Higher Rate Reclaim

[jonm83]

Hi all,

I have an interesting scenario that i would like your thoughts on.

I purchased a new home along with my girlfriend (now fiancee) in August 16. We lived separately before that time and both owned our respective homes. I sold my existing home to fund the purchase of the new property, but she kept hers as a BTL. We therefore had to pay the additional SDLT surcharge on our new home.

The plan was always to sell the BTL before the 3 years and reclaim the additional SDLT, however the market is very slow at the moment and (with 2 months to go until the 3 year deadline) it doesn't look like it is going to sell in time.

I am considering purchasing her BTL in my sole name. I would obviously have to pay the 3% surcharge, but i am hoping this would then mean we are eligible for a refund of the surcharge on our main property as she would have disposed of her former property. The difference between the surcharge I would have to pay to purchase the BTL, and the refund we would be due on our main home is over £10k so not insignificant.

Do you see any issues with this?

Note: this will need to complete in August, and we don't get married until September.

Kind Regards
Jon

[pawncob]

On the face of it, there's no reason why not, but it may be that HMRC claim that it's a linked purchase.
https://www.gov.uk/guidance/sdlt-linked-purchases-or-transfers