Is the extra 3% due here?

[Scotkat]

Morning - hoping you can help...

I am purchasing a property and selling my main residence. However the sale of my main residence will complete after the purchase of my new property.

I've looked at the guidelines online, and see that if we become liable for additional stamp duty but this liability disappears between completion and the stamp duty being due (i.e. within the 30 days of completion) then we don’t have to pay it and then claim it back. The guidance states we complete the form using the codes for the standard SDLT. My solicitor thinks I should just pay the additional and claim back but I am a)nervous I won't get it back and b) don't have it so would have to borrow.

Here's what I've found online at HMRC: can anyone give their thoughts here? confused!

Reference here - 3.27 of https://www.gov.uk/government/uploads/s ... erties.pdf “In the case of a disposal of a previous main residence following a purchase of a new main residence, the land transaction return will have been made based on the higher rates of tax, unless the disposal happened before the date on which the land transaction return must be submitted. In such a case the land transaction return should be completed as if the higher rates do not apply.”

[bd6759]

I thin the HMRC reference you have found explains the position quite succinctly.

[Scotkat]

Thanks - agree, so not sure why my solicitor is saying pay and reclaim.

[maths]

Don't have the legislation or SDLT papers to hand but seem to recall para 27 of the Nov Document being slightly amended from that para in the March Document.

Apart from the Nov para 27 there is no specific reference in the legislation to not having to pay the 3% if sale of old residence is within 30 days after new purchase. Maybe appears in the Notes to the form to be filed but can't recall as never had this position before.

It may be that your solicitor is unaware of para 27 and/or feels it may be dangerous not to pay the 3% first due to risk of penalties etc. He's gone for the safer option of paying the 3% and then reclaiming.

[bd6759]

The March document says

The government appreciates that for purchasers who own two or more properties temporarily due to unintended circumstances, paying the higher rates of SDLT (and to potentially claim a refund shortly after) may seem burdensome.

In order to allow individuals whose purchase of a new main residence precedes the sale of a previous main residence by only a few days, it may be preferable to allow the normal rates of SDLT to be paid as long as the previous main residence has been sold by the time the SDLT return is filed.

Para 8 Sch4A does not say this. It simply says that the return can be amended at a time within the period ending with the later of 12 months from the due date or 3 months after the relevant transaction.

The guidance on GOV.UK can be treated as HMRC policy. The alternatice is to submit one return, then submit an amendment before the due date, paying only the tax due per the amendment.