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Where Taxpayers and Advisers Meet
Stamp duty
My fiance and I are buying a property and have been told that we need to pay the new stamp duty surcharge. I currently own the property that we both live in but we will be buying the new property jointly. My fiance is a UK resident and owns a property in Poland, which his mother lives in (without any formal contract/rental agreement) which rate should we be paying?
Re: Stamp duty
Are you selling the property you currently live in?
At the moment, regardless of the answer to that question, you will pay the additional SDLT due to your fiance owning another property.
If you were married AND you are selling the property you currently both live in then you would not need to pay the additional SDLT.
If you buy it alone (your fiance can own a minor interest only - less than 40K) then you would not have to pay the additional SDLT if you are selling your main home.
It is possible (although not certain) that you might be entitled to a refund of the additional SDLT when you marry if you sell the property you currently live in when you buy the new property before you are married.
If there is no mortgage on the property that you live in then it's also possible that you could give it to your fiance then he could sell it as part of the transaction. In theory that would also enable you to avoid the additional SDLT. However I'm not sure if it would still count as a disposal of his main residence if he'd only owned it for a few seconds and it might also fall foul of anti-avoidance regulations. (Also assumes that there would be no CGT charge on the gift)
It might even be possible to do the above if there is a mortgage, however that needs to be done extremely carefully as it might, itself, trigger another SDLT charge, making things worse, not better.
You should probably assume that you will have to pay the additional SDLT unless you can marry before completion. Depending on the amount of extra SDLT it might be worth seeking professional advice on the possible ways to avoid paying it but there's no guarantee that there are any ways to avoid it.
At the moment, regardless of the answer to that question, you will pay the additional SDLT due to your fiance owning another property.
If you were married AND you are selling the property you currently both live in then you would not need to pay the additional SDLT.
If you buy it alone (your fiance can own a minor interest only - less than 40K) then you would not have to pay the additional SDLT if you are selling your main home.
It is possible (although not certain) that you might be entitled to a refund of the additional SDLT when you marry if you sell the property you currently live in when you buy the new property before you are married.
If there is no mortgage on the property that you live in then it's also possible that you could give it to your fiance then he could sell it as part of the transaction. In theory that would also enable you to avoid the additional SDLT. However I'm not sure if it would still count as a disposal of his main residence if he'd only owned it for a few seconds and it might also fall foul of anti-avoidance regulations. (Also assumes that there would be no CGT charge on the gift)
It might even be possible to do the above if there is a mortgage, however that needs to be done extremely carefully as it might, itself, trigger another SDLT charge, making things worse, not better.
You should probably assume that you will have to pay the additional SDLT unless you can marry before completion. Depending on the amount of extra SDLT it might be worth seeking professional advice on the possible ways to avoid paying it but there's no guarantee that there are any ways to avoid it.
Re: Stamp duty
If you jointly purchase your new residence (the 3% charge applying) but then at a later date sell your current residence (currently owned only by you) when you are married (not otherwise) the 3% will be reclaimable.It is possible (although not certain) that you might be entitled to a refund of the additional SDLT when you marry if you sell the property you currently live in when you buy the new property before you are married.
Your current residence is also the residence of your fiance although he doesn't own any interest in the residence. Transferring an interest in your current residence to your fiance prior to purchase of the new property is I suspect likely to be viewed as tax avoidance and probably should be avoided.
Re: Stamp duty
Thanks both - really helpful to get a second opinion. Looks like we do have to pay, but always worth checking!
