).
Can I claim a refund on any of the proprieties that I have paid the additional 3% stamp duty on?

Thanks

Jon



Comments

by Marlena Topple

20:43 PM, 7th December 2020, About 6 months ago

Reply to the comment left by at 07/12/2020 - 20:04
Hi Silversurfer
Apologies if I am getting confused. I dug out the article I was referring to which was printed in the Financial Times. It outlines an anomaly for people that own more than one property that move from residential to rented to residential property. This is an extract from the article.
“David Page, a director of Maidstone estate agent Page & Wells, was replacing his main residence so thought he would not have to pay the surcharge. He owns three properties which he rents out and is now buying a home to live in. So he was very surprised when his lawyer told him that his new home would be subject to the 3 per cent surcharge. That is because he and his wife do not own their current main home. They rent it from another landlord.

As the law is drafted, a landlord who lives in a house rented from someone else who then decides to buy a home to live in is subject to the additional 3 per cent SDLT on that purchase. That applies even though he is in fact replacing his — albeit rented — main residence.

Mr Page says the extra tax will cost him about £13,000, more than doubling the stamp duty due on his new home. And it is this tax bill he thinks is unfair.

“The injustice is the fact that if you own your own house and a number of others and move into your next main residence, it is not liable for the extra tax,” he says. “We are renting and are being penalised for making that choice.” “


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