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Where Taxpayers and Advisers Meet

Refund of 3% Surcharge

SK77
Posts:2
Joined:Mon Jul 13, 2020 5:46 pm
Refund of 3% Surcharge

Postby SK77 » Mon Jul 13, 2020 5:57 pm

Hello expert,

I bought a property in Jan 2013 under my name as full ownership (My wife's name was not included in the deeds) . Me and my family lived in the house until Mar 2019. It was my main residence during the time between 2013 and 2019 and it was under only in my name.
Later in Feb 2018, we bought another residence home under my and wife's name due to schooling issues. and we moved to the new house in Mar 2019 and rented my previous place. I was planning to sell my earlier home, but due to Covid, the asking price is very low. Hence could not sell it to 3rd party.

Hence i am planning to sell my earlier home which was bought in Jan 2013 to a company owned by my spouse. So that i can claim back the surcharge that was paid for my main residence. At the same time, i can transfer the earlier home to my spouse's company. I am aware, i will incurr an additional stamp duty for this transfer. But the additional stamp duty will get compensated, if i can get the surcharge refund from HMRC.

Please confirm whether i will be able to claim the SDLT surcharge refund as i am selling the earlier property within 36 months of moving to a new residence.

Appreciate your asdvise.

Thanks,

AGoodman
Posts:1738
Joined:Fri May 16, 2014 3:47 pm

Re: Refund of 3% Surcharge

Postby AGoodman » Tue Jul 14, 2020 5:07 pm

Yes, I think you should get the reclaim.

I assume you know the company will have to pay SDLT (including the 3% surcharge) on the full market value of the property. If the property is worth more than £500,000, the SDLT can jump to 15% (with exceptions if you are letting it to unconnected parties).

SDLT Geek
Posts:232
Joined:Sun Apr 30, 2017 5:45 pm

Re: Refund of 3% Surcharge

Postby SDLT Geek » Tue Jul 14, 2020 8:02 pm

It will be important that at the time of the Feb 2018 purchase you intended to live in that property as your only or main residence. I note that in fact your previous home remained your main residence until March 2019. That might take some explaining. For example, perhaps works were being done to make it ready for your use?

SK77
Posts:2
Joined:Mon Jul 13, 2020 5:46 pm

Re: Refund of 3% Surcharge

Postby SK77 » Fri Jul 17, 2020 10:19 am

Thanks for your response.
1) The reason for the delay to move from my main residence to my new residence is due to the construction work ( With planning permission, building regulation etc) that was carried out to my new residence. So that's why we moved late.

2) The main question is, if i sell my (Previous main residence property) to a company owned by my spouse within 36 months of our new property purchase.shall i be able to claim back the additional surcharge paid for our new residence. But one thing to mention, the new residence is bought under the names of my name and my spouse name.

Thanks,
SSK


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