SDLT 3% surcharge

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    SDLT 3% surcharge

    In 2017 I owned a couple of BTLs + my private residence. We intended to retire to Spain and sold our main home. With the proceeds I purchased a block of 8 flats (SDLT for the flats included the surcharge). We decided to postpone Spain and have been renting ever since. We have now decided to remain, keep the flats and the other 2 rentals and buy our own home. I have two questions if anyone could help me. First, Despite owning other properties, am I correct in my assumption my new residential home would not attract the 3% surcharge since it is replacing our old home. Secondly, I do not plan to live in my new home immediately. Whilst it is intended to be our main residence, we will defer moving for another 3 years until my son has finished school and rent out the new home. On the one hand I can see HMRC arguing if its purpose is to be a rental then the surcharge would apply, but it would be my home despite renting it out. No different than if I moved in for 6 months then rented it out. Do you think my assumption is correct. Since it's self assessment I think I can justify my position, but there is always the risk of getting pulled-up if you get it wrong.

    Any thoughts would be welcome.

    #2
    No, your assumption is not correct.

    When you buy the property, you would have to pay the surcharge.
    There is a specific mechanism in place to accomodate the situation when you buy a new home and don't sell your previous home immediately, but that has a three year limit (and doesn't apply in this situation).

    It may be that someone who knows more than me can pull a rabbit out of the hat, but I think you have now lost your residential home exemption.
    When I post, I am expressing an opinion - feel free to disagree, I have been wrong before.
    Please don't act on my suggestions without checking with a grown-up (ideally some kind of expert).

    Comment


      #3
      I looked into the 3 year "grace" period, but my understanding is the same as yours as this applies to those who buy a 2nd residence before selling their first. In this case the 3% surcharge is payable on the purchase of the new home, but you get 3 years in which to claim it back upon the sale of the old residence. In my case it would seem unfair to have to pay a surcharge on my main home, but because it's a bit of an unusual situation there is little or no guidance, even from HMRC. That said, using their online SDLT calculator the surcharge is not due, but then again the calculator is a bit restricted in terms of the questions it asks.

      Comment


        #4
        I agree and I think that that particular ship has sailed.

        It does seem unfair, but I think it's how it works out.
        Anyone who buys a property before they buy their own home is in the same trap.
        When I post, I am expressing an opinion - feel free to disagree, I have been wrong before.
        Please don't act on my suggestions without checking with a grown-up (ideally some kind of expert).

        Comment


          #5
          I found this (see link), If this is correct I am off the hook:

          https://www.theguardian.com/money/20...tra-stamp-duty

          Comment


            #6
            Originally posted by Badgerrus View Post
            I found this (see link), If this is correct I am off the hook:
            That link is correct, you can claim the additional SDLT back if you sell your main home and buy a replacement within 3 years.

            But, unless I've misunderstood, the 3 years has expired for you.
            When I post, I am expressing an opinion - feel free to disagree, I have been wrong before.
            Please don't act on my suggestions without checking with a grown-up (ideally some kind of expert).

            Comment

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