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Where Taxpayers and Advisers Meet

Second Property Stamp Duty - 40K Rule

Jamie2687
Posts: 2
Joined: Tue Nov 26, 2019 7:25 pm

Second Property Stamp Duty - 40K Rule

Postby Jamie2687 » Tue Nov 26, 2019 7:29 pm

Joint owners on a property worth £75k, we each own £37.5k worth each.

Would we be liable for second property stamp duty on a second property as none of us individually own an asset worth 40k.

I understand if my husband was to buy a second property on his own he would not be liable as he doesn’t have a property asset worth 40k.

I understand if I was to buy a second property on my own I would not be liable as I don’t have a property asset worth 40k.

Are we liable if we both buy another joint property? Thanks for any guidance.

Jamie2687
Posts: 2
Joined: Tue Nov 26, 2019 7:25 pm

Re: Second Property Stamp Duty - 40K Rule

Postby Jamie2687 » Tue Nov 26, 2019 9:54 pm

Anyone?

jerome.lane
Posts: 95
Joined: Mon Aug 12, 2019 8:41 am
Location: Camberley, Surrey
Contact:

Re: Second Property Stamp Duty - 40K Rule

Postby jerome.lane » Wed Nov 27, 2019 10:04 am

https://www.gov.uk/guidance/stamp-duty-land-tax-buying-an-additional-residential-property

If any of you will own, or part own more than one residential property worth £40,000 or more, you will have to pay the higher rates on your new purchase (unless there is another reason why the higher rates do not apply).
Jerome Lane
Tax Advisor
jerome.lane@stewartco.co.uk
Stewart&Co.
Chartered Accountants
Telephone: 01276 61203

CashingOut
Posts: 10
Joined: Sat Feb 25, 2017 2:49 pm

Re: Second Property Stamp Duty - 40K Rule

Postby CashingOut » Wed Nov 27, 2019 3:56 pm

I understand that if an individual owns part of a residential property then it is actually that individual’s proportionate share of the total value that applies for the £40K test.
Here that is said to be £37.5K each co-owner.
However, a married couple is treated as a single unit (unless they are no longer living together) and their interests will be combined when looking at the £40K threshold.
Hence, subject to any further exemptions, the higher rate will apply whether the second property is bought by you alone, your husband alone or together.

SDLT Geek
Posts: 174
Joined: Sun Apr 30, 2017 5:45 pm

Re: Second Property Stamp Duty - 40K Rule

Postby SDLT Geek » Sun Dec 01, 2019 6:21 pm

If the property being bought is in Wales then Land Transaction Tax has a rule aggregating the interests of spouses in this scenario.

There is no such rule for SDLT. See the Adam and Eve example here: https://www.blakemorgan.co.uk/sdlt-surcharge-on-additional-residential-properties-updated-guidance/


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