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Where Taxpayers and Advisers Meet

Replacing main residence, part-funded by remortgaging rental property

robshaw33
Posts: 2
Joined: Sat Nov 10, 2018 6:37 pm

Replacing main residence, part-funded by remortgaging rental property

Postby robshaw33 » Sat Nov 10, 2018 6:51 pm

Hi,
I am selling my current Main residence and moving to a new Main residence on the same completion day.
aka replacing Main residence.
I have a second property which has been a rental property for years. It was my former home 15 years ago so had a residential mortgage with consent to let, income taxed etc.
High street lenders wouldnt touch the new Main residence for mortgage - So to fund the purchase of the new Main residence i remortgaged the rental property to a BTL mortgage and those funds in addition to funds from the sale of current Main residence cover the cost of the new Main residence.
My solicitor quoted for SDLT at the lower rate originally, but in the completion statement has declared SDLT is due at the higher rate.
Has the solicitor made a mistake? or have we come under some bizarre loophole?
thanks
Rob

bd6759
Posts: 3010
Joined: Sat Feb 01, 2014 3:26 pm

Re: Replacing main residence, part-funded by remortgaging rental property

Postby bd6759 » Sun Nov 11, 2018 12:37 pm

Looks like a mistake. You are clearly replacing your main residence. The source of funding has no effect for SDLT.

robshaw33
Posts: 2
Joined: Sat Nov 10, 2018 6:37 pm

Re: Replacing main residence, part-funded by remortgaging rental property

Postby robshaw33 » Sun Nov 11, 2018 1:06 pm

Hi bd6759
Yes we hope it is a mistake.
The only other possiblity that occurs to me that might have happened.
With the main residence exemption, we dont have to pay the higher rate (for having more than one property on completion day) - then claim back from HMRC?
We just pay the lower rate within 30 days of completion?
Thanks
Rob

bd6759
Posts: 3010
Joined: Sat Feb 01, 2014 3:26 pm

Re: Replacing main residence, part-funded by remortgaging rental property

Postby bd6759 » Sun Nov 11, 2018 6:30 pm

That's not right either. The legislations requires you to have sold a residence during a period of three years ended with the date of the transaction: which is what you have done.


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