Stamp duty on main residence?

Stamp duty on main residence?

11:19 AM, 4th December 2020, About A year ago 7

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I owned 2 properties – 1 that I rented out, and lived in my other property as my main residence. I sold my main residence on 29th May 2019, bought 2 more BTL properties and I am living in a static caravan.

I’m thinking about buying a new main residence, but I don’t think it’s quite the right time now. I’m concerned that I’ll miss the grace period for stamp duty on main residences, and will end up paying the additional 3% because I have more than one property. I thought there was a period of 24 months that allowed you to buy a main residence, but someone told me that it was 36 months, which would take the pressure off.

I called my solicitor who said it was all very complicated and said I should call HMRC. Can anyone advise how long I’ve got before I have to pay the higher stamp duty please, or should I call HMRC?

Kenna



Comments

by Neil Patterson

11:30 AM, 4th December 2020, About A year ago

Hi Kenna,

If you own more than 1 property and purchase a new main residence without selling the old main residence simultaneously you will pay the additional 3% Stamp Duty surcharge. However, if you sell the old main residence within 3 years you will get a refund of that surcharge.

You are though doing this in reverse which is different so please see below from HMRC for the different rules.

Please see >> https://www.gov.uk/government/publications/stamp-duty-land-tax-apply-for-a-repayment-of-the-higher-rates-for-additional-properties

You can apply for a repayment of the higher rates of SDLT for additional properties if you’ve sold what was previously your main home if you’re either the:

main buyer of the property which was charged at the higher SDLT rate
agent acting for them
You must have sold your previous main residence within 3 years of buying the new property to qualify for a refund unless exceptional circumstances apply.

Properties sold on or before 28 October 2018
If you sold your previous main residence on 28 October 2018 or earlier, HMRC must have your request within 3 months of the sale of that previous main residence, or within 12 months of the filing date of the return relating to the new residence, whichever is later.

Properties sold on or after 29 October 2018
If you sold your previous main residence on 29 October 2018 or later, HMRC must have your request within 12 months of the sale of that previous main residence, or within 12 months of the filing date of the return relating to the new residence, whichever is later.

Exceptional circumstances
You may still be able to apply for a refund, if you purchased your new home on or after 1 January 2017 and were unable to sell your previous home within 3 years. To be able to get the refund, the delay in selling must be because of reasons outside of your control. These may be, but are not limited to:

the impact of coronavirus (COVID-19) preventing the sale
an action taken by a public authority preventing the sale
Once the reason has ended, you must sell the previous home to be able to apply for the refund. You can then write to HMRC and include:

an explanation on why you were unable to sell your previous main home within 3 years
the other required information
You should send the information to:

BT Stamp Duty Land Tax
HM Revenue and Customs
BX9 1HD
You can find more information in our SDLT manual.

by Blodwyn

13:34 PM, 4th December 2020, About A year ago

I am a retired solicitor albeit never a conveyancer (professional negligence, insurance defence and disciplinary) but ought not a specialist conveyancer know the answer to this question without telling the client to ask the Revenue??

by MuckyBoots

13:49 PM, 4th December 2020, About A year ago

Reply to the comment left by Neil Patterson at 04/12/2020 - 11:30
Hi Neil

Thanks for your reply, it is a bit confusing. On reading your reply and the SDLT manual, am I right in thinking that as I sold before I bought, and it was after 28th October 2018, I will pay the higher rate of SDLT on the new main residence, but then have to request a refund within 12 months of filing the new purchase (as long as it is within 3 years)?

Many thanks
Kenna

by silversurfer2017

14:38 PM, 4th December 2020, About A year ago

You get no concessions at all for living in a caravan. Why not move into one of your recent BTL property purchases and make that your main residence and claim back the extra 3% SDLT you paid . Live there for 6 months or so until you find your new main residence on which you will pay the extra 3% SDLT on. Within 36 months sell your previous main residence (which was a buy to let) and then claim back the 3% on your new permanent main residence.

by Mark Crooks

7:15 AM, 5th December 2020, About A year ago

Reply to the comment left by Lindsay Keith at 04/12/2020 - 13:34That most definitely rings alarm bells! At the very least you would have thought they would investigate it and come back to the client, if only to maintain some level of competence.

by Polly

16:04 PM, 5th December 2020, About A year ago

All very confusing but I think thats the ploy of HMRC!
I have been trying to ascertain if in selling a BTL property can I invest that money into another BTL without paying CGT on the first sale?

by silversurfer2017

19:18 PM, 5th December 2020, About A year ago

Reply to the comment left by Polly at 05/12/2020 - 16:04The answer is no because having BTL properties is not regarded as a business by HMRC. Now if you are talking about holiday lets then you can roll over the CGT from one property in to a new property acquisition. Running holiday lets is regarded as a business. Holiday lets attract the lower rate of 10% and 20% CGT anyway. The income from holiday lets is also regarded as earned income rather than investment income from BTL properties.


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