Claim back SDLT

[Paul86]

Hi

I've tried searching for an answer online and the hmrc but had no luck hopefully someone can help.


So My situation is.... I have sold my residential property 4 month ago currently living with parents but I am want to buy a buy to let property rent it for 1-2 year then change it to a residential mortgage for me to move into it. The question I am trying to find is am I eligable to claim back the SDLT as this would now be my only residence?

Any advise appreciated or any links to the correct info would be great.

Paul

[bd6759]

Why you buy the BTL you will only own one property, so you will only need to pay to standard rate.

[Paul86]

Sorry I forgot to mention I also own another BTL which has been owned for last 5 year. The refund was based on me not owning a residential so when I eventually change new buy to let to residential am I entitled to the money back, sorry for confusion and hope that makes sense.

Regards

Paul

[maths]

so when I eventually change new buy to let to residential am I entitled to the money back,

No.

The key test is whether there is an intention at the time of purchase to occupy the property as a sole or main residence.

Whilst you may wish to argue this point it is, in my opinion, very unlikely that HMRC will accept you satisfy this test if you intend initially to let it out, in particular for two years or even one year.

[Paul86]

Thanks for reply!

I called the hmrc this morning who pointed me to a document on there website, he said that I would but he was very vague, I've looked through the document but to be honest I'm not 100% what I'm looking at he said say it was in chapter 3 of the link below.

https://www.gov.uk/government/uploads/s ... erties.pdf

Regards

Paul

[maths]

HMRC are not overly helpful and typically wrong when they attempt to tender "advice".

Check para 3.36.

[Paul86]

Thanks maths

What is this intention test they are talking about, is it a form that I would have to fill out to see if I meet the criteria?

So for instance if I rent the property out for the cost of the mortgage only it would not be classed as an income because my intention is to live in it after a certain time and make it my residence?

Regards

Paul

[Paul86]

The reason I don't want to move into the property as it needs work carried out and not living in it would give me time to save whilst it's rented for a year even if the rent basically covers the mortgage So I'm not making profit.

Regards

Paul

[maths]

The "intention test" is what must be satisfied if on the purchase of a dwelling the purchase is to be treated as a replacement of a sole or main residence which means no 3% SDLT charge is then levied (assuming all other conditions are satisfied).

Even if you make no profit from letting the property out, it is being used to generate income.

"Intention" is a tricky point. The courts at some point may consider the point but for the time being HMRC effectively make the rules albeit you could challenge them if you wanted.

I would be buying expecting to pay the 3% but you could try and get away without paying it. A solicitor acting for you may simply accept that no 3% is payable and go along with you.

However, for what it's worth, my opinion is that it is payable on your facts.

[Paul86]

Thank you all for advice, it makes more sense now.

Regards

Paul