Stamp duty main residence question..

[danfitzjohn]

We currently have more than 1 property which is rented out.

We have never owned a home in UK and lived in it as have worked overseas for sometime.

We would like to buy a home at approx £600k and i know we will have to pay higher rate stamp duty on it.

What I am wondering is, if we decide to buy a house approx £200k pay a lower total amount of higher rate stamp duty and then after 6 months sell it to buy the £600k house, therefore incurring the lower rate of stamp duty on the higher value house which I’ve calculated should save approx £15k in total costs

The question is - would the £200k house be considered a ‘main residence’ for both of us if my husbands works away in the week and rents a house elsewhere? Would there then be a question around main residence?

Thank you in advance

[SDLT Geek]

The bigger question about whether your proposed £200,000 property becomes your main residence arises out of your intention to live in it only as a stop gap measure. For a property to be a person's residence requires a degree of permanence and expectation of continuity that appears to be lacking in this case.

This derives from the same words used in capital gains tax legislation, there are decided cases and guidance in that context.

[danfitzjohn]

SDLT Geek

Thank you for this. I understand that in this case there doesn’t appear to be any expectation of continuity however surely if the 6 month rule is adhered to (we will use this time to find the area we want to live in) then the refund of additional duty once the next property is bought is still a valid case?

[SDLT Geek]

I do not recognise a 6 month rule. "Quality" of occupation is said to be as important as "quantity". Quality has to do with things like intentions and expectations, quantity to do with the length of occupation.

[danfitzjohn]

Thank you SDLT Geek

Would you or anyone else know where I could gain Legal advice on this??

[SDLT Geek]

You could get advice from a professional specialising in SDLT, probably a solicitor or an accountant.

[maths]

Have you ever owned a home overseas?

If so do you still have it or has it been sold?

[AdamS93]

Besides the legality point, it may be worth doing the sums again. You will incur substantial legal fees, removal fees as well as paying stamp duty twice (albeit potentially at lower rates). Not to mention the inconvenience. The savings in the end may not be worth the hassle. Just try and knock off a little extra from the asking price .

[danfitzjohn]

maths - no unfortunately no overseas property, I was living in rented..

AdamsS93 - yes I've calculated and looks like around 16k saving by doing the 2 moves, I take your point though that yes a lot of hassle - in our case we are moving to a new area so im looking at it from the perspective of that we'll move in somewhere cheaper to 'find our feet' instead of renting whilst we find our 'forever home' - I just need to make sure i dont get 'stung' twice on the higher rates as that would be a disaster !

[danfitzjohn]

https://www.countrywise.org.uk/files/sdlt_new.pdf

Stamp duty mitigation - just wondered anyone's thoughts on this - no SDLT payable just a fee to this company - too good to be true?