Stamp Duty 1st Time Buyer

by **CaptainB** on Wed Mar 30, 2011 8:54 pm

Hi there,

I currently live at the family home (with my mother/brother) and I have recently purchased the property directly nextdoor to the family home. The purchase has been completed in my name with a mortgage in my name and I am a first time buyer, so we have received stamp duty tax relief on the purchase.

However, we have now put my elderly grandmothers house on the market and we intend to move my elderly grandmother nextdoor (rather than me living in the property) as the sole occupier of the property, with me remaining at the family home for the time being.

My questions is that, if we move my elderly grandmother nextdoor (and I remain where I am at the family home) and we put my grandmothers name on the council tax, bills etc, would I therefore be liable to pay the stamp duty tax (as I wouldn't actually be living at the property as intended ?).

Thanks in advance,

Ben

by **maths** on Wed Mar 30, 2011 9:34 pm

Not sure I follow.

If the purchase was less than £250,000 the relief to which you refer applies and no SDLT is payable if you bought the house irrespective of whether you live in it or not.

by **CaptainB** on Wed Mar 30, 2011 10:03 pm

Hi, thanks for replying.

Yes, the purchase price was below £250k and I am a first time buyer.

However, I will not actually live in the property and it will not be my main home. My elderly grandmother would move into the property instead and it would be her main home with her name on the council tax etc (leaving me to stay at the family home nextdoor) so the question is, would HMRC be able to charge me stamp duty as I said that I intended to live there (but will not).

Hope this makes sense !

Thanks again.

Ben

by **maths** on Wed Mar 30, 2011 10:43 pm

The relevant legislation provides:

he purchaser, or (if more than one) each of the purchasers, is a first-time buyer who intends to occupy the residential property as the purchaser’s only or main residence, and

Thus, if you satisfy this condition no SDLT is payable.

If, however, you have no intention of the property being your only or main residence SDLT is payable and you shouldn't have signed confirming it.

I am not aware that you need to move in on "Day One" to satisfy the condition; the test is one of intention.

by **section 44** on Thu Mar 31, 2011 9:59 am

maths wrote:I am not aware that you need to move in on "Day One" to satisfy the condition; the test is one of intention.

Agreed. It does not matter if it is some time before you move in. Provided that at the effective date (typically completion) you had the relevant intention, this is sufficent. Clearly intentions can change and if, as a fact, you have not moved in then HMRC may query whether you ever had that intention but this is merely an evidential matter.

Presumably you do not consider that your grandmother has any beneficial interest in the property.

by **CaptainB** on Thu Mar 31, 2011 1:15 pm

Thank you both for your responses, much appreciated.

We now intend to move my elderly grandmother into the property (rent-free) for as long as she is with us, then I would move into the property after she is gone (so it would then become my main home).

So the intention is still for me to move in but due to a change in circumstances (my grandmothers deteriorating health) this will be delayed somewhat.

We intend to sell my grandmothers home (which she owns outright) and pay off the mortgage I have taken out on the property nextdoor with the proceeds.

Though, if my grandmothers property does not sell we may rent it out and keep the mortgage running in my name.