Main Residence Nomination

[MrBlu3Sky]

Hi, some advice on main residence nomination would be greatly appreciated.

BACKGROUND

1) We purchased a second home in June 2020 and paid a 3% stamp duty premium on completion.
2} We sold our original home in February 2022 and moved into the second home for 5 months as it was then our sole residence.
3} In July 2022 we completed on the purchase of another home, paying standard stamp duty.
4) We’ve never formally nominated either property as the main residence with HMRC, but assume that was implied when paying the 3% stamp duty premium at point of purchase of the second.
5) We spend about 6 months of the year in each property, spending a few weeks at a time in each property.
6) Both properties are furnished and neither are rented out in our absence.

QUESTION

1) As we purchased the most recent home less than 2 years ago, can we designate the second home as our main residence?
2) Will we have to retrospectively pay an additional 3% stamp duty on the recently purchased home if it then becomes our second home?
3) Will we then be exempt from paying CGT on the newly designated main residence IF we choose to sell it in the future?

Thanks in advance.

[bd6759]

For SDLT your main residence is a question of fact, not nomination. The nomination is a specific rule for CGT only.

For CGT, as there is no nomination it will again be based on fact. That will friend not just on where you spend the most time but where you are registered to vote, your doctor, you bank accounts etc. A nomination over-rides all of that.

You have until July 2024 to make a nomination. The nomination can be backdated to July 2022.

You will be liable for CGT for periods of was not your only or main residence (such as pre February 2022).

[MrBlu3Sky]

Thanks for the quick reply. A follow up if I may:

1) When you say "For SDLT your main residence is a question of fact, not nomination", does that mean we wouldn't have to retrospectively pay the 3% SDLT on the residence we purchased in July 2022? As mentioned below, we already paid the 3% SDLT surcharge on the property we propose to designate as our main residence.
2) If we sell the newly designated main residence in the future, how would the CGT be calculated for the period of ownership from June 2020 to February 2022?

Many thanks.

[bd6759]

SDLT applies at the relevant date. Usually for residential properties this is the day of completion. What happens after the relevant date is usually irrelevant (but may be a pointer to the true intention on the relevant date).

If, as a matter of fact, you had disposed of your main residence in February 2022, and replaced it with a new main residence in July 2022, the July 2022 transaction is charged at the standard rate. If the Feb 2022 transaction didn’t comprise of your main residence, or if you didn’t intend your July 2022 acquisition to become your main reside, then that transaction should have been liable to the higher rate.

Forget about nominations. It has no relevance for SDLT.

For CGT you can nominate whichever will be your main residence even if it is not the place where you spend most of your time. For SDLT there is no nomination: the question of fact will be determined taking into consideration the factors I mention above.

[MrBlu3Sky]

Many thanks