This site uses cookies. By continuing to browse the site you are agreeing to our use of cookies. To find out more about cookies on this website and how to delete cookies, see our Cookie Policy.
Analytics

Tools which collect anonymous data to enable us to see how visitors use our site and how it performs. We use this to improve our products, services and user experience.

Essential

Tools that enable essential services and functionality, including identity verification, service continuity and site security.

Where Taxpayers and Advisers Meet

Interim Transaction Rule?

KeyFutures
Posts: 8
Joined: Wed Aug 06, 2008 3:33 pm

Interim Transaction Rule?

Postby KeyFutures » Tue Mar 24, 2020 2:45 pm

Hi,

I sold my main residence in August last year and am now in rented accommodation. I am in the process of buying two properties, one a buy-to-let, the other a new main residence.

My belief was, supported by various articles I have read and the HMRC online stamp duty calculator, that if I buy the buy-to-let first I will only own one property and therefore will not have to pay the higher rate of stamp duty. As the new main residence will then be purchased within three years of the old main residence, that too will not attract the higher rate of stamp duty.

However, my solicitor has advised me that under the "interim transaction rule" that after the main residence is purchased I may have to pay the higher rate of stamp duty on the previous purchase of the buy-to-let.

Can anyone clarify this situation for me please.

Thanks.

maths
Posts: 7952
Joined: Wed Aug 06, 2008 3:25 pm

Re: Interim Transaction Rule?

Postby maths » Tue Mar 24, 2020 3:10 pm

I'm not an expert on SDLT but have no idea as to what is an interim transaction rule.

If you purchase a buy to let and on "completion" you own just the one property then the 3% surcharge will not apply.

If you subsequently purchase a main residence which will thus constitute a replacement for your previous residence then again no 3% surcharge applies.

I assume the two purchases do not form part of the same transaction.

KeyFutures
Posts: 8
Joined: Wed Aug 06, 2008 3:33 pm

Re: Interim Transaction Rule?

Postby KeyFutures » Tue Mar 24, 2020 3:18 pm

No Maths, they are not part of one transaction.

maths
Posts: 7952
Joined: Wed Aug 06, 2008 3:25 pm

Re: Interim Transaction Rule?

Postby maths » Tue Mar 24, 2020 4:02 pm

I have been reliably informed by an SDLT expert that the "intermediate transaction rule" applies re LTT in Wales, not England.

You didn't mention the land was in WALES??

KeyFutures
Posts: 8
Joined: Wed Aug 06, 2008 3:33 pm

Re: Interim Transaction Rule?

Postby KeyFutures » Tue Mar 24, 2020 5:26 pm

Hi Maths,

I am pleased to say the properties are in Cumbria, not Wales.

The only reference to the interim transaction rule I could find on Google was on a Welsh tax forum website so you information sounds correct. :)

Thanks.

maths
Posts: 7952
Joined: Wed Aug 06, 2008 3:25 pm

Re: Interim Transaction Rule?

Postby maths » Tue Mar 24, 2020 6:41 pm

Is your solicitor Welsh??

If not he should know better..

SDLT Geek
Posts: 200
Joined: Sun Apr 30, 2017 5:45 pm

Re: Interim Transaction Rule?

Postby SDLT Geek » Tue Mar 24, 2020 10:30 pm

I wonder if you have seen Example 7 in the 20 SDLT Case Studies here: https://2kxoi048lz5d327itw3e7f8c-wpengine.netdna-ssl.com/wp-content/uploads/Downloads/SDLT-case-studies-for-3-surcharge-20.01.20.pdf That confirms the point for transactions in England.

KeyFutures
Posts: 8
Joined: Wed Aug 06, 2008 3:33 pm

Re: Interim Transaction Rule?

Postby KeyFutures » Wed Mar 25, 2020 11:39 am

Thanks SDLT Geek, that is a useful document.

Example 7 mirrors my situation closely and I see the note at the bottom about interim transactions applying to transactions in Wales.

I do hope that in the last paragraph of example 7 they have got the property numbers wrong as it seems to contradict what is said before.

"It is not a problem that Glen acquired Property 1 between selling his main home and buying Property 2 as when he acquired Property 1 it was not with the intention of living in it as his only or main residence".

maths
Posts: 7952
Joined: Wed Aug 06, 2008 3:25 pm

Re: Interim Transaction Rule?

Postby maths » Wed Mar 25, 2020 2:22 pm

It should read I believe:

It is not a problem that Glen acquired Property 2 between selling his main home and buying Property 1 as when he acquired Property 2 it was not with the intention of living in it as his only or main residence and at that time was Glen's only property.

SDLT Geek
Posts: 200
Joined: Sun Apr 30, 2017 5:45 pm

Re: Interim Transaction Rule?

Postby SDLT Geek » Wed Mar 25, 2020 7:21 pm

I agree with Maths. I am sure that is what is meant.


Return to “Stamp Duty, Stamp Duty Land Tax, SDLT”

cron