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Where Taxpayers and Advisers Meet

SDLT with non-main-residence abroad

schtirlitz
Posts:1
Joined:Fri Oct 30, 2020 11:32 am
SDLT with non-main-residence abroad

Postby schtirlitz » Fri Oct 30, 2020 1:43 pm

Hi dear community, hope you can guide me with my question.

I am UK resident, have been living here for the last 4 years. I rented my accommodation for the whole time in the UK, but now considering to buy my first flat, which will become my primary residence. However, I still own a flat abroad, which mostly stays empty, however sometimes is being used by my distant family, so I am not getting any rent for it but not living there as well, as I have work and family in the UK.

If I buy flat in London below 500k until 31 March 2021, will I still have to pay 3% SDLT surcharge for "second home", eventhough it will not be "second" by first and only primary residence?
Getting confusingly different answers from 2 conveyance companies, so don't know which one to choose...

Thank you.

SDLT Geek
Posts:230
Joined:Sun Apr 30, 2017 5:45 pm

Re: SDLT with non-main-residence abroad

Postby SDLT Geek » Fri Oct 30, 2020 9:02 pm

The 3% extra SDLT is due if your flat abroad is worth £40,000 or more.

maths
Posts:8256
Joined:Wed Aug 06, 2008 3:25 pm

Re: SDLT with non-main-residence abroad

Postby maths » Sat Oct 31, 2020 5:30 pm

The key to ascertaining whether a transaction is a higher rate transaction (ie subject to a 3% extra charge) is simply whether another "dwelling" is purchased where an interest in another dwelling already subsists.

A "dwelling" is a building used or capable of being used as a dwelling (basically, a place in which to live) ie doesn't have to be a "main residence".

SDLT Geek
Posts:230
Joined:Sun Apr 30, 2017 5:45 pm

Re: SDLT with non-main-residence abroad

Postby SDLT Geek » Sat Oct 31, 2020 7:12 pm

Well put, Maths.

ragsyad
Posts:1
Joined:Sat May 29, 2021 2:23 am

Re: SDLT with non-main-residence abroad

Postby ragsyad » Sat May 29, 2021 2:48 am

How is the value of 40k derived in this case?
e.g. if the abroad property was brought with some 20k value around 10+ years back, however with market conditions the property is now worth 60k.
Would it mean the new home purchase in UK would result in additional duty of 3%?

Does the applicant have to submit the original purchase agrement as proof or some other respective government valuation proof?

SDLT Geek
Posts:230
Joined:Sun Apr 30, 2017 5:45 pm

Re: SDLT with non-main-residence abroad

Postby SDLT Geek » Sat May 29, 2021 7:38 pm

It is the market value of your existing value on the date of the completion of the new property which is needed. If the market value is now £60,000, then the extra 3% will be due.

There is no need to submit any evidence to HMRC unless they ask for it. It seems unlikely that they will ask for it given that you will be self-assessing to pay the extra 3%.

TSeeker
Posts:5
Joined:Mon May 31, 2021 1:28 pm

Re: SDLT with non-main-residence abroad

Postby TSeeker » Tue Jun 15, 2021 12:33 am

> The 3% extra SDLT is due if your flat abroad is worth £40,000 or more.

To me that seems totally incorrect and misleading. It seems to suggest that whether you pay SDLT higher rate on your 2nd home is somehow linked to the value of your already owned 1st home (in the UK or abroad). Can you point out where is that written ?

If you search SDLT rules, it's the opposite. If your new home, the 2nd one that you are purchasing in the UK, is worth more than £40K and you already have an existing unsold property anywhere in the world, then irrespective of what the value of the existing property ever was or will be, you pay the higher rate surcharge. The surcharge is totally independent of the value of existing property and totally dependent on whether the value of the new and additional property is > £40K or not.

bd6759
Posts:3558
Joined:Sat Feb 01, 2014 3:26 pm

Re: SDLT with non-main-residence abroad

Postby bd6759 » Tue Jun 15, 2021 10:27 pm

You are incorrect.

If you acquire a new interest worth more that £40000, and already have an interest in another property worth £40000, the additional 3% will apply.

https://www.legislation.gov.uk/ukpga/2003/14/schedule/4ZA

See para 3


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