Main home exemption, temp stay in own let flat

[Bonswattomer]

I'm not sure I've seen this query, but apols if it has already been answered, please link me.

We are planning to move our main home and our 2 letting flats to new area of the UK. We realise that the two letting flats, when purchased, will be subject to the 3% surcharge. (I prefer to have my lets close to home and manage them myself).

In order to make the main home sale and purchase easier, our plan is to sell and purchase as separate transactions, to cut chains down to a minimum. So once the main home is sold, we will need to live somewhere while we buy the new home.

We could rent a home for ourselves to live in, but if we had "moved" one of the letting flats to the new area by the time we needed the temporary home, we could live more cheaply and flexibly in this letting flat instead. However, as that would become our main dwelling, I'm concerned that we might be exposed to SDLT on the new (and larger) dwelling when we eventually buy it, and lose any exemption we would get from the previous main dwelling sale.

I cannot interpret any help in the guidance here, except there is some talk about "intention". If this will work if that it was our intention all along, how do we clearly establish that intention, please?

Or is the only sensible plan to pay someone else rent?

Thank you for your help.

[SDLT Geek]

There are several aspects here.

One point relates to the order of transactions. You might buy the new property intended for rental before you sell you present home.

If that is the case then you should be able to escape the surcharge on your new home purchase by virtue of the exception from the surcharge for the replacement of an only or main residence. Since the date of the sale of your present home, you will not have bought another property.

That would be "cut and dried".

Where interpreting your intentions is more of an issue is if the order of events is:
(a) Sell your present home.
(b) Buy a property intended for renting out but which you will live in for a short while.
(c) Buy the new home and move in.

If your intention at stage (b) is to stay there for a short while then there would not be the degree of permanence or expectation of continuity that the cgt cases talk about for that property to count as your "residence".

This could be evidenced in various ways. Perhaps the most obvious would be by paying the surcharge on the first purchase. If financing is needed then what is said to the lender would be good evidence.