Extra stamp duty

[limoges]

My wife and I left the UK about 15 years ago to reside in Spain and sold our primary home in the UK.
Due to advancing age and deteriorating health we need to return to the UK where we will have the support of our children.

Whilst resident in Spain we invested in a small buy to let in the UK and have rented it out for several years.

We now need to purchase a property in the UK for our use but are concerned that ownership of our buy to let may result in the extra 3% stamp duty. On the property we are considering purchasing this will would result in an extra £10,200 stamp duty.

Is there any way out from this extra charge, as we are in effect only replacing the primary home we sold 15 years ago prior to our departure for Spain.

[bd6759]

Are you selling your home in Spain?

[limoges]

We never bought in Spain but rented throughout the period we resided there.

[bd6759]

Then you will be liable to the extra 3%

[ptpash]

bd6759

On what basis did you conclude the 3% is payable?

[bd6759]

Because after this acquisition you will own 2 residential properties, and you are not replacing a property that was your main residence.

[ptpash]

But the property may have been their sole or main residence.

[limoges]

For 15 years our rented home in Spain was our main residence, as we disposed of our main residence in the UK before we left.

We have been informed that a UK resident who decides to move house can sell his/her main residence and acquire a new main residence without this punitive additional stamp duty, even though he/she has buy to let properties.

Surely everyone has the right to a main residence, irrespective of the fact that their previous main residence was rented and in Spain.

One fears that even if we pay the extra 3% stamp duty, the property acquired would not be recognised as our main residence and be subject to CGT if ever it was sold.

God help us all if Osbourne ever replaces Cameron.

[bd6759]

Anyone who disposes of their old residence will not be liable to the additional 3% if they buy a new residence. There is a simple test: have you disposed of your main residence and acquired a new main residence? In your case you have acquired a new main residence without disposing of your old one. For this purpose selling a residence 15 years ago is irrelevant. The acquisition should be within 18 months of the disposal.

If you move house in the future, you will not be liable to the additional charge because you will be replacing one residence with another.

Why do you think that the property will not be recognised as your main residence? If you live it as your main residence, it is as a matter of fact your main residence.

[maths]

The legislation is a bit more complicated than Press comment makes out.

It is true that the 3% is not payable if the sale of an only sole or main residence is replaced by another sole or main residence.

It is likely that your Spanish property in which you live would in principle qualify as a sole or main residence.

The replacement residence must be acquired within 3 years (not 18 months) of disposal of the old one (ie before or after).

The possible problem in your particular case (although of course I am not in possession of the facts) is that a rental property does not qualify as a residence where the lease does not exceed 7 years at the date of grant of the lease.