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Where Taxpayers and Advisers Meet

Which property to sell to claim back additional SDLT?

fabs35
Posts: 14
Joined: Wed Aug 06, 2008 3:04 pm

Which property to sell to claim back additional SDLT?

Postby fabs35 » Mon Feb 11, 2019 2:31 pm

This may be straight forward and I may be over-thinking this...

My wife and I bought property A in 2005, lived in it until 2010 as our main residence, at which point it was rented out until Aug 2017. We then moved back into it (with the intention of living there indefinitely), before buying our new/current main residence (property C) in Oct 2018.

At the point that we moved out of property A in 2010, we purchased and moved into property B, living there until Aug 2017, before moving back into property A. We then rented out property B, on a four year lease (which comes to an end in July 2021).

When we purchased property C, we had to pay the additional SDLT. My question is - and assuming our decision is purely based on SDLT - which property (A or B) would we need to sell in order to be able to claim back the additional SDLT?

Additionally, we are considering splitting property A into two flats. Would we be able to sell one of the flats (and retain the other as a BTL) and claim back the additional SDLT?

Any thoughts appreciated.

SDLT Geek
Posts: 155
Joined: Sun Apr 30, 2017 5:45 pm

Re: Which property to sell to claim back additional SDLT?

Postby SDLT Geek » Mon Feb 11, 2019 5:13 pm

Selling A or B entirely should entitle you to recover the extra 3% paid on C. You had both lived in each of A and B as your only or main residence at some point in the three years leading up to the purchase of C.

It would not work to convert A into two flats and sell only one of them, it would not entitle you to reclaim the extra 3% paid on C.

fabs35
Posts: 14
Joined: Wed Aug 06, 2008 3:04 pm

Re: Which property to sell to claim back additional SDLT?

Postby fabs35 » Mon Feb 11, 2019 11:07 pm

Many thanks SDLT Geek.

If we sell both flats (converted from property A) within three years of purchasing property C, would we be able to claim back the 3% additional charge?

We would also consider gifting either flat A or B to a family member (having first settled any outstanding borrowing) - I assume this also would be considered to be a 'disposal' and therefore allow the charge to be reclaimed?

Rgds

Fabs35

SDLT Geek
Posts: 155
Joined: Sun Apr 30, 2017 5:45 pm

Re: Which property to sell to claim back additional SDLT?

Postby SDLT Geek » Tue Feb 12, 2019 12:08 am

Selling both flats in Property A should work, but you should not sell on a leasehold basis and retain the freehold.

An outright gift of either property A or B (but not to a spouse) should work if you retain no interest at all in it.

fabs35
Posts: 14
Joined: Wed Aug 06, 2008 3:04 pm

Re: Which property to sell to claim back additional SDLT?

Postby fabs35 » Tue Feb 12, 2019 12:32 am

Fantastic - thank you so much!


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