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Where Taxpayers and Advisers Meet

Additional 3% Stamp Duty & Foreign Properties

DesWalker
Posts:2
Joined:Sun Aug 20, 2017 7:40 pm
Additional 3% Stamp Duty & Foreign Properties

Postby DesWalker » Sun Aug 20, 2017 8:02 pm

Hi All,

I have never owned a property in the UK. For the last 15 years I have lived with my elderly mother in her property. I am on the electoral roll at this address, HMRC send my tax returns to this address, my doctor, banks and everybody else has me as being resident at this address.

Four years ago I bought an apartment in Spain. It is a holiday home for me and my mother and we spend three months a year there on average. I am not on any electoral roll over there and have never applied for any firm of residency in Spain.

I now wish to buy a property in the UK around the corner from my mother. Am I liable for the additional 3% SDLT on this purchase ?

I suspect that the answers I get back will be "yes" as all my reading leads me to believe that I am liable. But somehow I get the feeling that my situation is not one intended to be caught up by this tax and wonder whether I would ever be prosecuted if I pleaded lack of clarity at the time of purchase and did not declare my property in Spain to the conveyancer.

On a very similar theme, there must be hundreds of thousands of couples (or individuals) in this country with main residences in the UK and holiday homes abroad. Are we to believe that every time one of these couples (or individuals) decides to move their main residency in the UK from one house to a different house then they will always be liable for the additional SDLT because they also have a holiday home in Spain ? I strongly suspect such people would not be liable for this SDLT as otherwise there would be uproar amongst all these people. Isn't my situation identical to this situation and hence shouldn't I just plead ignorance and not tell my conveyancer about the Spanish property.

Any thoughts gratefully received.

Des

maths
Posts:8507
Joined:Wed Aug 06, 2008 3:25 pm

Re: Additional 3% Stamp Duty & Foreign Properties

Postby maths » Sun Aug 20, 2017 9:46 pm

As I am sure you are aware "ignorance of the law is no excuse" however unreasonable this may be.

Yes, as you suspected, you are subject to the 3% on purchase as you will then own two properties.

Where an individual owns their own residence which is sold and a replacement residence purchased (even if that person also owns say a buy to let) then the 3% does not apply.

DesWalker
Posts:2
Joined:Sun Aug 20, 2017 7:40 pm

Re: Additional 3% Stamp Duty & Foreign Properties

Postby DesWalker » Sun Aug 20, 2017 10:29 pm

Thank you very much for the quick reply.

It is so frustrating.

So if I owned the house I currently live in then I could buy a new house paying the additional SDLT and then sell my existing house within three years and reclaim the SDLT. Net result - I own the new property and my place in Spain and have not paid the SDLT.

But because I don't own my existing house I am liable for the SDLT on the new purchase and have no hope of a rebate. I achieve the same end result as above (new property plus place in Spain) but this time I have paid the SDLT.

How can that be fair ? I am not taking up any more space on this island in either of the two scenarios outlined above but one affords me a rebate and another does not. It stinks and is simply an ill-thought-out law. As I say I am tempted to play dumb because it is so clearly rigged against me for no good reason at all. I would have some sympathy if my holiday home was in the UK but how can it be fare for the UK government to effectively tell me "either get lost to Spain to live or pay the extra SDLT". I firmly believe that this is a loophole which would not be prosecuted unless someone can explain the difference in the two scenarios above.

Thanks in advance of any more comments. Is there anyone I can appeal to on this matter ?

Rgds,

Des


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